Diverse
Strengths
2 0 1 9 A N N U A L A N D S U S TA I N A B I L I T Y R E P O R T
EXPLOREDEVELOPOPERATERECLAIM CEO MESSAGE
Table of Contents
OUR FEATURE CASE STUDIES
OUR FEATURE CASE STUDIES
CEO MESSAGE
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
OUR COMPANY
BUSINESS AND FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
Our Approach
Manitoba
Peru
Arizona
SOCIAL IMPACT
Our Approach
Manitoba
Peru
Arizona
ENVIRONMENT
Our Approach
Manitoba
Peru
Arizona
SUSTAINABILITY PERFORMANCE
ABOUT THIS REPORT
CONTACT US
GLOSSARY
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Hudbay 2019 Annual and Sustainability Report
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Hudbay’s history of finding,
developing and repeatedly
extending the life of orebodies
has been simply phenomenal,
and we continue to build on it
everywhere we operate.
PETER KUKIELSKI
CEO MESSAGE
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GRI
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102-14
CEO Message
2019 was a year of transition and positioning for
Hudbay. I was named interim Chief Executive Officer in
July, and in early 2020 I was appointed as Hudbay’s
President and CEO. Stephen Lang, a veteran executive
with experience in virtually every aspect of mining,
joined our Board as its Chair in October.
judicial order halted our progress. This stoppage was the
result of an unprecedented judicial decision, which we
are appealing, alongside government agencies involved
in issuing the permits. We are optimistic of our eventual
success on appeal and, in parallel, are pursuing a variety
of options to maximize Rosemont’s potential.
In my first letter as CEO, I am pleased to report that
2019 was also a year of considerable achievements for
Hudbay. Through a combination of operational
know-how and technical sophistication, all driven by
the energy, expertise and commitment of our people,
Hudbay delivered impressive results and improved
performance at our existing mines.
Opportunities for Growth
We also laid the foundation for increased performance
near our operating mines through a mix of prudent,
targeted enhancements, which included increasing the
capacity at our Stall mill, initiating the refurbishment of
our New Britannia mill and further optimizing processes
at our Constancia mine. Additionally, we extended the
resource potential in Snow Lake with the discovery of
the 1901 deposit and our work on the Lalor gold zone.
We also set the stage for expanding our operating
footprint in Peru through acquiring the surface rights to
Pampacancha and by deepening our relationships with
the local communities that hold the surface rights over
our prospective land package within trucking distance of
Constancia. Through these efforts, we helped position
Hudbay for long-term growth in both copper and gold
through exploration and development.
Of course, 2019 also contained one undeniable
disappointment: after successfully completing the
permitting process and initiating an early works program
at our Rosemont project in Arizona, an unexpected
With construction work currently on hold at Rosemont,
we moved to advance exploration activities at Mason,
our advanced exploration project in Nevada. Mason is
one of the largest undeveloped copper resources in the
Americas. We believe it will make a significant addition
to our robust copper pipeline in the future.
A History of Extending Value
Hudbay can trace its origins as a company back to 1927,
when it started mining operations in northern
Manitoba. Since then, the Company’s history of finding,
developing and repeatedly extending the life of
orebodies has been simply phenomenal, and we
continue to build on it everywhere we operate.
Manitoba
At our Lalor mine, production ramped up from
3,600 tonnes per day to a targeted capacity of
4,500 tonnes per day. Along with enhanced
performance, we also delivered an updated mine plan
for Lalor that will substantially increase gold production
once the New Britannia mill is commissioned and that
positions Lalor as one of the lowest cost gold mines in
Canada. The mine plan lays out our approach for
refurbishing the New Britannia mill, which will
significantly enhance gold recoveries at Lalor while
providing additional processing capacity in Snow Lake.
Creating a new gold business gives Hudbay greater
flexibility through commodity diversification and value
maximizing opportunities.
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As already mentioned, our team discovered a new
deposit in the Snow Lake region that we named 1901,
and we subsequently completed our initial resource
estimate just six months after that discovery. The 1901
deposit is located near our existing mining and
processing infrastructure and is now part of our
long-term growth pipeline.
As we expanded operations at Snow Lake, we
communicated openly with the communities of Flin Flon,
Creighton and Denare Beach about the confirmed
shutdown of the 777 mine in 2022, even as we kept
looking for efficiencies at the mine to enhance the
viability of the operation. Hudbay will continue to
support the community during this transition while
reinforcing our ties to northern Manitoba. Transition
plans are in place to move some employees to our Snow
Lake operations, where the refurbishment of the New
Britannia mill will help to ensure that Hudbay remains a
reliable partner in the region for many years to come.
Peru
Thanks to the efforts of both mine and technical teams,
the story of Constancia in 2019 was one of continuous
improvement, with copper recoveries increasing
throughout the year. Enhanced recovery effectively
gives us more copper without markedly growing costs.
During the year, our activities were occasionally
affected by road blockades and port closures related to
community actions against other mines in the region.
We were never the target of these actions and were
able to adjust to and recover from their impact quickly.
Establishing and maintaining good relations with
neighbouring communities has always been a priority
for Hudbay, and this has been rewarded in many ways,
including a social acceptance. Over 2019, we made
notable progress in securing land access at
Pampacancha and advanced discussions with
communities to the north of Constancia in relation to
the additional satellite mineral rights we acquired in
2018. Our efforts are focused on further expanding
Hudbay’s sizable growth pipeline.
A Company with Diverse Strengths
As we shift from 2019 to 2020, I think it is worthwhile
to enumerate Hudbay’s diverse strengths. We are a
Canadian copper company with assets in jurisdictions
with sound regulatory and business environments. Our
assets, both those in operation and those in our
pipeline, lend themselves to expansion, and Hudbay
has the in-house skills needed to deliver on that
potential at every stage of the mining cycle – from
exploration and development to operation and
reclamation. Very few of our peers can point to a
comparable mix of assets and abilities.
One of Hudbay’s greatest strengths is the culture of
safety we have built across our company. It encompasses
our assets, our people, communities and the
environment and is expressed in our commitment to zero
harm, across everything we do, everywhere we operate.
As you will see in this report, in both Manitoba and Peru
we delivered strong safety performance in 2019.
However, in this case, good is not good enough, and our
focus in 2020 will be to aim for perfect safety records.
The Strengths of Copper
Copper has been a valuable metal for centuries, but, in
the face of climate change and other challenges, it is
becoming the essential metal. It is absolutely required
for the electric infrastructure and vehicles that are
needed to meet the world’s decarbonization or green
objectives. And Hudbay is well positioned to deliver
sustainable and dependable copper production for
many years to come. We have the pipeline, and we have
the people. The skills we have and the assets we own
will enable us to grow progressively while investing
judiciously. It is a compelling proposition.
Hudbay’s Response to COVID-19
While the focus of this integrated report is Hudbay’s
overall performance in 2019, it is written during the
early months of 2020. So I felt it would be appropriate to
say something about Hudbay’s initial response to the
COVID-19 pandemic. We have kept an eye on the rapidly
evolving situation across all of our operations, and our
company-wide business preparedness plans were
activated in mid-March 2020. At the business unit level,
the response plans have been developed based on the
dynamics and context of the local situation. We have
been engaging with local communities, health
authorities, government and other stakeholders in each
of our regions. It is an uncertain time, but we remain
vigilant and ready to respond to the ever-changing
circumstances to ensure we protect all of our
stakeholders and the continuity of our business.
Hudbay is an iconic Canadian company that has
successfully weathered many storms. It has been
around for 90 years, and I am confident it will be
around for 90 more. I am proud and excited to be a part
of it. I want to thank our Board for their guidance, and
my colleagues across the Company for their warm
welcome and continued support.
Sincerely,
Peter Kukielski
President and Chief Executive Officer
GRI
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Constancia
Record
Results
Constancia embodies Hudbay’s diverse strengths and
capabilities in every aspect of mining. In a challenging,
mountainous geography, we went from acquisition in
2011 to completed construction in 2014. Subsequently,
Hudbay moved from initial production to full production
in only five months – all while maintaining a clear focus
on safety and a close rein on costs.
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Constancia: Record Results
In 2019, Constancia delivered record performance in
terms of the tonnes of ore the mine processed,
increasing from the original daily rate of approximately
76,000 tonnes to a record of almost 86,000 tonnes per
day for the year. At the same time, we increased the
amount of copper we recover from that ore, moving
from an average 80% recovery to consistent recoveries
of 85% or higher.
processes related to recovery and by re-examining our
approach to daily operations. On the technical side, we
initiated enhancements at the concentrator and to our
overall recovery circuit. Many of these improvements
were only made possible by the knowledge we have
gained over several years of operation, which, from a
metallurgical perspective, has given us greater insight
into the nature of the resource at Constancia.
Our safety performance was also solid in 2019, with
only one lost time injury over the year. Constancia is a
recognized sector leader for safety in South America,
and our performance is driven by a commitment to
continuous improvement. In 2019, we expanded the
mine-wide Behaviour-Based Safety program we
introduced in 2018, and implemented new safety
technologies and protocols for our highway fleet.
Optimizing Performance
With respect to day-to-day operations, one of the
most significant improvements we made was the
introduction of a central control centre – imagine an
air traffic control tower for a mine.
This enhanced perspective allows managers at
Constancia to see challenges, often before they
happen, and, through collaboration, to resolve
problems quickly when they do arise, all of which
contributes to a more efficient and productive mine.
The team at Constancia drove performance
improvements by finding ways to optimize technical
Focused on Continuous Improvement
Constancia is one of
the lowest cost sulphide
copper mines in
South America, and
Hudbay has been able to
control costs while
continuing to optimize
production.
The commitment to continuous improvement at
Constancia will deliver further benefits, as, over the next
several years, Hudbay begins to capitalize on the area’s
regional potential. Constancia is at the centre of several
highly prospective properties, including Pampacancha, to
which Hudbay has both the surface and mineral rights. As
these properties are developed, ore from the sites will be
processed using existing facilities at Constancia, providing
another example of Hudbay’s exceptional capacity for
extending the productivity and value of its assets.
CONSTANCIA
Rather than working in separate
offices, mining and processing staff
now work together in a central
office that uses on-site cameras to
provide them with a 360-degree,
24/7 picture of everything occurring
on the mine site.
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Lalor
Hitting Its
Stride
In a history that extends back over 90 years,
Hudbay has developed a notable record for using
innovation, teamwork and hard-earned mining
insight to get the most out of its properties.
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Lalor: Hitting Its Stride
The increase to 4,500 tonnes per day, up from a
previous average of 3,600–3,700 tonnes per day, is not
due to any single change or enhancement. Rather, it is
attributable to a number of thoughtfully applied
improvements to procedures and processes across all
of the mine’s activities, including mine design changes,
contract strategies, asset integrity and work
management programs.
Improving Efficiency
Lalor also adopted a new system for refueling its scoop
that delivered noteworthy results. Rather than keeping
fuel at central bays that scoops had to visit whenever
they needed fuel, the mine invested in a fuel truck that
can go directly to the scoops on an as-needed basis,
eliminating wasted travel time and increasing effective
mucking hours. A number of continuous improvement
Kaizen events were held at Lalor in 2019 and were key
to getting employee input into the successful
production ramp-up.
This simple improvement allowed drivers and their
scoops to spend an additional hour and a half at the
In 2019, the Company
extended its record of
achievement when it ramped
up to producing 4,500 tonnes
of ore per day at the Lalor
mine in northern Manitoba.
A rethought approach
to fueling gave scoop
drivers 90 more minutes
per shift at the ore face.
ore face, which, based on a 12-hour shift, is a significant
increase of productive time spent actively mining. This,
and other such improvements, speaks to a culture of
continuous improvement, and in many cases, the
changes were suggested by the miners at Lalor.
Making the Most of Our Mills
In addition to changes at the mine site, in 2019 Hudbay
undertook a series of incremental process and
equipment enhancements to further increase
throughput at our Stall mill. The New Britannia mill,
which Hudbay acquired in 2015, was another important
area of focus in 2019. Engineering and other technical
work was done on a new copper flotation circuit, along
with other upgrades to the plant, which will enable
New Britannia to contribute to significantly enhanced
recoveries from the Lalor gold and copper-gold zones
when the mill goes into operation in late 2021.
LALOR
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Rosemont
A Challenging
Path to a World-Class
Mine
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Rosemont: A Challenging Path to a World-Class Mine
Early in 2019, after a comprehensive process of
consultation and review, Hudbay received the final
federal permits for its Rosemont project in Arizona: the
Section 404 Water Permit from the US Army Corps of
Engineers and approval of the Mine Plan of Operations
from the US Forest Service. At that point, Hudbay was
ready to embark on developing one of the most
environmentally innovative and highly productive
low-cost copper mines in the world.
In July 2019, however, the US District Court for Arizona
overturned the permits and approvals for the project in
an unprecedented ruling, and effectively halted
development from moving forward. A strong
regulatory regime creates clear criteria for a project to
achieve acceptable environmental performance, and in
return for meeting these criteria should create
predictability for companies with respect to the
permitting process and timelines. We believe the
Rosemont design included significant investments that
more than addressed the regulatory criteria to
represent a state-of-the-art project, and we are
disappointed this did not deliver the corresponding
certainty of timelines. Hudbay and the federal agencies
are appealing the decision that overturned the federal
permits. Since acquiring Rosemont in 2014, we have
successfully defended seven lawsuits relating to the
project – the first six at the trial court level and the
seventh on appeal. Based on decades of established
precedent, we are optimistic that we will eventually
move forward in developing Rosemont.
Guided by that belief, Hudbay’s Arizona Business Unit
continues to look for ways to optimize the project, as
well as evaluating other options to advance it. Our
intention is still to build a world-class mine at
Rosemont, and we will keep stakeholders informed
through the process. We are also using insights gained
from the Rosemont process to help guide planning for
future development at Mason.
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We are monitoring emerging
innovations and technologies
and will continue to optimize
the project in support of
our goal to build a world-
class mine.
One program we will continue is Hudbay
Rosemont Copper School Grant Program.
The grant program awards between
$500 and $5,000 to local public schools’
STEEAM (Science, Technology, Engineering,
Environment, Agriculture and Math)
programs for students. In 2019, we awarded
20 grants totalling nearly $20,000.
ROSEMONT
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Our Company
Hudbay is a diversified mining company primarily producing copper concentrate (containing copper,
gold and silver) and zinc metal. Directly and through its subsidiaries, Hudbay owns three polymetallic
mines, four ore concentrators and a zinc production facility in northern Manitoba and Saskatchewan
(Canada) and Chumbivilcas (Peru), and copper projects in Arizona and Nevada (United States). The
Company’s growth strategy is focused on the exploration, development, operation and optimization
of properties it already controls, as well as other mineral assets it may acquire that fit its strategic
criteria. The Company is governed by the Canada Business Corporations Act and its shares are listed
under the symbol “HBM” on the Toronto Stock Exchange, New York Stock Exchange and Bolsa de
Valores de Lima.
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GRI
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CEO MESSAGE
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Chumbivilcas, Peru
Arizona, USA
Constancia
• 100% ownership
• Open pit copper/molybdenum mine
Rosemont
• 100% ownership1
• Open pit copper project
Exploration properties
• Peru
• Chile
• Nevada, USA
• New Mexico, USA
• Manitoba, Canada
• Saskatchewan, Canada
and concentrator
Pampacancha
• 100% ownership
• Proposed open pit copper/gold mine
Manitoba, Canada
Lalor
• 100% ownership
• Long-life, underground zinc/gold/
silver/copper mine
• Stall and Flin Flon concentrators
process Lalor base metal ore
• New Britannia mill to be refurbished
to process Lalor gold-rich ore
777
• 100% ownership
• Underground copper/zinc/gold/
silver mine
• Flin Flon concentrator
• Hydrometallurgical zinc plant
NEVADA
Mason
CHUMBIVILCAS
Constancia
Pampacancha
CHILE
Exploration
MANITOBA
777
Lalor
ARIZONA
Rosemont
Operations
Development
Exploration
1 We completed the acquisition of the United Copper & Moly Rosemont interest (7.95%) on
April 25, 2019, providing us with 100% ownership of Rosemont.
GRI
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Vision, Mission, Values
CEO MESSAGE
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Vision
We will be a responsible top-tier operator of long-life,
low-cost mines in the Americas.
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Mission
Our mission is to create sustainable value through the
acquisition, development and operation of high-quality,
long-life deposits with exploration potential in
jurisdictions that support responsible mining, and to
see the regions and communities in which we operate
benefit from our presence.
Values
Dignity & Respect: We treat each other in ways that
bring out the very best in each of us.
Caring: We sustain and contribute to the well-being of
people and the environment in which we operate.
Openness: We speak freely and listen with care about
opportunities, issues and concerns.
Trustworthiness: We can count on each other to
do the right thing, and we follow through on
our commitments.
GRI
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Members of our Board are highly skilled individuals
with qualifications that include having sound judgment,
integrity and strong character, as well as expertise and
knowledge useful in the oversight and safeguarding
of the Company’s business. Our Board members also
represent a diversity of viewpoints, backgrounds
and experiences.
The Board fulfills its responsibilities directly and
through five committees: Audit; Compensation and
Human Resources; Corporate Governance and
Nominating; Environmental, Health, Safety and
Sustainability; and Technical.
See our Management Information Circular to
learn more.
Corporate Governance
CEO MESSAGE
OUR FEATURE CASE STUDIES
Good corporate governance is the foundation of any
successful business, and it supports a company’s ability
to mitigate risk, protect stakeholders’ interests and
operate more efficiently and effectively.
Hudbay’s Board of Directors is committed to acting in
the best long-term interests of the Company, avoiding
conflicts of interest, and providing timely, accurate
disclosures to shareholders and other key stakeholders.
With a refreshed Board, including a new Chair, a new
CEO and a total of five new directors, we have
reaffirmed our corporate strategy and established the
necessary ingredients for a sustainable long-term future.
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GRI
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CEO MESSAGE
As of December 31, 2019, the following were members of Hudbay’s Board of Directors:
Board of Directors
OUR FEATURE CASE STUDIES
STEPHEN A. LANG*
CAROL T. BANDUCCI*
IGOR GONZALES*
OUR COMPANY
CHAIR
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
COMPENSATION AND
HUMAN RESOURCES COMMITTEE
CORPORATE GOVERNANCE
AND NOMINATING COMMITTEE
TECHNICAL COMMITTEE
AUDIT COMMITTEE (CHAIR)
ENVIRONMENTAL, HEALTH, SAFETY
AND SUSTAINABILITY COMMITTEE
ENVIRONMENTAL, HEALTH, SAFETY
AND SUSTAINABILITY COMMITTEE
TECHNICAL COMMITTEE
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
RICHARD HOWES*
SARAH B. KAVANAGH*
CARIN S. KNICKEL*
COMPENSATION AND
HUMAN RESOURCES COMMITTEE
TECHNICAL COMMITTEE
ENVIRONMENTAL, HEALTH, SAFETY AND
SUSTAINABILITY COMMITTEE (CHAIR)
CORPORATE GOVERNANCE AND
NOMINATING COMMITTEE
COMPENSATION AND HUMAN
RESOURCES COMMITTEE (CHAIR)
CORPORATE GOVERNANCE AND
NOMINATING COMMITTEE
PETER KUKIELSKI
PRESIDENT AND
CHIEF EXECUTIVE OFFICER
COLIN OSBORNE*
TECHNICAL COMMITTEE (CHAIR)
AUDIT COMMITTEE
DANIEL MUNIZ QUINTANILLA*
DAVID SMITH*
AUDIT COMMITTEE
ENVIRONMENTAL, HEALTH,
SAFETY AND SUSTAINABILITY
COMMITTEE
CORPORATE GOVERNANCE
AND NOMINATING COMMITTEE (CHAIR)
COMPENSATION AND
HUMAN RESOURCES COMMITTEE
* Independent
Note: After assisting with the Chair transition and the CEO
search, Alan Hibben stepped down as a director in February 2020.
Mr. Hibben joined the Board in 2009 and served as Chair
from 2017 to 2019.
More information on our Board of Directors
Learn more:
• Governance policies, standards, guidelines and
committee charters
• Management Information Circular
GRI
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Business Conduct
CEO MESSAGE
OUR FEATURE CASE STUDIES
Reflected in our values of dignity, respect, caring,
openness and trustworthiness is an understanding that
how we do our work is as important as what we do.
Our values are also expressed in our Code of Business
Conduct and Ethics (the Code of Business Conduct or
the Code), which states the principles of ethical conduct
expected of everyone working on behalf of Hudbay, its
subsidiaries and its affiliates. These principles include
avoiding conflicts of interest; complying in good faith
with all applicable laws, rules and regulations; protecting
Hudbay’s confidential and proprietary information,
assets, systems and property; and fostering a work
environment of respect and dignity.
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Board members and employees must confirm that they
understand and will comply with the Code upon joining
the Company. Every director and executive officer must
disclose any direct or indirect conflict of interest to the
Board, and all directors, officers, and employees with a
Hudbay email address are required to annually confirm
compliance with the Code, our Confidentiality and
Insider Trading Policy, our Statement on Anti-
Corruption and our Whistleblower Policy.
Personnel who report concerns about unethical or
illegal behaviour are protected by our Whistleblower
Policy, which expressly prohibits discrimination,
harassment and retaliation against anyone reporting
conduct they believe violates our Code or any laws.
Hudbay personnel may participate in the political
process as private citizens; however, our Code prohibits
political contributions made on Hudbay’s behalf.
Compliance Training
We provide compliance training on our Code and
related policies to all employees with a Hudbay email
address, as well as to the Board. Training on the
Canadian Corruption of Foreign Public Officials Act
(CFPOA) and the US Foreign Corrupt Practices Act (FCPA)
is given to specific groups or across the organization as
the Company deems appropriate.
In 2019, the Code underwent several changes, which
were approved in December by the Board. As such, the
annual compliance process for employees was deferred
until early 2020. In early 2020, we completed an online
certification and training campaign in which all active
employees were provided copies of the Code and our
key compliance policies (including anti-corruption
policies), asked to e-sign the policies to certify their
compliance therewith and complete a training program
in respect of such policies. In addition, in late 2019, our
COO and Vice President and General Counsel carried out
a compliance training program for the senior leadership
team in Peru. Of the individuals required to participate in
the training, 100% (representing 56% of our workforce)
completed the course. For individuals who failed to
comply by April 30, 2020, the Company suspended their
email access until they completed the training.
Risks, Issues or Complaints
An assessment of corruption risks at our three business
units and our corporate office identified that potential
for the violation of the CFPOA and the FCPA constitutes
a significant risk in Peru, due to difficulties in monitoring
the compliance of contractors and agents (and,
potentially, employees as the Company grows), as well as
the increased enforcement of anti-corruption legislation.
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CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
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There were no incidents of corruption reported in
2019, and no accusations of corruption involving
employees, business partners or legal cases were
brought against the Company. Through our third-party
whistleblower reporting service, six incidents were
reported in 2019, all of which were investigated and
resolved with corrective action where necessary.
None of these incidents involved significant allegations
of fraud or violations of our Code; however, some
allegations were brought forward related to business,
health, safety and environmental practices, conduct,
and violations of company policies or procedures, and
potential conflicts of interest.
Stakeholders may report an issue in one or more of the
following ways:
• Contact our Board of Directors by mail or email at
chair@hudbay.com.
• Submit a confidential report to the Chair of
Hudbay’s Audit Committee about any perceived
violation of the Company’s internal and accounting
controls, auditing matters or violations of the
Company’s Code of Business Conduct or Supplier
Code of Conduct by calling +1 877 457-7318 or
visiting clearviewconnects.com. Reports are handled
under our Whistleblower Policy, and the Chair of the
Audit Committee is responsible for ensuring that
they are appropriately investigated.
• Canada’s National Contact Point (NCP) for the
Organisation for Economic Co-operation and
Development (OECD) provides a forum where
multinational enterprises, Canadian businesses,
non-governmental organizations and labour
organizations can voice their views and
concerns. Canada’s NCP can be reached by email
at ncp.pcn@international.gc.ca or by telephone
at +1 343 203-2341.
• The independent Canadian Ombudsperson for
Responsible Enterprise (CORE), which replaced the
office of the CSR Councillor, is in the process of
establishing mechanisms to investigate human rights
complaints related to Canadian companies operating
overseas. More information about the development
of the CORE’s roles and responsibilities is available
on the Government of Canada’s website.
• Community concerns are addressed through our
grievance process at each project and operating
site. For details about community concerns during
2019, see the Community Relations section of this
report or look for locally available information on
initiating agreements.
Risk Management
As a mining company operating and exploring in
multiple jurisdictions, Hudbay’s top risks go beyond
financial and operational, and include, but are not
limited to, geopolitical, social and environmental.
We have a risk-smart workforce that identifies and
manages risk to ensure the successful achievement
of our business objectives.
Our enterprise risk management (ERM) processes:
• Help identify existing and emerging risks to
our business
• Promote alignment across the organization
• Embed effective risk management practices and
tools into our culture, systems and processes
• Provide assurance to our executives and
relevant committees of the Board of Directors on
the effectiveness of the ERM process
At the Board level, risk oversight practices are
maintained, with responsibilities outlined in the Board’s
and related committees’ charters. The Board of
Directors’ charter makes clear its responsibility for
reviewing principal risks and, with the assistance of the
Audit Committee, implementing policies and overseeing
the design of systems to effectively monitor such risks.
Hudbay executives are responsible for:
• Ensuring business is conducted in accordance with
the risk appetite set by the Board of Directors
• Integrating risk management into their strategic
business planning, budget and resource allocation,
operating performance, and human resources,
financial and compliance processes
• Ensuring principal risks are actively monitored
and managed
As they are identified, risks are assigned to individuals
who have the most knowledge and experience to
effectively manage and monitor said risks. Each
individual business unit has a risk register, which is
managed by the VP of the business unit and includes
risks such as environmental and corruption. An
aggregation of our risk information from each register
is performed to identify the high-level risks.
In the event of a crisis involving the health and safety of
Hudbay’s personnel and/or the Company’s assets,
operations and reputation, each business unit maintains
a crisis management and preparedness plan. The plans
help sites identify potential crises and develop responses
best suited to the local circumstances. Hudbay’s
corporate crisis management plan provides oversight of
the business unit plans and centrally manages potential
enterprise-wide risks such as cybersecurity and global
pandemics. The crisis management teams at the
business unit and corporate level conduct regular
training and exercises to maintain a state of readiness.
We discuss long-term and emerging risks and their
potential business impacts in the Risk Factors section of
our Annual Information Form.
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CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
Management Team
Hudbay’s proven record of discovering, building and operating world-class mines is a reflection of the women and men who work on Hudbay’s behalf. They are led by the Company’s
skilled and experienced management team, which sets the tone for a culture of integrity and compliance, and oversees the Company’s long-range goals, strategies, plans and
policies, subject to the Board’s direction and oversight.
As of December 31, 2019, the following were members of Hudbay’s management team:
PETER KUKIELSKI
PRESIDENT AND
CHIEF EXECUTIVE OFFICER
PETER ADAMEK
VICE PRESIDENT, FINANCE
CASHEL MEAGHER
SENIOR VICE PRESIDENT
AND CHIEF OPERATING OFFICER
EUGENE LEI
SENIOR VICE PRESIDENT, CORPORATE
DEVELOPMENT & STRATEGY AND
INTERIM CHIEF FINANCIAL OFFICER
PETER AMELUNXEN
VICE PRESIDENT,
TECHNICAL SERVICES
ROBERT ASSABGUI
VICE PRESIDENT,
MANITOBA BUSINESS UNIT
DAVID CLARRY
VICE PRESIDENT, CORPORATE
SOCIAL RESPONSIBILITY
JAVIER DEL RIO
VICE PRESIDENT,
SOUTH AMERICA BUSINESS UNIT
PATRICK DONNELLY
VICE PRESIDENT AND
GENERAL COUNSEL
JON DOUGLAS
VICE PRESIDENT
AND TREASURER
ANDRÉ LAUZON
VICE PRESIDENT,
ARIZONA BUSINESS UNIT
ELIZABETH GITAJN
VICE PRESIDENT, RISK MANAGEMENT
OLIVIER TAVCHANDJIAN
VICE PRESIDENT,
EXPLORATION AND GEOLOGY
Note: David Bryson, Chief Financial Officer, retired March 31, 2020.
Learn more
• Management team biographies
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CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
Business and Financial Review
Throughout 2019, Hudbay drew upon our strengths across the mining lifecycle and upon our focus
on continuous improvement, to deliver reliable operating results. Along with achieving full-year
production and unit cost guidance in both Peru and Manitoba, we stayed on track for meeting our
copper production guidance for the fifth consecutive year. At Constancia, thanks in part to
metallurgical enhancements at our mill, we achieved record throughput and record copper
recoveries. Our constant focus on community relations paved the way for securing surface rights
to Pampacancha in early 2020, enabling us to proceed with negotiations with individual land users.
At Lalor, we also delivered record throughput, after successfully completing the ramp-up to
4,500 tonnes per day. Our 777 mine successfully implemented several efficiency initiatives,
which helped drive zinc production above the top end of the guidance ranges. Early in 2019, we
announced the first phase of our Snow Lake gold strategy, which resulted in a significant increase
in gold reserves and an updated mine plan for Lalor. Supported by the refurbishment of the New
Britannia mill and related infrastructure upgrades in Snow Lake, Lalor’s annual gold production is
expected to increase to 140,000 ounces. In early 2020, we further optimized the Lalor mine plan
and incorporated other regional gold deposits, resulting in the second phase of our Snow Lake
gold strategy and a further increase in annual gold production to over 150,000 ounces, along with
a mine life extension to 18 years. Our focus in 2020 will be on implementing low-risk, quick-return
investments – in exploration, infrastructure and operational efficiency – targeted at or near to our
existing assets. We have committed $25 million to exploration in the coming year.
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CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
Key Accomplishments
2019 Summary
• Achieved production and unit cost guidance in
both Peru and Manitoba. Additionally, strong
performance at the Lalor and 777 mines resulted
in zinc production exceeding the top end of the
guidance range.
Operations Summary
For the years ended December 31
Production (contained metal in concentrate)1
Copper (000 tonnes)
• Constancia achieved record mill throughput and
Zinc (000 tonnes)
copper recoveries in 2019.
• Lalor and 777 increased mine output by 22% and
15%, respectively, on a year-over-year basis.
• Reached a community agreement to acquire
Pampacancha surface rights.
• Refurbishing of the New Britannia mill is on track for
completion in 2021; Hudbay expects this will increase
Lalor’s annual gold production to over
150,000 ounces in 2022.
• Cash and cash equivalents of $396.1 million, as at
December 31, 2019, position the Company well for
executing future growth initiatives.
Gold (000 ounces)
Silver (000 ounces)
1 Metal reported in concentrate is prior to refining losses or deductions associated with smelter contract terms.
Financial Summary
Financial Condition
(in $000s)
Cash and cash equivalents
Working capital
Total assets
Total long-term debt
Equity
2019
137.2
119.1
114.7
2018
154.6
115.6
119.9
3,585.3
3,954.5
Dec. 31, 2019 Dec. 31, 2018
$
396,146
$ 515,497
271,284
445,228
4,455,961
4,685,635
985,255
981,030
1,848,123
2,178,856
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Financial Performance
(in $000s, except per share amounts)
CEO MESSAGE
OUR FEATURE CASE STUDIES
Revenue
Profit before tax
OUR COMPANY
Basic and diluted earnings (loss) per share1
BUSINESS AND
FINANCIAL REVIEW
Profit (loss)
Operating cash flows before change in non-cash working capital
Production
SUSTAINABILITY APPROACH
Contained metal in concentrate2
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
Copper (tonnes)
Gold (ounces)
Silver (ounces)
Zinc (tonnes)
Metal sold
Payable in metal in concentrate2
Copper (tonnes)
Gold (ounces)
Silver (ounces)
Refined zinc (tonnes)
1 Attributable to owners of the Company.
2 Metal reported in concentrate is prior to deductions associated with smelter contract terms.
Dec. 31, 2019 Dec. 31, 2018
$ 1,237,439
$ 1,472,366
(452,763)
170,837
(1.32)
0.33
(343,810)
85,416
307,284
501,352
2019 copper production benefited from increased
throughput and recoveries at Constancia despite
expected lower planned grades. Strong zinc
production was as a result of Lalor achieving its
ramp-up to 4,500 tonnes per day and the 777 mine
implementing operational improvements.
137,179
154,550
114,692
119,882
3,585,330
3,954,469
119,106
115,588
128,519
147,923
108,999
113,097
3,452,926
3,372,353
104,319
115,723
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CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
Strategy
Our mission is to create sustainable value through
acquiring, developing and operating high-quality,
long-life deposits with exploration potential in
jurisdictions that support responsible mining. Ensuring
that regions and communities in which we operate
benefit from our presence is key to creating value for
all of Hudbay’s stakeholders.
We believe the best way to create shareholder value in
the mining industry is by discovering and successfully
developing new mineral deposits while maintaining
efficient, low-cost operations for profitably extracting
ore from those deposits. We also believe that our
strong track record, which includes the development,
ramp-up and operation of the Constancia mine in Peru
and our 90-year history of mining in northern Manitoba,
gives us a competitive edge when compared to
similar-sized peers in mining.
Hudbay has built a world-class asset base over the last
decade by employing a consistent strategy. We are
pursuing sustainable growth through exploring and
developing our robust project pipeline and by acquiring
other properties that fit our strategic criteria.
To create sustainable value for stakeholders, we
have clear criteria for evaluating mineral property
opportunities. These include:
Geography: Our geographic focus is on select countries
in the Americas, with strong rule of law and respect for
human rights consistent with our long-standing focus
on environmental, social and governance principles.
Commodity: Among the metals we produce, we
believe copper has the best long-term supply/demand
fundamentals and the greatest opportunities for
sustained risk-adjusted returns. While our primary focus
is on copper, we appreciate the counter-cyclical nature
of gold in our portfolio.
Quality: We are focused on adding long-life, low-cost
assets to our existing portfolio of high-quality assets.
Potential: Regardless of the stage of development, we
look for mineral assets that we believe offer significant
incremental potential for exploration, development
and optimization beyond the stated resources and
mine plan.
Process: Through a robust due diligence and capital
allocation process, we develop a clear understanding of
how we can create value through acquisition or by
investment in existing properties.
Operatorship: We believe real value is created through
leading efficient project development and operations.
Financial: Investments and acquisitions should be
accretive to Hudbay on a per share basis.
Financial and Business Objectives for 2020
Looking forward to 2020, we will build on our
commitment to creating sustainable value with a focus
on low capital intensity, high-return brownfield
projects, such as beginning development in
Pampacancha and making further progress on
refurbishing the New Britannia mill in Manitoba. We
will also continue exploration activities related to the
Mason project in Nevada.
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We intend to:
CEO MESSAGE
• Continue to exercise stringent cost discipline across
our business while still generating positive cash flow
OUR FEATURE CASE STUDIES
• Progress on the refurbishment of the
New Britannia mill
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
• Reach agreements with individual community
members that currently use portions of the acquired
Pampacancha lands and move forward with
development at Pampacancha
• Continue to drill Lalor gold to further add to reserves
SUSTAINABILITY APPROACH
and extend mine life
OUR PEOPLE
• Conduct further testing of Constancia regional
exploration targets, and work to identify and unlock
future value
SOCIAL IMPACT
• Advance preliminary economic studies at Mason
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
• In conjunction with relevant US federal agencies, will
pursue appeal of Rosemont decision through the US
Ninth Circuit Court of Appeals
Business Activities
Throughout 2019, we pursued continuous
improvement at all of our operations. For the fifth year
in a row, our focus helped us to meet our guidance
expectations in Peru and Manitoba, and in the case of
zinc, to exceed the top end of our 2019 guidance
range. In a constrained price environment where base
metals were impacted by global trade volatility, we
were able to generate positive free cash flow. At
Constancia, we delivered record mill throughput and
copper recoveries. We also made vital progress in the
negotiations that enabled us to reach a community
agreement for surface rights to Pampacancha in early
2020. In Manitoba, both Lalor and 777 achieved
increased mine output. At Lalor, we made notable
progress in terms of our mine plan and in updating the
New Britannia mill, which will enable us to significantly
increase gold production starting in 2022.
• Across Hudbay, produced 137,179 tonnes of copper
in concentrate, 119,106 tonnes of zinc in concentrate
and 114,692 ounces of gold in concentrate
• Maintained our focus on efficiency, with a
consolidated cash cost per pound of copper
produced of $1.14 and an all-in sustaining cost of
$2.17 per pound1
• Generated $310.9 million from operating activities in
2019, with an ending cash balance of $396.1 million,
and are well positioned for future growth initiatives
• Continued our strong sustainability performance
• Fully refreshed our Board and appointed new CEO
1 All-in sustaining cash cost per pound of copper produced, net of byproduct credits, is a non-IFRS financial performance measure with no
standardized definition under IFRS. For further information and a detailed reconciliation, please see the discussion under “Non-IFRS
Financial Performance Measures” beginning on page 42 of Hudbay’s Management’s Discussion and Analysis filed February 20, 2020.
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Manitoba Business Unit
• Lalor and 777 increased mine output by 22% and
Peru Business Unit
• Achieved record mill throughput and copper
Financials
CEO MESSAGE
15%, respectively, year-over-year
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
• Received the Mining Association of Canada’s Towards
Sustainable Mining (TSM) Leadership Award for
meeting or exceeding a Level A ranking across six key
areas of performance: aboriginal and community
outreach, crisis management and communications
planning, safety and health, tailings management,
biodiversity conservation management, and energy
and greenhouse gas emissions management
• Discovered the 1901 deposit and published an initial
resource estimate six months later
OUR PEOPLE
• Announced updated mine plan for Lalor, more than
doubling the annual gold production
SOCIAL IMPACT
• Progressed on refurbishment of New Britannia mill
• Achieved full-year unit cost guidance
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
recoveries at Constancia, although throughput was
capped by operating permit levels
• 2019 negotiations with Chilloroya laid the foundation
for securing a community agreement for surface
rights at Pampacancha in February 2020
• Moved forward with integration of an automated,
advance process control system
• Constancia remains one of the lowest cost copper
mines1 in South America
Corporate Exploration
• Committed $25 million, which includes option
payments, toward exploration in 2020; will focus our
efforts on exploration near existing processing
infrastructure in Peru and Manitoba
• Exploration portfolio of owned or optioned
mineral properties comprises approximately
850,000 hectares across Canada, Peru, the
United States and Chile
Once again, Hudbay met or exceeded our production
guidance ranges for metal production for the year on a
consolidated basis, while still generating free cash flow.
Combined unit costs in both Peru and Manitoba were
within 2019 guidance ranges. Hudbay’s full-year
revenue was $1,237.4 million, $235.0 million lower
than 2018, primarily as a result of lower metal prices
and sales volumes for copper and zinc. The all-in
sustaining cash cost for copper produced, net of
byproduct credits, was $2.172, an increase from $1.60
in 2018. This increase was primarily due to reduced
copper production from planned lower grades at
Constancia and the closure of the Reed mine in
Manitoba in August 2018.
Consolidated Financial Statements
Management’s Discussion and Analysis
1 Source: Wood Mackenzie Q4 2019 dataset, primary copper, open pit sulphide mines in South America. Operating costs include mining,
processing and general and administrative expenditures on a per tonne basis. Wood Mackenzie’s costing methodology may be different
than the methodology reported by Hudbay or its peers in their public disclosure. For details regarding Hudbay’s costs, refer to Hudbay’s
Management’s Discussion and Analysis for the year ended December 31, 2019.
2 All-in sustaining cash cost per pound of copper produced, net of
byproduct credits, is a non-IFRS financial performance measure
with no standardized definition under IFRS. For further
information and a detailed reconciliation, please see the
discussion under “Non-IFRS Financial Performance Measures”
beginning on page 42 of Hudbay’s Management’s Discussion
and Analysis filed February 20, 2020.
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CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
Sustainability Approach
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.
86%
$8.1
MILLION
Reduced lost time injuries by 10% and
severity of injuries by 86% in Manitoba
contributed toward community
investments and charitable donations
Hudbay 2019 Annual and Sustainability Report
| Sustainability Approach
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CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
Working in partnership with suppliers that share our
goals, values and commitments to local communities
and other key stakeholders supports our ability to mine
more efficiently and responsibly, which is essential to
our success. In Peru, the team at our Constancia
operation established a formal contractor evaluation
program to measure crucial aspects of the operation’s
relationship with key suppliers.
To evaluate suppliers that vary in size and in the type of
goods and services they provide Hudbay, Constancia
has developed indicators that can be consistently
reviewed in all cases, so that decision-making is as
objective as possible. These include:
• Engagement – Attendance at weekly and monthly
meetings
storage facilities (TSFs) and to progress toward a target
of zero tailings dam failures.
In 2017, the Mining Association of Canada (MAC), of
which Hudbay is a member, released a new Tailings
Management Protocol that aims to further improve
tailings management and continually work toward
minimizing harm. In preparation for reporting our 2019
performance against the new protocol, Hudbay and
Vale (also a MAC member) provided team members
with an in-depth review of the new protocol and the
changes from previous reporting requirements. The
training session also discussed gaps that might exist
and action plans to close them. Although not yet
confirmed, it is anticipated that the TSM level achieved
for 2019 was maintained.
CASE STUDY
Ensuring Suppliers
Share Our Goals
and Values
Hudbay’s mining operations generate a type of waste
called tailings, which are contained in engineered
facilities. Tailings management has long been a focus of
the industry, governments and communities, and it is
one of Hudbay’s material sustainability issues due to
the risk that a tailings facility breach or failure could
pose to the environment and/or human health and life.
Recent catastrophic tailings dam collapses at other
mining companies have heightened the need for a
step-change in the industry’s performance. While the
mining industry has come a long way in improving its
tailings management approach, there is still much to
do, and it requires global co-operation among mining
companies, experts and stakeholders around the globe.
In early 2019, representatives from Hudbay and Vale
held a joint training session in Snow Lake for the teams
at Hudbay’s Manitoba operations and Vale’s Thompson
mine. The session supported a broader global effort to
raise the bar on how the industry manages tailings
• Performance – Compliance with agreements
• Delivery of timely information on activities at the end
of every month
• Thoroughness and quality of the supplier’s reports to
the Company
• The performance of suppliers is ranked and
categorized as being excellent, good, fair or poor
CASE STUDY
Working Together for
Tailings Safety
Hudbay 2019 Annual and Sustainability Report
| Sustainability Approach
26
Sustainability Governance
Sustainability Management Framework
To ensure a sustainable approach is integrated
throughout the business and across the mine lifecycle,
our Board of Directors and senior leaders have a
dedicated focus on sustainability issues and social and
environmental risk mitigation programs.
The Board of Directors’ Environmental, Health, Safety
and Sustainability (EHSS) Committee provides oversight
of the Company’s human rights, environmental, health
and safety policies, programs and systems. The
Committee meets quarterly to review the Company’s
performance and management of key EHSS risks. It also
tracks the effectiveness of Hudbay’s management
systems through the external ISO 14001 and
OHSAS 18001 certification and TSM performance
assessment processes. Our Vice President, Corporate
Social Responsibility, supports and oversees the
Company’s overall performance while personnel at
each operation are dedicated to the day-to-day
management of health, safety, environmental,
community relations and other social matters.
BOARD OF DIRECTORS
EHSS
COMMITTEE
AUDIT
COMMITTEE
CEO
COO
CFO
VPs
OPERATIONS
& PROJECTS
VP CSR
VP RISK
MANAGEMENT
Allocation of resources
and oversight to ensure
responsible operations
Systems, support,
and internal assurance
for environment,
health & safety and
social performance
Systems, support,
and internal assurance
for financial and
regulatory compliance
VP & GENERAL
COUNSEL
Systems, support, and
internal assurance for
Code of Business Conduct
Hudbay’s Code of Business Conduct, Human Rights
Policy, Environmental Health and Safety Policy
and Supplier Code of Conduct state our social,
environmental and ethical commitments across our
business, including our supply chain.
Our operating sites and corporate office use
management systems to support decision-making
and performance. Each operation must maintain
ISO 14001 certification (for environmental
management systems) and OHSAS 18001 (for health
and safety management systems). New sites are
expected to achieve certification within two years of
the start of commercial operations or acquisition by
Hudbay. Both our Manitoba and Peru business units
maintained ISO 14001 and OHSAS 18001 throughout
the year.
CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
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403-103 410-103
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CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
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SASB EM-MM-160A.1
We use a company-wide integrated information
management system to set objectives and identify
risks. This software tracks health, safety and
environmental incidents; captures stakeholder
engagement activities and commitments; and
documents corrective actions at the sites, providing
assurance to corporate personnel and Board members
that EHSS matters are being managed accordingly.
As a member of the MAC, Hudbay participates in the
organization’s Towards Sustainable Mining (TSM)
program. TSM aims to improve the industry’s
performance and help companies evaluate and manage
their environmental and social responsibilities. The
program is based on guiding principles and supported
by a set of tools and performance indicators to ensure
key mining risks are being effectively managed.
Participation in TSM supports accountability,
transparency and credibility by evaluating and publicly
reporting our performance across the following
protocols and frameworks:
• Aboriginal and Community Outreach (revised to
Indigenous and Community Relationships)
• Safety and Health
• Crisis Management and Communications Planning
• Preventing Child and Forced Labour
• Biodiversity Conservation Management
• Tailings Management
• Energy and Greenhouse Gas (GHG) Emissions
Management
• Water Stewardship
• Mine Closure Framework
In 2017, the TSM program enhanced the Tailings
Management protocol, and members are required to
report against the updated protocol beginning with
their 2019 assessments. In 2018, the Water
Stewardship Policy Framework was incorporated into a
new Water Stewardship protocol, which we will begin
to report against in 2021.
These protocols and frameworks are incorporated into
our overall management systems and company
standards. Although we are only required to implement
the program at our Canadian operations, we commit to
implementing the program at all of our operations. The
goal is for each facility to achieve a Level A – which is
considered good performance and demonstrates that
commitments and accountabilities are in place and
consistent with the protocol – in all performance areas.
In 2019, MAC transitioned from its annual TSM
Progress Report – which was published as a single
document in the spring – to a new public TSM reporting
website that presents TSM scores and company profiles
in a digital format. The new site publishes scores as
they are submitted, allowing members to update their
results throughout the year. The results of our latest
assessment – which were externally verified – are
available on the MAC website.
International Best Practice Standards
To inform our sustainability programs and improve our
performance, we apply the following international best
practice standards and voluntarily support and/or
participate in:
• ISO 14001 environmental management standard
• OHSAS 18001 health and safety management
standard
• ISO 9001 quality management standard for the
production and supply of cast zinc products
• Towards Sustainable Mining – the Mining
Association of Canada’s set of tools and indicators to
drive performance and ensure key mining risks are
managed responsibly
• Voluntary Principles on Security and Human
Rights – an operating framework that ensures
security practices include respect for human rights
• Global Reporting Initiative (GRI) – the generally
accepted framework for reporting on an
organization’s economic, environmental and
social performance
• CDP (formerly called the Carbon Disclosure Project) –
the non-profit that runs the global disclosure system
for thousands of organizations to manage
environmental matters such as greenhouse gas
emissions, water use and climate change strategies
• IFC Performance Standards – the International
Finance Corporation (IFC), part of the World Bank
Group, is the largest global development institution
focused exclusively on the private sector in
developing countries. Hudbay follows the IFC’s
Performance Standards on Environmental and Social
Sustainability at our Constancia site in Peru.
Precautionary Approach
From early exploration through closure, Hudbay
operates under the precautionary principle: the duty to
prevent harm, when it is within our power to do so and
when harm is scientifically plausible but uncertain. We
use baseline environmental and social impact studies to
evaluate how to avoid, mitigate or control potentially
significant impacts; implement appropriate monitoring
and management systems; and address the need for
mine closure. In all cases, we make provisions for public
consultation and input.
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• EITI – Extractive Industries Transparency Initiative
Human Rights and Security
CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
GRI
102-12
102-13
102-16
102-34
102-44
412-103
Industry Involvement
Hudbay participates in industry associations and
multi-stakeholder groups through membership, funding,
sharing of expertise, and participation in committees
and working groups. Memberships include the following:
• Aboriginal Chamber of Commerce (Manitoba)
• Alianza para Obras por Impuestos – ALOXI
• American Exploration and Mining Association
• Arizona Mining Association
• Arizona Small Business Association
• Arizona Trail Association
• Several Arizona Chambers of Commerce – Benson San
Pedro Valley, Greater Oro Valley, Greater Vail Area,
Green Valley/Sahuarita, Marana, Nogales–Santa Cruz,
Sierra Vista Area, Tucson Hispanic, Tucson Metro
• Asociación Vida Perú (a non-profit organization that
donates medical equipment and medicines)
• Business for Social Responsibility (BSR) (a non-profit
business network and consultancy dedicated to
sustainability)
• Cámara de Comercio Canadá Perú
• Canadian Council for Aboriginal Business
• Empresarios por la Educación (a Peruvian private
sector organization to promote and develop
educational projects)
• Flin Flon Chamber of Commerce
• Grupo de Diálogo, Minería y Desarrollo Sostenible
(multi-stakeholder group promoting open and
transparent dialogue on mining, environmental
protection and sustainable development in Peru)
• International Zinc Association
• Manitoba Employers Council
• Metropolitan Pima Alliance
• Mining Association of Canada
• Mining Association of Manitoba Inc.
• Mining Foundation of the Southwest (US)
• Mining Safety Round Table (a collaborative group of
safety-committed mining companies that share
experiences and identify best practices)
• National Mining Association (US)
• Saskatchewan Mining Association
• Snow Lake Chamber of Commerce
• Sociedad Geológica del Perú – SGP (Peruvian
• Canadian Institute of Mining, Metallurgy and
geological association)
Petroleum and relevant societies
• Sociedad Nacional de Minería, Petróleo y Energía –
• Centro Peruano de Promoción del Cobre – Procobre
SNMPE (Peruvian Mining Society)
• Confederación Nacional de Instituciones
• Southeast Arizona Economic Development Group
Empresariales Privadas, CONFIEP (National
Confederation of Private Business Institutions in Peru)
• Cusco Chamber of Commerce
• Devonshire Initiative (a Canadian forum for leading
international development, NGOs and mining
companies to engage on mining and community
development issues)
• Southeastern Arizona Contractors Association
• Southern Arizona Business Coalition
• WAAIME (The Women's Auxiliary to the American
Institute of Mining, Metallurgical, and Petroleum
Engineers – Peruvian Section)
• Women in Mining Peru – WiM PERU
Reflected in our values is respect for the rights of the
people who work on our behalf and those who live in the
communities near our operations. Our Human Rights
Policy includes an explicit statement of support for the
principles of the Universal Declaration of Human
Rights, and both the policy and our Code of Business
Conduct affirm our commitment to respect for human
rights through our business activities and practices.
We respect the dignity of all people, along with their
culture, customs and values. Our fair labour practices
include zero tolerance for forced, compulsory and child
labour, and we work to prevent any infringement upon
human rights within our sphere of influence.
The UN Guiding Principles on Business and Human
Rights provides a blueprint for businesses that includes
a public commitment, a due diligence process that
assesses risks, and a method for providing a remedy to
anyone who is impacted. Throughout 2018 and 2019,
we developed guidance materials to identify and
mitigate social, security and human rights risks and to
better integrate these considerations into our
enterprise risk management program. In 2020, we plan
to apply the guidance while performing assessments in
the Manitoba Business Unit. Insights will be used to
inform any necessary enhancements and/or
modifications to the guidance.
Concerns about human rights issues within our business
can be reported via site grievance mechanisms or
directly to our Board of Directors through our corporate
website or third-party ethics hotline, as explained in the
Risks, Issues or Complaints section. In 2019, there were
no human rights issues raised or reported through our
Board, hotline or site grievance mechanisms.
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CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
We conduct high-level corporate risk assessments
to rank the security risk level of each operation, and
we develop detailed risk assessments at each
location to define specific actions. Activities at each
risk level include:
• Low risk – an annual review of the corporate risk
assessment and an annual advisory site visit; a
local social risk assessment; training of security
management on the VPs; and raising awareness
of the VPs with contracted private and public
security personnel
• Medium risk – at least an annual audit of site security
practices using the Global Compact Canada VP
framework, and at least one annual advisory visit; a
structured program at the site, including training of
security personnel, to implement the VPs; a
grievance mechanism to record and respond to
security complaints; and active participation in
forums that promote security and human rights
• High risk – an annual audit by an independent
Voluntary Principles Organization (VPO)-recognized
auditor; a grievance mechanism to record and
respond to security complaints; and engagement
with national and international organizations on
security practices
Currently, all our operating and exploration sites are
considered low risk except for Constancia in Peru,
which is classified as medium risk.
Guatemala Civil Lawsuits
Hudbay is named in three civil lawsuits relating to
alleged events prior to 2010 in Guatemala, where the
Company owned a controlling interest in Compañía
Guatemalteca de Níquel (CGN). Information about the
litigation is posted on our website.
Security Practices
Respecting the human rights of neighbouring
communities while providing a secure work environment
and protecting our employees, contractors and physical
assets defines our security approach.
Our Security Policy and Corporate Plan expands on the
commitments in our Human Rights Policy and details
how these commitments are consistently put into
practice. This policy recognizes the importance of
measured and appropriate responses to security
threats in reducing conflicts and building relationships
with communities and other stakeholders.
The operations, projects and exploration sites where
we employ security personnel apply the Voluntary
Principles on Security and Human Rights (the VPs),
which prioritize relationship building and provide a
framework for understanding the operating context,
identifying security-related human rights risks, and
taking meaningful steps to ensure we respect human
rights and fundamental freedoms. All contracts with
security services include a requirement to work within
the VPs framework as well as the UN Code of Conduct
for Law Enforcement Officials and the UN Basic
Principles on the Use of Force and Firearms by Law
Enforcement Officials. Although governments have
the primary responsibility for maintaining law and
order, the VPs apply to those cases where we use
public security providers to ensure their actions are
consistent with the protection of human rights.
GRI
410-103
SASB EM-MM-210A.3
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for the protocol. Although not yet confirmed, it is
anticipated that this TSM level has been achieved for
2019. Details on our business unit performance are
discussed below.
In 2019, the International Council on Mining and Metals
(ICMM), the United Nations Environment Programme
(UNEP) and Principles for Responsible Investment (PRI)
initiated a Global Tailings Review following Córrego do
Feijão’s catastrophic TSF failure. The review’s purpose
was to create a robust, fit-for-purpose international
standard for the safer management of tailings.
Feedback from stakeholders (including Hudbay,
through our MAC membership) on a draft Global
Tailings Standard was collected through the end of
2019. The suggestions and insights are being
incorporated into a final standard that is expected to
be published in the first half of 2020.
Tailings Governance Charter
Our Tailings Governance Charter further strengthens
our internal governance structure to ensure
appropriate corporate oversight regarding the safe
management of tailings facilities. The charter details
existing controls, including a Tailings Management
System at the site or business unit that supports
day-to-day activities – such as planning, monitoring, risk
identification and reporting – associated with the
management of tailings construction and operation.
One important expectation among stakeholders is that
a company’s governance includes oversight by the
Board of Directors. The Charter details our Corporate
Tailings Governance System, which includes a Tailings
Governance Team (TGT) composed of individuals from
the business units and relevant corporate functions.
The mission of the TGT is to serve in a monitoring and
advisory role to assure the CEO, COO and Board of
Directors that appropriate processes are in place and
that all TSFs are constructed and operated in a manner
that protects public health and safety.
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OUR COMPANY
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SUSTAINABILITY
PERFORMANCE
Tailings Stewardship
Mine tailings are the fine-grained material that remains
after the process of separating the minerals from the
crushed ore. Tailings can be solid or a slurry of fine
particles and water, and are contained in engineered
tailings storage facilities (TSFs) that are designed to
safely store the waste.
An uncontained release of tailings not only poses an
environmental risk, but there are also potentially
catastrophic consequences should a TSF fail, as
evidenced by the TSF failure at Vale’s Córrego do Feijão
mine in Brumadinho, Brazil, in January 2019, which
killed more than 250 people.
The continuous improvement and safe management of
TSFs is an industry-wide priority, and several industry
initiatives have been, and are being, implemented to
strengthen tailings management.
Tailings Management Protocol
As a member of MAC, we implement TSM’s updated
Tailings Management protocol, which aims to achieve
the goal of zero catastrophic failures of tailings facilities
and no significant adverse effects on human health and
the environment. The protocol emphasizes management
processes, senior executive oversight, and expert
third-party reviews that ensure appropriate technical
standards of construction, maintenance and operation.
The protocol requires all locations with TSFs to have a
third-party independent review that conducts, at a
minimum, an annual review of each facility and the
associated tailings management practices. Our 2019
assessment was the first year of reporting against the
protocol. In preparation for the new reporting
requirements, our Manitoba and Peru business units
updated their tailings management processes and held
training sessions. One of our public targets was for
both business units to maintain a score of A or higher
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CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
On-the-Ground Approach to
Tailings Stewardship
In 2019, there were no incidents at any of our TSFs that
threatened human health or the environment.
Hudbay manages, in accordance with the requirements
of the Charter, four tailings and water retainment
facilities – three (including one inactive) in our
Manitoba Business Unit and one at our Constancia
operation in Peru.
In Manitoba, we have initiated several projects to
improve our tailings management facilities. We
highlight the activities at the Flin Flon facility in the
Improving Tailings Safety in Manitoba case study.
Our Anderson tailings impoundment area (TIA) in Snow
Lake has historically used subaqueous deposition of
tailings in Anderson Lake. To accommodate ongoing
production from our Lalor mine, we are investing in an
expansion of the facility that raises the dam around
Anderson using the downstream method. Following a
multi-year permitting process in which we received
approval in mid-2018, we initiated construction in early
2019 that is expected to continue into the second half
of 2020.
In Peru, an independent review of our Constancia
tailings facility found it to be in compliance with our
standards and good practices.
The proposed mine plan for our Rosemont project in
Arizona includes an alternative method of tailings
disposal called dry-stack or filtered tailings. This
method – which involves additional process equipment
to dewater tailings prior to placing in a storage facility –
offers numerous advantages over other tailings storage
options (provided climatic conditions support the
technology). These include reduced requirements for
water consumption and land, and an ability to
conduct concurrent reclamation. Dry stack also nearly
eliminates the risk of groundwater contamination and
catastrophic tailings dam breaches. If the federal
permits are reinstated after completion of legal
challenges, Rosemont’s proposed state-of-the-art
dry-stack tailings facility would be one of the largest in
the world, requiring half as much water as conventional
processing technologies.
In April 2019, the Church of England Pensions Board
and the Council on Ethics of the Swedish National
Pension Funds (CoE) requested nearly 700 mining firms,
including Hudbay, to disclose details on each tailings
facility. Our response to this request, which includes a
full inventory and details on each facility, is published
on our website.
Stakeholder Engagement
All individuals and groups who have an interest in, may
be affected by, or believe they may be affected by our
activities and business decisions are considered
stakeholders. The perspectives of employees,
shareholders, suppliers, government officials,
communities, rights holders and other key stakeholders
help us make better decisions and continuously
improve. Through transparent, ongoing dialogue with
our stakeholders, we work to better understand their
needs and expectations. The frequency and channel of
engagement vary depending on the stakeholder, topic
or concern.
Our Stakeholder Engagement Standard and the
supporting guidance document detail the requirements
and expectations for understanding stakeholder
perspectives and addressing concerns. Our
Shareholder Engagement Policy promotes open and
sustained dialogue between our Board of Directors
and shareholders.
To collectively work on issues and solutions, we
participate in industry associations and multi-
stakeholder initiatives that bring together
organizations and individuals to share expertise,
lessons learned and best practices.
GRI
102-42
102-43
102-44
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2019 Engagement Activities and Topics
The following table lists key stakeholders and how we engaged with them in 2019:
CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
Shareholders, debtholders, investors and analysts
• Conferences, including participation in ESG panel
• Upcoming closure of the 777 mine, mill and
Stakeholder group
How we engaged in 2019
Priorities and concerns
Employees and contractors
(11 events)
zinc plant in Flin Flon
• Investor meetings, road shows and conference calls
• Rosemont legal ruling
(more than 330 events)
• Annual General Meeting of Shareholders
• Analyst and investor site visit to Manitoba operation
• Quarterly CEO email messages
• Senior management site visits
• Town hall meetings
• Lalor gold results
• Pampacancha land access
• Mergers and acquisitions
• Health and safety
• Work processes
• Business performance
• Orientation and training programs
• Understanding of compensation and benefits
• One-on-one and small group manager/staff meetings
• Opportunities for personal development
• Video messages
• Environmental requirements
• Health and wellness committees and activities
• Training for policies, permits or other requirements
• Hudbay intranet
Unions
• Meetings with union leaders on outstanding issues
• Updates on mine life and activities related to closure
• Formal grievance processes
• Joint health and safety committees
• Mobility
• Seniority
• Outstanding grievances
• Health and safety
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
GRI
102-21
102-34
102-40
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Stakeholder group
How we engaged in 2019
Priorities and concerns
Local communities and Native American/
indigenous groups
• Community information and consultation
• Development project updates
meetings/dialogue tables
• Community partnerships
• Site tours and open houses
• Site grievance/community response processes
• Community relations offices
• Cultural awareness workshops and other training
• Community and area activities and investment
• Safety and environmental concerns
• Land use
• Water use and quality
• Local employment and procurement
• Training programs for community members
• Cultural protection, awareness and dissemination
• Educating employees on intercultural competency,
conflict resolution, human rights and anti-racism
• Future operations plans (operating life)
Customers
• Direct contact
• Achieving agreed-on terms of delivery for products
• Industry and business forums
• Provision of information on product safety and
product origin
• Compliance with environmentally and socially
responsible performance and risk management
CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
GRI
102-21
102-34
102-40
SASB EM-MM-210A.3
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Materiality
CEO MESSAGE
OUR FEATURE CASE STUDIES
We define our material CSR issues as those economic,
environmental and social issues most important to our
stakeholders and our business.
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
Every three years, we carry out a review of our
priorities in relation to what we are hearing from our
key stakeholder groups. The latest review in 2017
evaluated the environmental, health, safety and
community (EHSC) matters that are most significant to
Hudbay in terms of business impact and degree of
stakeholder interest.
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
Materiality Matrix
During the 2017 materiality review, 11 priority issues were identified. Click on each issue in the diagram below to learn
how we are managing it and how we performed in 2019.
Human Rights
Water
Land and Biodiversity
Local Market Presence
Ethics
Health and Safety
Stakeholder Engagement
Tailings
Economic Performance
Employee Relations
Aboriginal/Indigenous
Relations
T
S
E
R
E
T
N
I
R
E
D
L
O
H
E
K
A
T
S
BUSINESS IMPACT
Environment
Labour
Society
Governance
Economic
GRI
102-46
102-47
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The following table indicates how our priority issues align with the GRI Sustainability Reporting Standards
reported in the GRI content index:
Priority issue
Ethics
Human rights
GRI Standards
Ethics and integrity
Anti-corruption
Security practices
Human rights grievance mechanisms
Stakeholder engagement
Stakeholder engagement
Environmental grievance mechanisms
Grievance mechanisms for impacts on society
Indigenous rights
Occupational health and safety
Labour/management relations
Economic performance
Indirect economic impacts
Procurement practices
Employment
Closure planning
Resettlement
Biodiversity
Water
Effluents and waste
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201-103 203-103
204-103 205-103
303-103 304-103
306-103 401-103
402-103 403-103
410-103 411-103
412-103 413-103
MM9-103
MM10-103
Indigenous relations
Health and safety
Employee relations
Economic performance
Local market presence
GRI
102-46
102-47
Land and biodiversity
Water
Tailings
Boundaries
We conducted the materiality review on the initial
boundary assumption of activities and facilities within
Hudbay’s management control (as described in the Our
Company section of this report). Participants in the
review process were then asked for cases in which
boundary limits should be adjusted for specific aspects.
Based on stakeholder expectations and business risk,
the following additions were deemed appropriate:
• Safety statistics are tracked and reported for
all contractor activities under Hudbay contracts
and supervision
• Environmental incidents related to transportation
between Hudbay locations and local supplier
activities are generally tracked, reviewed and
reported by Hudbay
• Grievances are accepted and investigated with
respect to local contractors and security activities
related to Hudbay, and are included in grievance
numbers and characterization in this report
• Scope 2 greenhouse gas emissions are calculated
and reported
Exploration sites have special considerations in
our reporting:
• Sites for which we do not maintain managerial
control are excluded
• Corporate exploration with managerial control over
the site is included and reported individually
• Business unit exploration with managerial control
over the site is included and embedded in the
business unit numbers
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Responsible Supply Chain
CEO MESSAGE
OUR FEATURE CASE STUDIES
Mining is the first stage of a long supply chain that
converts mineral resources into products that meet the
needs of everyday life.
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
As a mining company that operates in many different
jurisdictions, we work with hundreds of suppliers and
subcontractors. We focus our supply chain
responsibility efforts on activities where we can have
the greatest influence: our operations, contractors
working at our sites, local suppliers, and Hudbay
products up to the point from which they are shipped
(in Manitoba at the plant gate, and in Peru at the port
loading facility). Our legal function mitigates third-
party risks by conducting due diligence on all elevated
risk suppliers, and our internal audit function reviews
the contract/supplier screening process. Each
operation conducts additional monitoring of on-site
and local suppliers.
We seek suppliers that share our values and work in
partnership with us to continuously improve our
performance. In 2019, our Peru Business Unit
implemented a supplier evaluation program that we
highlight in the Ensuring Suppliers Share Our Goals
and Values case study.
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
GRI
102-16
204-1
203-103 204-103
The standards of conduct that we expect of suppliers
who wish to do business with Hudbay are stated in our
Supplier Code of Conduct and Ethics (Supplier Code
of Conduct). All suppliers are expected to read, accept
and comply with the Supplier Code of Conduct and all
applicable compliance policies – including our
Statement on Anti-Corruption, Human Rights Policy
and Environmental Health and Safety Policy – as a
condition to doing business with Hudbay. Expectations
of our suppliers include:
• Reading, accepting and complying with the Supplier
Code of Conduct and all applicable policies
• Complying with all applicable laws, rules and
regulations
• Conducting business honestly, ethically and in
accordance with social codes
• Complying with anti-corruption laws and informing
Hudbay of any conflicts of interest
• Protecting confidential information
• Respecting human rights and observing Hudbay’s
Human Rights Policy
• Establishing practices and procedures that
protect the health and safety of workers and
the environment
• Accepting Hudbay’s supplier due diligence process
• Reporting suspected violations of the Supplier Code
of Conduct and applicable compliance policies by any
supplier or Hudbay personnel
412-103 413-103
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The IMO specifies hazard classification criteria for bulk
cargoes, and the International Convention for the
Prevention of Pollution from Ships (MARPOL) imposes
restrictions on the disposal of bulk cargo residues
classified as “harmful to the marine environment”
(HME) under the amended Annex V of the MARPOL
convention. Hudbay engaged the European Copper
Institute (ECI) to determine the MARPOL classification
for Constancia’s copper concentrates. From this study
and others, all Hudbay copper concentrates have been
determined to not be HME.
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OUR COMPANY
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Supply Chain Performance
The direct supply chain for our copper concentrate and
zinc metal products originates in Hudbay’s mines in
northern Manitoba and Peru.
The indirect supply chain for energy, goods and
services used in transforming ore and concentrate into
products includes thousands of suppliers, who provide
operating and maintenance supplies, energy and fuels,
and capital goods:
• In Peru, our top 50 suppliers accounted for 81% of
our spending, and 95% of our spending was with
suppliers based in Peru.
• In Manitoba, our supplier base relates to production
operations and capital projects. Our top 50 suppliers
represented 76% of our spending in 2019, and 98%
of spending was with suppliers in Canada. These
suppliers provided goods and services such as
engineering services, electricity, spare parts for
equipment, underground haul trucks and other
capital equipment.
Hudbay’s top 10 suppliers in 2019, representing 34% of
procured value, were (in alphabetical order):
• CN (CAD)
• Corporación Primax S.A.
• Dumas Contracting Ltd.
• Enel Generación Perú S.A.A.
• Epiroc Canada Inc.
• Ferreyros Sociedad Anónima
• Manitoba Hydro
• Servosa Cargo S.A.C.
• Stracon S.A.
• Strilkiwski Contracting Ltd.
Products
The two main products we produce are copper and
zinc. Copper is essential in today’s society, serving as
a vital component in electronics and electrical
transmission. In health care, new applications for
copper are being identified due to its ability to kill
bacteria. Zinc is vital to the endurance of metals in
manufacturing. Both metals are important to the
renewable energy industry.
Our copper concentrate and zinc metal are produced
at operations in Canada and Peru:
• Hudbay sold and delivered 65% of its copper
concentrate to traders and smelters in Asia and 35%
to traders and smelters in the Americas and Europe.
From there, several stages of smelting and refining
the copper content ultimately result in 99.99% pure
copper, an essential metal for modern living.
• We ship cast zinc metal produced at our Flin Flon zinc
plant by rail and truck to industrial customers
throughout North America (primarily to galvanizers
who use it to protect steel from corrosion).
The safety data sheets (SDS) that accompany copper
and zinc products provide details of their composition,
toxicology, handling, storage and exposure issues. We
further meet our product stewardship commitments
by collaborating with governments and industry
associations, including the International Zinc
Association and the European Copper Institute, to
guide our compliance with international requirements
such as those provided by the International Maritime
Organization (IMO).
GRI
102-6
102-9
203-2
Hudbay 2019 Annual and Sustainability Report
| Sustainability Approach
38
United Nations Sustainable
Development Goals
Hudbay recognizes the opportunity the mining industry
has to positively contribute to the 17 UN Sustainable
Development Goals (SDGs) that are a part of the UN’s
2030 Agenda for Sustainable Development. There are
several SDGs for which we consider the industry a
natural fit for taking on a leadership role, and others
where we feel our company can make progress by
working alongside government, civil society and other
organizations. We continue to explore opportunities
to measure and report our contributions to the SDGs
and integrate the SDGs into our business planning
and reporting.
The following table outlines the SDGs that are most
relevant to our business and identifies where the topics
are discussed in this report.
CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
Sustainable Development Goals
Link to topic
Business and Financial Review
Our People
Social Impact
• Exchanging Knowledge and Empowering Local Communities
Social Impact > Our Approach
• Local Hiring and Procurement
• Community Development
Social Impact > Manitoba
Social Impact > Peru
Social Impact > Peru
• Developing Independent Communities
Environment > Peru
• Conserving and Protecting Biodiversity
Sustainability Approach > Sustainability Governance
• International Best Practice Standards
• Industry Involvement
Our People > Our Approach
• Diversity and Inclusion
Our People > Manitoba
• Hiring Local and Diverse Talent
Key Performance Data Table (Employees)
• Workforce Diversity
GRI
102-12
Hudbay 2019 Annual and Sustainability Report
| Sustainability Approach
39
CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
Sustainable Development Goals
Link to topic
Environment > Our Approach
• Water
Environment > Peru
• Achieving Key Environmental Objectives
Sustainability Approach
• Ensuring Suppliers Share Our Goals and Values
Sustainability Approach > Responsible Supply Chain
• Supply Chain Performance
• Products
Environment > Our Approach
• Land and Biodiversity
• Closure and Reclamation
Environment > Manitoba
• Adapting Activities to Protect Species
Environment > Peru
• Conserving and Protecting Biodiversity
Environment > Arizona
• Demonstrating Commitment to Environmental Stewardship
Key Performance Data Table (Environment)
• Land Use
• Sites Requiring Biodiversity Management Plans
• Habitats Protected or Restored
• IUCN Red List Species
GRI
102-12
Hudbay 2019 Annual and Sustainability Report
| Sustainability Approach
40
CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
Sustainable Development Goals
Link to topic
Sustainability Approach > Human Rights and Security
• Security Practices
Our People > Our Approach
• Health and Safety
Our People > Manitoba
• Focusing on Workplace Safety Culture
Our People > Peru
• Focus on Safety
Environment
• Total Greenhouse Gas Emissions Chart
Environment > Our Approach
• Energy Use and Greenhouse Gas Emissions
Recognizing that the SDGs represent national-level
governmental commitments, we will continue to work
to design our activities with relevant goals and to help
connect national processes to local needs, as
represented in SDG 17 (Partnerships for the goals).
GRI
102-12
Hudbay 2019 Annual and Sustainability Report
| Sustainability Approach
41
CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
OUR APPROACH
MANITOBA
PERU
ARIZONA
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
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.
LOST TIME ACCIDENT FREQUENCY
(lost time accidents per 200,000 hours worked)
LOST TIME INJURY SEVERITY
(days lost per 200,000 hours worked)
2016
2017
2018
0.3
0.3
0.3
2019
0.4
2016
2017
9.3
8.4
2018
14.3
2019
4.1
15%
16%
30%
indigenous employment
in Manitoba
overall female
employment
of Board members
are women
GRI
403-103
Hudbay 2019 Annual and Sustainability Report
| Our People
42
CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
OUR APPROACH
MANITOBA
PERU
ARIZONA
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
CASE STUDY
Leading a More
Efficient and Proactive
Approach to Safety
Each LSR has controls that must be in place before a
task may be completed. We started rolling out the LSR
program across the business unit at the end of 2019. In
2020, we plan to conduct training and evaluate the
effectiveness of the program by testing the controls
and performing thorough investigations and
inspections to ensure everyone is working in a way that
complies with rules that save lives.
Mining activities (e.g., drilling, blasting, working with
chemicals, operating machinery) present risks that must
be identified and effectively managed to keep people
safe. Hudbay’s success is underpinned by our ability to
build a culture of safety and keep our people, assets,
communities and the environment free from harm.
Although we are proud of our safety performance, and
our Constancia mine is a sector leader in safety, we still
experience incidents that have high potential for causing
serious harm and for being life-altering.
In 2019, our Manitoba Business Unit adjusted its focus
to better understand what tasks are contributing to
workplace injuries and what controls are needed to
mitigate the risks. Along with holding workshops, our
Health and Safety department studied fatality and
injury trends across the industry and in Canada. From
the incident investigations and workshops, they
identified nine top risks most applicable to the business
and developed clear, rigorous and practical rules –
known as Life Saving Rules (LSRs) – that must be
followed to prevent injuries and save lives:
• Energy isolation
• Working at heights
• Unsupported ground/loose
• Vehicles/people interaction
• Fire
• Explosives
• Lifting/material handling
• Confined spaces
• Working with molten metal
Hudbay 2019 Annual and Sustainability Report
| Our People
43
CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
CASE STUDY
OUR PEOPLE
OUR APPROACH
MANITOBA
PERU
ARIZONA
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
Building a Culture of
Continuous Feedback
One of the ways we measure employee engagement
and sentiment is by surveying personnel and asking
them what is working well and what needs
improvement. In 2019, feedback on one of our newest
initiatives – the manager-once-removed relationship –
was overwhelmingly positive, with many of those
surveyed wanting it to be continued.
The manager-once-removed (MoR) relationship is part
of the three-tier management style aimed at producing
greater insight about the work and the people on a
team. The team includes an MoR, a manager (who
reports to the MoR) and an employee-once-removed
(EoR). Each member of the team holds different
accountabilities. The MoR is accountable for the
quality, effectiveness and viability of the team.
The overall goal of the MoR relationship is to
encourage communication, openness and trust across
multiple levels. Other benefits include:
• Separates the MoR’s accountability for career
development from the manager’s accountability for
coaching direct reports, which helps managers
balance priorities and eliminates potential conflicts
between a manager’s interest in maintaining a strong
team and the organization’s interest in developing
people for new roles
• Provides MoRs insight on the organization’s health
through MoR–EoR conversations and mentoring
• Helps MoRs assess their direct reports’ managerial
leadership skills
• Promotes frank conversations without fear of reprisal
To support MoRs in establishing and maintaining
effective and trusting relationships with their team
members, we developed a Manager-once-Removed
(MoR) Accountability Toolkit that provides guidance to
those who may be new to the MoR role and serves as
a reference for more experienced MoRs. The toolkit
gives managers the theoretical and practical
knowledge needed to help them establish and maintain
trust-based relationships with their team members and
develop their EoRs.
Our focus in 2020 is to further strengthen MoR
relationships across the organization so that frontline
personnel view their MoR as an additional level of
support, in addition to their manager.
GRI
402-103
Hudbay 2019 Annual and Sustainability Report
| Our People
44
Our Approach
CEO MESSAGE
OUR FEATURE CASE STUDIES
Health and Safety
First and foremost among Hudbay’s priorities is the
safety and health of our people.
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
OUR APPROACH
MANITOBA
PERU
ARIZONA
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
Our Environmental Health and Safety Policy states our
commitment to control risks, transparently report our
performance, and continuously improve the systems
and practices that protect people. Within two years of
reaching commercial production, all operations are
required to be certified to OHSAS 18001, an
internationally accepted standard for occupational health
and safety management systems, and this certification
must be maintained throughout the life of the operation.
In 2018, ISO published a new ISO 45001 standard, which
will replace OHSAS 18001, to further improve worker
safety across all sectors around the globe. Hudbay will
work to transition to ISO 45001 by 2021.
We also apply the Mining Association of Canada’s (MAC)
Towards Sustainable Mining (TSM) Safety and Health
protocol, which assesses and measures our
performance. Regular monitoring, self-assessments and
triennial third-party verifications ensure operations
remain in compliance with these standards and
protocols throughout the life of the operation. To foster
transparency and hold ourselves accountable for our
safety performance, we set public safety targets related
to achieving a year-over-year improvement in our
recordable injury rate and recordable injury severity rate.
Building a culture dedicated to zero harm requires that
everyone who works at our sites has the knowledge,
skills and equipment needed to work safely and that our
leaders empower their teams and actively encourage
them to speak up when they have concerns. Initiatives –
such as the supervisor mentor program in Manitoba –
aim to support supervisors in effectively engaging with
their teams so that everyone understands the risks
associated with tasks and the work environment.
Our safety programs provide training for activities
undertaken, whether at an operation, exploration site
or office location, or for visitors to the mine site.
Emergency response teams receive specialized training
that prepares them to mobilize quickly and effectively
during an event at a mine site.
Although we are proud of our safety performance, we
continue to drive improvements in our ability to
prevent fatalities. Our operations employ processes
and tools to help identify the top fatality risks and the
controls that are most effective in managing them.
We record, investigate and analyze incidents and
conformance to our standards using our company-wide
integrated information system. Significant incidents,
based on criteria set by the Board, are reported to our
Board quarterly. High-potential incidents – those that
could have resulted in a fatality or serious injury – are
registered in our systems and investigated in depth to
analyze the cause as well as the controls and corrective
actions needed to prevent a similar incident from
happening again.
Other efforts to continuously improve our safety and
health performance include the Visible Felt Leadership
program, where leaders engage with employees and
take accountability for their teams’ safety, and our
occupational health programs, which monitor
exposures to health risks such as hearing loss and
illnesses caused by airborne agents. As an active
member of the Mining Safety Round Table, we engage
with other mining companies throughout the year to
share lessons learned and best practices to raise the
safety performance of the entire industry.
GRI
403-103
Hudbay 2019 Annual and Sustainability Report
| Our People
45
CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
OUR APPROACH
MANITOBA
PERU
ARIZONA
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
Employee Relations
We want to be recognized as an employer of choice
everywhere we operate. This requires us to offer
fair wages and compensation and to invest in our
people through opportunities for career development
and growth.
Our Code of Conduct states our commitment to
responsible workplace and business practices. This
includes a non-discriminatory and harassment-free
workplace. We do not tolerate any form of violent
behaviour, and personnel are expected to perform
their job duties in a professional manner.
Approximately 1,238 full-time, part-time and contract
employees (55% of our workforce) are represented by a
union, and we respect the right of our employees to join
a union and engage in the collective bargaining process.
We work to constructively engage with the eight unions
that represent our employees and to partner with them
on solutions that create mutual benefit.
We engage employees and keep them informed about
important business matters through various channels
and tools. These include town hall meetings,
workshops, internal emails and videos from senior
leaders, and our company intranet, where we post
employee-focused news and resources.
With a large number of employees eligible for
retirement, especially in our Manitoba Business Unit,
our retirement readiness programs provide information
and tools that prepare employees for success once
they leave the workforce.
Transforming the Way We Work
Capitalizing on new business opportunities requires us
to have a highly effective organization that prioritizes
the development and career progression of all
employees. Through our “OneHudbay: How we work”
managerial leadership system, we are focused on the
following four main objectives for building a more
efficient and competitive organization:
• A clear mission, vision and strategy which translates
into an integrated business plan;
• The right organizational structure with the
appropriate levels to achieve our strategy and goals;
• The right person in the right role, doing the right
work, at the right time – all of which help our people
reach their full potential; and
• Effective working relationships within teams and
across functions.
Embedding OneHudbay throughout the business is a
continuous process, and in 2019 we continued to
define and reinforce how we work and support one
another in an accountability-based organization.
Following a successful pilot of the Performance
Effectiveness Process at the corporate office in 2018,
we rolled it out to the manager level in Manitoba, to
the superintendent level in Peru and to a select group
in Arizona. The process involves ongoing conversations
between managers and employees, a year-end
performance evaluation procedure that improves
effectiveness and fairness, and a coaching program
where managers learn to ask questions and listen in a
way that creates awareness and invites action. The
process, which is now consistent across the Company,
supports our broader talent management and
succession objectives to understand people’s goals and
place them in roles that best suit their abilities and
development aspirations.
GRI
401-103 402-103
Hudbay 2019 Annual and Sustainability Report
| Our People
46
CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
OUR APPROACH
MANITOBA
PERU
ARIZONA
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
In 2019, we formalized a manager-once-removed (MoR)
concept, which links the entire organization through
conversations managers have with the people who
report to their direct reports. This three-tiered
approach – which we highlight in the case study
Building a Culture of Continuous Feedback – is
designed to set context, build trust and develop our
employees. A key feature of the MoR concept is
ensuring managers demonstrate effective Managerial
Leadership Practices (MLPs), which are the behaviours
that build trust in manager–employee relationships
and increase the willingness of employees to
efficiently and effectively execute the business
strategy. In 2019, we conducted training sessions with
managers on the 10 MLPs to help them meet their
managerial accountabilities.
To support OneHudbay and other human resources
efforts, we are developing a comprehensive Human
Resources Management System (HRMS) based on
SAP’s SuccessFactors software. We set a 2019 public
target of implementing the HRMS company-wide, to
establish globally integrated employee information.
Given the greater-than-expected scope of the
project, our focus in 2019 was on designing the
system to meet the organization’s needs. Once fully
implemented by mid-2020, our HRMS will, for the
first time, give us a consolidated view of the
organization and provide the foundation for
standardizing personal performance metrics.
Diversity and Inclusion
We recognize that an inclusive workplace embraces
diverse backgrounds, experience and perspectives,
makes us stronger, and cultivates collaboration toward
shared goals. Our OneHudbay approach provides a
crucial foundation for attracting and retaining diverse
talent. By embedding our values of dignity and respect,
caring, openness and trustworthiness throughout the
organization and clarifying roles and accountabilities,
we aim to further foster trust, which supports a more
open and diverse workforce.
We support the Catalyst Accord 2022 and the 30%
Club, both of which call for the advancement of women
in business. Female representation on our Board of
Directors is currently 30%. We continue to identify
opportunities to increase the percentage of women on
our Board, in management and across the business.
This includes engaging with two universities – the
University of Waterloo and Wilfrid Laurier University –
on a co-op program for second- and third-year finance
students who alternate a semester of school with a
semester of working in Hudbay’s finance department.
Since the program’s inception, 31% of the participants
have been women. Our global Diversity Policy is
available on our website.
Fulfilling our mission requires a workforce that reflects
the communities near our operations. Each site
prioritizes employment opportunities for members of
the local communities and indigenous groups.
GRI
401-103 413-103
Hudbay 2019 Annual and Sustainability Report
| Our People
47
Manitoba
Employees in our Manitoba Business Unit primarily
work at two operation centres. The Flin Flon site
includes the 777 mine, Flin Flon mill and zinc plant, and
the Lalor operation in Snow Lake consists of the Lalor
mine, Stall mill and New Britannia mill. At year-end, Flin
Flon employed 937 people, and Snow Lake employed
474. Of the employees who work at Lalor, 346 (36%)
live in Snow Lake. Around 15% of our employees in
Manitoba identify as indigenous and 16% are women.
Preparing for Mine Closure
Over the last several years, the team in our Manitoba
Business Unit has worked to optimize operations and
uncover opportunities to extend the life of the
777 mine in Flin Flon. These efforts have pushed out
the expected closure date of the mine and Flin Flon mill
and zinc plant; however, we have initiated planning for
closure by mid-2022. The good news is that our other
operation in Manitoba is growing. The increased
production at the Lalor mine and the refurbishment of
the New Britannia mill provide an opportunity to
transition part of the Flin Flon workforce to Snow Lake
over the next several years.
We are applying our OneHudbay approach to these
changes to ensure people are in the right roles, where
they can thrive, and that everyone is treated fairly
during the process. At Flin Flon, we continued with the
video series launched in 2017 that featured Hudbay’s
CEO and other company leaders providing updates on
the mine’s future. The videos were supported by letters
and face-to-face engagement between site leaders and
employees and with community leaders, and the topic
in 2019 largely focused on the transition plan.
CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
OUR APPROACH
MANITOBA
PERU
ARIZONA
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
Focusing on Workplace Safety Culture
The business unit’s safety performance significantly
improved for the year, with our total recordable injury
frequency down by 0.1 and our lost time injury severity
also down, by 9.
A significant contributor to this performance is the
business unit’s focus on implementing a risk-based
culture. Since 2018, more than 1,400 employees have
been trained on conducting effective field risk
assessments that involve analyzing the hazards in the
workplace and then mitigating the risks by putting
controls in place before beginning work. In 2019, we
incorporated feedback from users into the field risk
assessment form and continued to train employees to
increase adoption and acceptance of the process.
As part of meeting our corporate target to identify and
propose improvements to our fatality prevention
approach, we introduced a program around our Life
Saving Rules (LSR) – those rules that if not followed can
lead to someone being injured or worse. We discuss
this program more in the case study on Leading a More
Efficient and Proactive Approach to Safety.
We continued our supervisor mentoring program
where Hudbay’s Safety Specialist – who has a keen
ability to identify hazards in the workplace – partners
with frontline supervisors at the mine site to help them
identify safety hazards. He coaches and trains the
supervisors on how to effectively respond to issues and
concerns by engaging team members, so everyone
understands the risks and safety measures. The
program includes coaching supervisors on tough
conversations and on critically examining and
modifying their own behaviour.
Hudbay 2019 Annual and Sustainability Report
| Our People
48
CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
OUR APPROACH
MANITOBA
PERU
ARIZONA
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
The most significant safety event during the year was a
kitchen fire at the Lalor camp in July. No one was
injured, but the fire destroyed the camp kitchen. We
conducted an Incident Cause Analysis Method (ICAM)
investigation and identified the cause as a camp
employee smoking near a combustible material.
Corrective actions included establishing a smoking
policy for the camp and kitchen, including designated
smoking areas, and reviewing hazards (i.e., storage of
combustibles) and controls. In 2020, we will also
expand our Security department at Flin Flon to Snow
Lake to ensure all of our employees and contractors are
adhering to our safety requirements.
Our wellness committee, which meets monthly,
includes representatives from our Human Resources
and Health and Safety departments, and union
co-chairs, as well as external medical professionals. As
part of a broader mental wellness program to support
the transitional work related to the closure of the Flin
Flon operations, in 2019 we engaged a third party to
conduct a full-day mental first aid course that was open
to all employees. The course’s objective was aimed at
recognizing mental health issues and crises when they
develop and learning how to help guide people toward
getting professional help. We also held a two-hour
mental health awareness training course for
supervisors to help them identify signs and provide
tools to make sure employees get the proper care.
In 2019, the Manitoba Business Unit received the
Government of Canada’s Employment Equity
Achievement Award, which recognizes the Company’s
efforts to champion employment equity in the
workplace for four designated groups – women,
indigenous people, persons with disabilities and
members of visible minority groups. In addition to the
programs mentioned above and in the discussion on
Creating Long-Term Relationships with First Nations
and Communities of Interest, these efforts include
employing a Disability Awareness Coordinator, who
identifies innovative ways to provide meaningful work
for persons with disabilities, such as with the newly
created Fleet Vehicle Dispatcher role.
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. The competition,
which has been held annually since 1961,
tests the completeness of emergency
response plans and the abilities of
emergency response personnel. The Flin
Flon team will represent Hudbay at the
National Western Region Mine Rescue
Championship in 2021.
Hiring Local and Diverse Talent
The business unit conducted extensive recruiting from
the local and indigenous communities near our
operations, particularly in the Snow Lake area near Lalor.
In 2018, we partnered with the Manitoba government’s
Northern Manitoba Sector Council on an indigenous
hiring project at Lalor. The Council selected
12 participants from the Pimicikamak Cree Nation near
Cross Lake who went through an eight-week program
that introduced them to mining. Following their
graduation in May 2019, Hudbay offered all graduates a
conditional letter of employment. At the end of 2019,
five of the 12 graduates still worked at Hudbay. To
address the primary reason why graduates left Hudbay
(separation from their community), we incorporated
improvements into the program such as a mentorship
program and providing employees greater transportation
options between their home and workplace. In June,
Manitoba premier Brian Pallister met with the graduates
and discussed the program’s attributes.
The Hudbay Women’s Network (HBWN), founded in
2018 by two female employees in our Manitoba
Business Unit, continued to grow and be a positive
influence across the business unit. The HBWN’s
founding principle is gender inclusion, and its goal is to
support, connect and empower Hudbay employees by
providing a vehicle for professional growth and a
strong voice. During the year, a member of the group
presented on its success at the corporate office, where
a similar organization is under consideration. We also
continued our support of Diamonds in the Rough – the
world’s first all-female mine rescue team, which
competed in the 2018 International Mine Rescue
Competition in Russia and includes Hudbay’s Jodi
Brasch. In 2019, the team competed in the National
Western Regionals Mine Rescue Competition in British
Columbia and conducted outreach to several
organizations about opportunities for women in the
mining industry.
GRI
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Hudbay 2019 Annual and Sustainability Report
| Our People
49
CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
OUR APPROACH
MANITOBA
PERU
ARIZONA
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
Peru
Our workforce in the Peru Business Unit includes staff
members at our office in Lima and those who work at
the Constancia operation, which is located in a remote
part of southern Peru. The operating and support
personnel work multi-day shifts, staying at Constancia’s
accommodation camp during their rotation. The camp
amenities include a dining hall, a medical centre and
recreational facilities.
At the end of 2019, the Peru Business Unit had
881 employees, including 130 term employees (defined
as those with contracts that end on a specific date). Of
our full-time employees, 99.6% are from Peru, 15% are
from local communities and 10% are women. Around
30% of the term employees are from the local
communities of Uchucarco and Chilloroya.
Focus on Safety
Our Peru Business Unit’s safety performance continued
to be strong, with only one lost time injury (LTI) at the
mine site related to a fractured leg that occurred
during a drill bit change. The business unit’s attention
on health and safety is often noted in feedback from
third-party inspectors and has been a positive
contributor in the land access negotiations with the
communities that have land rights related to
Pampacancha and the other satellite deposits.
Constancia expanded its Behaviour-Based Safety (BBS)
program, which the site introduced in 2018. BBS is a
proven process aimed at reducing injuries through
observations and positive feedback that reinforces safe
behaviours. During the year, all plant and mine
personnel were trained as BBS observers, and nearly
13,000 BBS behavioural observations were recorded
during the year.
In 2019, Constancia implemented new safety
technologies in both the highway fleet that transports
concentrate from the site to the port and the mining
operation’s haul truck fleet. All trucks now have GPS
tracking and anti-fatigue sensors. Alarms are monitored
by a central dispatch group that alerts an operator if
they are exceeding speeds or if they are showing signs
of fatigue. The technology has reduced the number of
incidents within our haul fleet and significantly
improved our incident reporting.
Employees and contractors completed more than
39,000 hours of health and safety induction training
and over 73,000 hours toward the annual occupational
health and safety training requirement.
Hudbay 2019 Annual and Sustainability Report
| Our People
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CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
OUR APPROACH
MANITOBA
PERU
ARIZONA
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
Enhancing Employee Engagement
A major initiative in the Peru Business Unit during
2019 was the launch and rollout of a retention
strategy, which includes two pillars – engagement
and development.
Under the engagement pillar are five areas of focus:
• Leadership – ensuring people managers are
adding value to their teams by skillfully applying
10 managerial leadership practices (MLPs) that
include coaching, holding regular team meetings
and continually improving processes
• OneHudbay “How we work” – aligning with the four
objectives of the Company’s broader managerial
leadership system
• Needs – addressing compensation and other
workplace incentives such as work–life balance
• Environment – surveying employees on their
perceptions of their workplace climate
• Recognition – formally recognizing the valuable
contributions of team members
The development element of the strategy includes:
• Growth – implementing development plans, on-the-
job growth opportunities and training programs
• Realization – providing identifiable career paths,
facilitating promotions and creating succession plans
• Effectiveness – helping employees evaluate where
they succeed and how they can improve
• Awareness – building more effective teams and
developing leadership skills
• Transformation – learning new skills, managing
through change and continuously improving
The strategy is supported by action plans and metrics
that are tracked. Among the highlights in 2019:
• Succession planning identified 12 employees to
develop as key leaders.
• We invested more than $90,000 in specialized
training courses for 20 “high potential” employees,
and we promoted 121 employees.
• We provided 96% of employees at least one hour of
training at an investment of around $413 per person.
• In support of the target to implement the
performance effectiveness process, we conducted
training sessions and continued to reinforce the
change through ongoing communications.
• We conducted sessions on the 10 MLPs and
developed a system for managers to track the use of
the MLPs.
• Manager-once-removed (MoR) discussions continued
to be cascaded throughout the business unit, with
MoRs holding conversations with 70% of their
employees-once-removed.
The team also introduced “Constancia in 360°”, a virtual
reality tool that was initially developed to improve the
onboarding process with new hires. Its use was
expanded when it was shown to engage employees
and their families and help them better understand the
business. For example, employees who operate haul
trucks use the tool to learn what it is like to work at the
process plant, and, conversely, the process plant
employees gain an understanding of what is involved in
operating a haul truck.
Collaborating with Our Unions
We have a collective bargaining agreement with the
Unified Workers Union of Constancia Hudbay
(SUTRAMICOH). The agreement establishes the
working rules and other terms and conditions of
employment that apply to approximately 30% of the
employees in our Peru Business Unit. To date, we have
met all the contractual conditions of the agreement.
In March, we held a “shared vision” workshop with
union leaders to promote teamwork based on our
common objectives and to further strengthen the
relationship between management and union
leadership. The Labour Relations Committee – which
includes representatives from both the Company and
the union – held 11 meetings during the year to review
issues and work together on improving processes.
Outcomes from these meetings include a new Health
and Safety Committee, in which elections were held to
select members, and a satisfaction survey regarding
the food service.
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Arizona
At the end of 2019, we had 25 employees in our
Arizona Business Unit.
Soon after receiving the Section 404 Water Permit from
the US Army Corps of Engineers and approval of the
Mine Plan of Operations from the US Forest Service in
March 2019, our Arizona Human Resources team
initiated hiring for the project’s early works program,
which involved engineering and geotechnical work and
the construction of the site’s water and power
infrastructure. Around 50 people were employed
directly by Hudbay when, in July, a US District Court
judge issued a ruling that overturned the federal
permits and halted construction on the project. Hudbay
is appealing the ruling to the Ninth Circuit Court of
Appeals; however, because no construction can take
place during the appeals process (which is expected to
take approximately two years), we significantly reduced
our workforce in the business unit and put on hold
hiring up to 2,500 people for the project’s construction
phase. Four employees were transitioned to other
projects, including the New Britannia mill
refurbishment in Snow Lake, Manitoba, and the Mason
project in central Nevada. The current team in Arizona
is primarily focused on supporting litigations and other
ways to advance the project, while maintaining
continuing obligations including ongoing
environmental monitoring.
Because some of the environmental monitoring
activities are conducted by personnel working alone,
we developed a lone-worker policy to minimize the
related risk and put in place measures to ensure
their safety.
No lost time injuries occurred during 2019; however,
there were a few minor heat-related incidents with
personnel working on clearing the utility corridor
during the early works phase. These incidents
highlighted the need to ensure contractors were aware
of, and complying with, our policies and procedures.
Under the US Mine Safety and Health Act (MSHA),
personnel that work at a mine site in the US must
complete a three-day training program upon being
hired and an eight-hour refresher course every year
thereafter. During the ramp-up period, we held MSHA
training classes for new hires to ensure everyone had
been properly trained before going on site. Following
the court ruling, a Hudbay employee, who is an
MSHA-certified trainer, conducted all the refresher
training internally. During the year, all personnel
maintained compliance with this training requirement.
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SUSTAINABILITY APPROACH
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Social Impact
We recognize the positive impact we can make in building more sustainable and healthier
communities where we have a presence. To drive positive social impact, Hudbay invests in
socio-economic development opportunities and works to build lasting relationships with
those who live near our operations or are impacted by our activities.
LOCAL PROCUREMENT
($ millions)
COMMUNITY INVESTMENTS AND
CHARITABLE DONATIONS
($ millions)
2016
29.5
2017
49.8
2018
54.0
2019
58.8
2016
2017
2018
4.2
6.4
5.1
2019
8.1
$202.1
MILLION
$8.1
MILLION
paid in employee wages
and benefits
in community investments
and charitable donations
Peru’s Ministry of
Agriculture and Irrigation
recognized the
Chumbivilcas milk
processing plant for its
outstanding performance
and contribution
to the regional
agriculture industry
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CASE STUDY
Exchanging Knowledge
and Empowering
Local Communities
Since 2015, we have supported the North-South
Exchange Program – an example of international
co-operation that develops the capacity of rural
communities in Peru so that they lead their own
change. This unique program brings local community
leaders from the Chumbivilcas province in Peru to
Canada to see best practices in mining and business.
The program complements the Sustainable and
Inclusive Communities in Latin America (CISAL)
project – an initiative of the Federation of Canadian
Municipalities (FCM) that works to empower and
strengthen the capacity of local governments in
Colombia and Peru to achieve greater social benefits
and sustainable economic development for
communities near mining operations.
In 2019, 10 participants from the communities of
Uchucarco and Chilloroya and the districts of Velille,
Chamaca and Livitaca in the province of Chumbivilcas
travelled to Canada seeking partnerships for economic
empowerment and learning about how mining,
sustainable development and thriving communities can
coexist. During the visit, participants exchanged ideas
about how to build sustainable communities and
engage with mining companies to advance social,
economic and educational opportunities.
Because agriculture is an important livelihood in the
Chumbivilcas province, the group visited Harmony
Organic Dairy Products, Saugeen Country Dairy,
Glencolton Farms and Mapleton’s Organic Dairy Farm in
Kincardine, Ontario, to learn more about organic dairy
production methods.
In Timmins, Ontario, the group visited Newmont’s
Porcupine mine, where they met with the Chief of
Matachewan First Nation, the Timmins Police Service
Indigenous Advisory Committee and representatives
from Eighth Fire Solutions – a social enterprise that
encourages excellence in indigenous-led land
reclamation strategies – to discuss Porcupine’s
comprehensive closure plan, which aims to reclaim
historic mining sites to a state where the land can be
used productively by the local communities.
As in past years (and under an agreement between the
Institutes of Chumbivilcas and Northern College),
participants visited the Northern College of Applied
Arts and Technology facilities in Timmins to explore and
develop education and training opportunities. The
group also met with representatives of the National
Indigenous Economic Development and the
Progressive Aboriginal Relations, and members of
Hudbay’s senior management team.
Since 2015, 50 Chumbivilcanos leaders have
participated in the program.
Showing Gratitude for Community
Support after Camp Fire
At our Lalor operation near Snow Lake,
Manitoba, many of the people who work at
the mine live far enough away that they stay
at Lalor’s accommodation camp during their
work shift. In July 2019, a fire outside the
camp’s kitchen not only destroyed the
kitchen, but also caused significant damage
to the sleeping accommodations, leaving
more than 250 Hudbay employees and
contractors with nowhere to stay.
The residents of Snow Lake – a town of
about 900 people – immediately stepped in
to help, preparing meals and opening up
their homes to anyone in need. The actions
and support of the community members
were pivotal in helping Hudbay quickly
return to normal operations.
To thank the town, we held a barbecue in
September as a way to reach as many
people as possible. Large mining machines
were on display, and the local fire
department brought a fire truck as an
attraction for kids and adults alike. Games,
prizes and other activities took place
throughout the day. Hudbay employees
volunteered their time and talents,
including baking a party-sized cake, grilling
burgers and painting fun art on kids’ faces.
The event attracted more people than
expected, with over 400 people attending.
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Our Approach
Economic Contributions
Our positive contribution to sustainable development
includes providing jobs, contracting with suppliers,
paying taxes and royalties, and investing in the
development programs and infrastructure priorities
that address the challenges most relevant to the
communities in which we operate.
Under our Code of Business Conduct and Ethics and
Statement on Anti-Corruption, all government
payments must comply with the laws of the
jurisdictions where we operate, including Canada’s
Corruption of Foreign Public Officials Act and the US
Foreign Corrupt Practices Act. We support global
initiatives to improve revenue transparency and fight
corruption. The Extractive Industries Transparency
Initiative (EITI) aims to enhance revenue transparency
and accountability in the extractive sector, and as a
member of the Peruvian Mining Society, we support
the EITI process in Peru, where the government has
implemented significant aspects of the EITI
requirements and is fulfilling its broader objectives. In
Canada, the government’s Extractive Sector
Transparency Measures Act (ESTMA) provides an
equivalent level of reporting to the EITI standard. In
accordance with the Act, we filed our annual ESTMA
report, which details our government payments for
the 2018 fiscal year, in May 2019.
Community Relations
Our ability to conduct mining activities is closely tied to
the strength of our relationships with the communities
near our operations, projects and exploration sites.
Our reputation as a leader in community relations in
Peru – a country where civil unrest is not uncommon –
is evidence of our commitment. In Canada, our culture
of building genuine relationships with First Nations
communities is reflected in our ability to gain
acceptance and navigate potential conflicts that may
arise during all stages of the mine lifecycle.
The processes and requirements for strengthening
relationships throughout the life of the mine are
described in our Stakeholder Engagement Standard. All
operations, development projects and exploration sites
are required to identify relevant stakeholders, conduct
analyses, and create stakeholder engagement plans
that establish mutually acceptable processes with key
stakeholders. Site-based community response
mechanisms are accessible for local stakeholders to
record complaints and grievances. We investigate all
such matters with the goal of providing timely
resolutions and remedies, as appropriate.
Indigenous Engagement
Our community relations and stakeholder engagement
approach includes respecting the cultures and heritage
of all communities near our operations and activities,
and ensuring we understand that indigenous peoples
have distinct rights, culture and history as well as
unique connections to the land and water.
At our operations and exploration sites, we develop
archaeological monitoring and cultural resource plans,
in consultation with relevant community members and
groups, to identify and protect cultural artifacts
discovered at our sites.
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As part of our membership in the Mining Association
of Canada (MAC), we have been applying the Towards
Sustainable Mining (TSM) Aboriginal and Community
Outreach protocol to assess and measure our
performance in the areas of engaging communities of
interest, including indigenous groups, in meaningful
dialogue and decision-making. In December 2019,
MAC adopted a new TSM Indigenous and Community
Relationships protocol, which is an extensive update
to the current protocol. The update seeks to improve
performance through new indicators that measure the
effectiveness of indigenous engagement. It adds an
explicit commitment to strive to obtain free, prior
and informed consent (FPIC) of indigenous peoples
directly affected by new projects and expansions. It
also incorporates Canada’s Truth and Reconciliation
Commission’s Call to Action 92.iii, which urges
businesses to educate personnel on indigenous history
and provide skills-based training on intercultural
competency and human rights. Hudbay will begin
reporting on the revised protocol in 2022 using 2021
performance data, in accordance with the scheduled
implementation timeline.
Local Hiring and Procurement
We recognize that employment and business
opportunities are high priorities for community and
government stakeholders. We prioritize local
employment, and we work to build capacity among
local workers and suppliers to generate economic
benefits and create stronger relationships.
Under our Local Procurement and Employment (LP&E)
Standard, each site identifies opportunities for hiring and
sourcing goods and services from the local communities.
We engage local stakeholders to maximize local job
and procurement opportunities and often incorporate
these commitments into formal community
agreements. We also support government programs,
as well as opportunities prioritized by the communities,
to build local capacity for both mining jobs and other
livelihoods suitable for the community. This includes
investments in agricultural industries, and in training
and skills development programs conducted by Hudbay
and through partnerships with universities, technical
institutes and other organizations.
Community Development
Our presence in a community can stimulate social and
economic development and catalyze the diversification
of the local economy.
Early in the mine lifecycle, we engage with the
communities in order to understand their social and
economic priorities and support the programs that
address their needs and ambitions. In some cases, we
have formal community agreements that detail our
commitments. For example, in Peru, we enter into
community-owned land-use agreements as well as
formal community investment agreements that detail
our commitments to invest in health, education and
social development. Multi-stakeholder committees,
which include Hudbay and local representatives,
approve and oversee the projects specified in the
agreements. We work with government agencies,
community development organizations and other
partners that have the expertise and knowledge to
strengthen the effectiveness of these programs.
Our Community Giving and Investment Standard
outlines the requirements and process for contributions
and investments. It emphasizes community involvement,
mutual benefits and partnerships. Our community
investments are largely focused on infrastructure and
socio-economic development initiatives that build
resiliency, advance sustainable livelihoods, and help
communities avoid dependency on the mine during
operations and after closure.
Our Corporate Office Giving Plan applies the
Community Giving and Investment Standard at the
corporate level. The plan offers employees paid time
off one day each year to volunteer, and includes
guidelines related to matching donations. Under the
plan, we support Youth Without Shelter (YWS), a
Toronto-based charitable organization that provides
shelter, education and training to homeless youth. YWS
was selected due to its alignment with Hudbay’s values,
the broad support of our employees, and our ability to
make a positive impact on the organization’s goals. In
2019, Hudbay sponsored the “Cover Me Urban” annual
event, which raised funds for YWS’s Life Skills and
After-Care programs that, together, have helped more
than 1,000 youth find a safe place they can call home.
Resettlement and Land Use
We seek to avoid the need for resettlement. However,
when resettlement is unavoidable, we engage with those
impacted – with communities, governments and other
key stakeholders – and follow a process that adheres to
international standards. This includes IFC Performance
Standard 5, which advises companies to minimize adverse
impacts on those displaced through measures such as
fair compensation and ensuring that those affected are
actively consulted and participate in the process. No
resettlement activities took place in 2019.
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Manitoba
Hudbay has discovered, mined and closed more than
25 mines in Manitoba over the past 90 years. We
recognize that our activities can have a positive
socio-economic impact on the communities near our
operations in northern Manitoba and Saskatchewan, as
well as presenting challenges when mining operations
cease. We are committed to building long-term
relationships, creating partnerships and developing
programs to ensure a lasting, positive impact.
Maintaining Roots and Planning for the Future
Hudbay has been mining in Flin Flon, Manitoba, for
more than 90 years and processing zinc since 1930.
Because Hudbay is the primary contributor to the Flin
Flon economy, we explored all options to maximize the
existing assets in Flin Flon and maintain a presence that
supports jobs and the broader economy. However, the
Company determined that, based on the depletion of
available ore, mining at the 777 mine would cease by
the end of 2022, at which time the Flin Flon mill and
zinc plant would cease operations. The mill will be put
on care and maintenance to maintain regional
optionality, but this is not expected for the zinc plant.
A key aspect of our closure planning is engaging the
community on a plan to support the social and economic
transition. In 2019, we continued a process that began in
2018, meeting with the nearby communities’ mayors
and local officials to update them on our closure
activities and discuss opportunities to minimize the
impacts of closure to the greatest extent possible.
We are planning as far as possible in advance for
closure. In 2022, with operations ceasing in Flin Flon,
we expect to have a smaller presence in Flin Flon for
some administrative, exploration and environmental
functions, with the transition to a larger Snow Lake
operation, which includes Hudbay taking over the
development, drilling and maintenance activities
currently being completed by contractors at Lalor mine,
and the restart of the New Britannia mill. With the New
Britannia mill refurbishment project, the recently
discovered 1901 deposit and increased production at
Lalor, we are building a future in northern Manitoba
that is centred around our activities in Snow Lake.
As we expanded our presence in the Snow Lake region,
we demonstrated our commitment to support the
town of Snow Lake with a new five-year grant-in-lieu
(GIL) agreement. Previous agreements had been
for only one year, which made it challenging for both
the town and Hudbay to plan for the long term.
The five-year pact provides additional funds for the
community’s operating budget, as well as a
contribution toward the town’s infrastructure projects.
We also committed to strengthening the relationship
with the town’s council through ongoing meetings.
Creating Long-Term Relationships with
First Nations and Communities of Interest
In our Manitoba Business Unit, we engage with several
First Nations communities of interest near our mining
operations and exploration activities.
Our dedicated Indigenous Liaison Officer (ILO) works to
build mutual understanding and positive relationships
between Hudbay and First Nations communities near our
operations. The ILO works to bridge cultural gaps through
meetings and job fairs, indigenous community activities
and events, cultural awareness training for employees,
and conflict resolution. The Manitoba operations have
stakeholder engagement plans, and the ILO supports the
completion of the indigenous-specific plans.
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2019 Performance
We invested $301,900 to support a wide range of
community programs. Major contributions during the
year included:
• $30,000 corporate donation to the Flin Flon Bombers
• $25,000 to the Town of Creighton Economic
Development Commission
• $10,000 to the Snow Lake Centre on Family Violence
• C$25,000 toward Indspire, an indigenous-led
charitable organization that invests in education for
indigenous people, including scholarships for
indigenous students from Ontario and Manitoba
There were a total of 111 complaints registered in
2019, of which 109 were union labour grievances, and
two were community grievances related to property
concerns and unscheduled blasting. Labour grievances
related to collective agreements are managed through
a different process than that used to address
community grievances.
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In support of our indigenous engagement strategy, we
aim to meet with the five First Nations communities of
interest near our operations at least twice per year to
improve our understanding of their concerns and
capacity. Outcomes from these activities include being
invited to meet with the Mathias Colomb Cree Nation,
an important step toward resolving a previous conflict
in 2013. The meeting was key to establishing a
relationship that we are committed to strengthening.
As a positive sign of progress, the community asked
Hudbay representatives to attend the graduation
ceremony for students from the community.
Fostering economic opportunities is a key element of
our engagement strategy. In addition to the indigenous
hiring project at Lalor that we discuss in the Our People
section of this report, we developed a northern
procurement policy. The policy includes a rating system
and aims to help increase opportunities for indigenous
contractors or indigenous-owned businesses to work
with Hudbay. To ensure potential suppliers understand
our local procurement standards and processes, we
hosted two economic development workshops (one in
the spring and one in the fall) with indigenous
communities. A focus for 2020 is continuing to identify
and build indigenous business capacity and qualified
workers. In 2019, payments to suppliers in northern
Manitoba and northwest Saskatchewan totalled
$188.7 million, of which approximately $4.1 million was
awarded to indigenous businesses.
We continued to address Canada’s Truth and
Reconciliation Commission’s Call to Action No. 92,
which directs corporations to play a role in
reconciliation through actions and participation in
events that build cultural awareness and mutual
understanding. Our traditional knowledge holders
program at New Britannia invites traditional knowledge
holders to help assess the impacts of our activities on
the environment and the community. In 2018, the
program involved traditional knowledge holders joining
biologists to walk the entire length of a proposed
pipeline corridor between Lalor and the New Britannia
mill. In 2019, we held additional outings in Snow Lake.
For 2020, we are looking to expand the program to
include marginalized voices within the community
including women and youth.
In 2019, our ILO led six one-day Indigenous Cultural
Awareness workshops with 74 employees that
addressed historical and contemporary indigenous
issues (e.g., treaties, foods, traditions, protocols).
Indigenous elders were also invited to participate in the
workshops to improve employees’ understanding.
Through our partnership with the Flin Flon Aboriginal
Friendship Centre, employees, along with their families
and friends, participated in two sweat lodge ceremonies
over the summer months that expanded their
knowledge about the indigenous approach to wellness.
In 2020, we hope to obtain land so we can expand the
sweat lodge ceremonies to the Snow Lake area. In
September, Canada’s Governor General Julie Payette
toured Hudbay’s Flin Flon facilities and helped celebrate
Culture Days by joining a walk with community members
along the shores of the town’s Ross Lake.
We maintained our bronze certification level for the
Canadian Council of Aboriginal Business’s (CCAB)
Progressive Aboriginal Relations (PAR) program. The
PAR program verifies and benchmarks corporate
performance in indigenous relations in Canada across
four areas: employment, business development,
community investment and community engagement.
For the 2018 TSM Progress Report’s Aboriginal and
Community Outreach protocol, our Manitoba Business
Unit addressed the gaps related to stakeholder
engagement recordkeeping, bringing our B rating in
the 2017 report back up to the A level that we expect
to achieve.
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Peru
In Peru, our commitment to creating shared value
and building strong, long-term relationships with
the communities near our operations and other
key stakeholders is evidenced by the more than
90 agreements we have entered into with local
communities and governments since 2011.
Holistic Approach to Shared Value and
Community Relationships
During 2019, roadblocks by those protesting other
mining operations in the southern Peru region
highlighted the effectiveness of Hudbay’s focus on
building shared value and addressing potential social
conflicts before they arise. Although the blockades
temporarily delayed the transport of concentrate to the
port of Matarani, there were no community protests
that directly impacted our Constancia operation.
Constancia is in a very rural part of Peru, and we
recognize that the communities in both our direct
and indirect areas of influence have needs that
employment and direct contributions alone cannot
solve. Our approach to shared value includes
formalizing short-term and long-term commitments
and expectations through stakeholder agreements.
Rather than having one agreement that covers all
stakeholders in the region, we have separate
agreements at all levels – national, regional, provincial,
district, local and community. These agreements go
beyond local jobs and business opportunities and
articulate the long-term vision for the communities.
This includes supporting efforts to bring the resources
of the national, regional and local governments closer
to the communities, and partnering with organizations
that have the expertise needed to deliver the programs
the communities have prioritized.
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We applied this approach with the community of
Chilloroya, with which we successfully reached an
agreement on the Pampacancha surface rights in early
2020. The same approach is being implemented with
the communities near the exploration targets close to
the mine as we work to consolidate the land package
around Constancia. During the year, we continued to
expand our social base of support by identifying and
engaging with as many stakeholder groups as possible
in addition to community leaders. These stakeholders
included elders, women, former resettled families and
youth groups.
Having a Direct Economic Impact through Jobs
Our commitment to the communities near our
Constancia operation includes identifying and providing
local employment and procurement opportunities.
Nearly 20% of the economically active population of the
nearby communities (mainly from Uchucarco and
Chilloroya) works at Constancia, and their combined
monthly earnings of around $204,000 significantly
contribute to the local economy. Additionally, Hudbay
and its contractors procured around $14 million in goods
and services from local businesses during 2019. We
continue to identify additional opportunities to expand
our local employment and procurement efforts.
For example, we are working with our main contractor
(Stracon) to train local personnel (30 people) on
operating heavy equipment. If participants complete
the program, Stracon will hire them. Currently,
more than 40% of our mining operators belong to
nearby communities.
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2019 Performance
We invested more than $4.5 million to support a wide
range of community programs. Notable contributions
and efforts during the year included:
• Investments of $1.91 million in heavy equipment and
agricultural trucks and $1.17 million in street and
sidewalk improvements in the district municipality of
Livitaca
• $1.07 million in heavy equipment for road
maintenance in the district municipality of Chamaca
There were 76 grievances registered in 2019, 49 of
which were related to procurement matters between
Hudbay and its suppliers, including issues related to
delays in payments or reimbursements.
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Developing Independent Communities
To fulfill the commitments in our stakeholder
agreements, we use a multi-stakeholder approach
based on sharing responsibility, generating further
opportunities and empowering communities in
their development.
One of the most successful efforts to support
economic diversification is the Cullahuata Dairy
Processing Plant, which is located in the province of
Chumbivilcas. In collaboration with the local
government, Hudbay built the dairy plant, trained
community members to develop the technical skills
required to efficiently run the plant and worked with
the national government to co-fund the plant’s
machinery and equipment. The plant, which processes
milk, cheeses and yogurts, develops aptitudes and
provides employment opportunities that are
independent of mining operations. In 2019, the plant
was recognized for outstanding performance by Peru’s
Ministry of Agriculture and Irrigation, and it was
awarded the best Tilsit cheese in the country at the
XVI National Cheese Festival.
Under the country’s “Works for Taxes” – an innovative
public–private funding mechanism – companies can pay
a portion of income taxes in advance by funding public
works and then receive a tax certificate for 100% of the
investment once the project is delivered. In 2020, we
will begin developing our second “Works for Taxes”
project – an integrated health system to serve
approximately 70,000 people who live in the province
of Chumbivilcas. The project, which is supported by
Peru’s Health Ministry, includes rural health care,
transportation (e.g., ambulances) and telemedicine.
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Arizona
Our Rosemont copper project is near the communities
of Green Valley, Sahuarita and Vail as well as Tucson, a
large metropolitan city in southern Arizona. With more
than 1 million people living in the Tucson area, the
project has numerous stakeholder groups, and our
approach must deal with the challenge of managing
diverse – and at times conflicting – interests.
Engaging Stakeholders during Early Works
Following a 12-year permitting and public review
process involving 18 governmental agencies, more than
1,000 studies and 43,000 comments from the public, in
March 2019 the Rosemont project was cleared to move
forward with construction upon receipt of the Section
404 Permit from the US Army Corps of Engineers and
approval of Rosemont’s Mine Plan of Operations from
the US Forest Service.
Soon after, we commenced an early works program to
construct a water pipeline and power transmission line,
advance engineering and geotechnical work, and
initiate archaeological site work and mitigation
activities. In tandem with these efforts were significant
stakeholder communications and outreach, including
presentations to community groups about specific
projects and plans for the remainder of the year. We
also launched social media sites to engage with the
public and keep them informed about the project’s
progress. To gauge public sentiment about the
proposed mine, we commissioned two polls that asked
residents if they supported or opposed the project.
Both polls showed greater public support for the
project than opposition.
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Making Adjustments after Court Ruling
Despite our efforts to assemble what we believe is
an exceptional mine plan with innovative mining
techniques and environmental mitigation measures,
a federal court ruling at the end of July suspended
work on the proposed mine. In December, the US
Department of Justice joined Hudbay in filing a formal
notice appealing the ruling, and we are optimistic
that we will ultimately prevail, but the appeals process
will take approximately two years. While we have
maintained our stakeholder engagement approach,
we have had to discontinue some community programs
and sponsorships as part of our need to contain costs.
One program impacted by the court decision is the
Residential Water Well Protection Plan, which we have
suspended during the appeals process. The program
covered the cost of insurance, monitoring and repairs
for more than 300 families on 144 residential wells
near the town of Sahuarita. Given that there will be no
construction or groundwater pumping for several
years, there will be no potential impact on wells from
the project.
Other social commitments that are on hold pending
the outcome of the legal challenge to the court ruling:
• $650,000 to relocate approximately 10 miles of the
Arizona Trail
• Between $6.5 million and $7.5 million on road
infrastructure improvements on a 12-mile stretch
of the state highway leading to the project’s
entrance road
• $25 million endowment trust fund, managed by a
Board of Trustees, to fund priority community
projects including recreation, cultural, and
environmental conservation projects
• $500,000 in annual community donations per year
(following the start of operations) to support
community giving programs
Our team in Arizona is applying the knowledge we have
gained with Rosemont to the Mason project in central
Nevada. During the year, we conducted a stakeholder
assessment, developed a stakeholder map and donated
$5,250 to charitable organizations directly benefiting
the town of Yerington, which is the closest community
to the project.
2019 Performance
Spending on local procurement during the year was
$7.0 million with local businesses and $10.79 million
to suppliers throughout Arizona, with 80% of that
spending occurring before the court ruling. We
invested $120,000 in 2019 to support a wide range
of community programs.
One program we will continue is Hudbay Rosemont
Copper School Grant Program. The grant program
awards between $500 and $5,000 to local public
schools’ STEEAM (Science, Technology, Engineering,
Environment, Agriculture and Math) programs for
students. In 2019, we awarded 20 grants totalling
nearly $20,000.
No complaints were formally registered through our
grievance system in 2019. However, we addressed an
issue raised by community members in Sahuarita,
where one of our contractors driving a truck caused
damage to a curve while taking a turn too fast.
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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.
TOTAL GREENHOUSE GAS EMISSIONS
(kilotonnes of CO2-equivalent and intensity)
Indirect
Direct
Intensity
DIRECT ENERGY CONSUMPTION
BY PRIMARY ENERGY SOURCE
(terajoules)
Propane: 26% (615 TJ)
Diesel: 74% (1,794 TJ)
MBU PBU ABU
MBU PBU ABU MBU PBU ABU MBU PBU ABU MBU PBU ABU
MBU PBU ABU
MBU PBU ABU
2016
2017
2018
2019
9.1%
1.0%
decrease in water
consumption
decrease in energy
consumption
Manitoba Business Unit
received the Mining
Association of Canada
Leadership Award for
its 2018 performance
against the
Towards Sustainable
Mining initiative
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In Manitoba, our Flin Flon tailings impoundment system
(FFTIS) has been in service for 90 years. Part of the original
FFTIS was constructed using the upstream method. The
dam’s north and west expansions were constructed using
the more robust downstream method.
We are taking steps toward further improvements in
line with higher industry-wide standards for tailings
dam safety. In the spring of 2019, we held a public
meeting with local community leaders and members to
present our tailings management approach, listen to
their concerns and receive feedback. We are
incorporating this input into our plans, as well as
insights from recent tailings storage facility failures at
other mining operations, and are working with our
engineer of record to identify opportunities that will
further improve dam stability, particularly in the areas
previously constructed using the upstream method.
Construction work to implement these improvements
and enhance the factor of safety (a measure that
In 2019, Constancia conducted extensive progressive
reclamation work in a 13-hectare area known as the
Esperanza Quarry. The activities, which occurred over
the second half of the year, included adding nearly
30,000 cubic metres of organic soil and 615 kilograms
of native grass, and planting more than 26,000 native
tree seeds from our nursery in the area. The process,
which was developed in partnership with the
communities, uses traditional techniques to control
erosion and enhance the biodiversity value of the
reclaimed landscape.
compares the design strength of a structure to the
stresses put on it) associated with the FFTIS is
underway, and will involve spending of approximately
$20 million per year from 2020 to 2022. These upgrades
align with the anticipated revisions to the Canadian Dam
Association’s (CDA) Dam Safety Guidelines.
In addition to the multitude of measures in place to
prevent a tailings dam breach, we have emergency
response plans should such an unlikely event occur. In
2019, we ran inundation models (i.e., an analysis of
impacts from a hypothetical dam failure) that
incorporated updated data from recent dam failures at
other companies to improve our emergency response
plans and identify opportunities to reduce or mitigate
risks. As a result of the study in Manitoba, we began
constructing diversion berms that would redirect the flow
of slurry and water away from residential and other public
areas in the unlikely event of a dam failure. Construction
of the berms is expected to be completed by mid-2020.
CASE STUDY
Preserving Biodiversity
through Progressive
Reclamation
CASE STUDY
Improving Tailings
Safety in Manitoba
At our Constancia operation in Peru, annual biodiversity
action plans detail the objectives and activities we
undertake to achieve no net loss of biodiversity, and,
when possible, leave the overall ecosystems and
biodiversity of the area in a better condition than
before mining took place.
One way we achieve this outcome is to “clean up as
we go” – technically referred to as progressive
reclamation or concurrent reclamation – which involves
reclaiming portions of our sites as soon as they are no
longer required for mining rather than waiting until
operations cease.
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Our Approach
Hudbay’s commitments to safeguarding the
environment and being good stewards of natural
resources are expressly stated in our Environmental
Health and Safety Policy. The policy requires all
operations and exploration sites to comply with the
laws and regulations in each jurisdiction where we
operate and maintain (or achieve within two years of
commencing production) an environmental
management system that is certified to the ISO 14001
international standard.
One measure of the effectiveness of our approach is
ensuring compliance against our corporate management
standards, which are largely aligned to the Mining
Association of Canada’s (MAC) Towards Sustainable
Mining (TSM) environmental protocols and frameworks.
As a member of MAC, we commit to annually assess our
performance against the TSM indicators at our Canadian
operations, and we voluntarily do so at our operations
outside of Canada. The goal is for each facility to achieve
a level A or higher (on a five-point scale, from level C to
AAA) for all protocols within two years of reaching
commercial production or beginning operations under
Hudbay’s control.
Our performance is also reflected in productivity and
efficiency improvements that often go hand-in-hand
with improved environmental management. For
example, reduced fresh water use and higher recycling/
reuse rates help lower costs and reduce maintenance
requirements, and fewer idling haul trucks lower fuel
costs and GHG emissions.
Land and Biodiversity
We recognize that our business activities can impact
biological diversity, and stakeholders expect us to
maintain healthy ecosystems and conserve biodiversity
from the earliest stages of exploration and
development through production and closure.
The objective of our Biodiversity Conservation Standard
is to positively contribute to the conservation of
biodiversity. Each site must identify environmental
conditions – such as threatened and endangered
species, protected areas and critical habitat – and the
potential impacts Hudbay’s activities may have on
biodiversity and ecosystem services. Site-specific
biodiversity and ecosystem services management plans
must apply the following four key steps of the
mitigation hierarchy:
1. Avoid impacts by locating facilities and
infrastructure away from significant biodiversity
aspects and critical habitats.
2. Minimize impacts through the use of appropriate
management systems, mine designs and operating
plans that limit land disturbance throughout the
mine life.
3. Restore ecosystems by progressively rehabilitating
affected areas during operations and at closure to
mitigate the impact over time through preservation
or maintenance.
4. Offset residual impacts through programs to
compensate for biodiversity losses by enhancing
ecosystems in nearby areas.
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Our standard aligns to, and supports our
implementation of, the TSM Biodiversity Conservation
Management Framework and protocol, and the IFC
Ecosystem Service Performance Standard. Included in
the framework are commitments to engage with
communities of interest about biodiversity policies and
practices, to comply with the requirements of legally
designated protected areas, and to not explore or
mine in World Heritage sites. In 2019, the MAC Board
reviewed the TSM Biodiversity Conservation
Management Framework and protocol. Although
some minor updates were added, the overall intent
remained the same, and we do not expect the changes
to impact how we assess our operations.
Through monitoring programs, we track the
effectiveness of our management plans and
continuously improve our performance.
Energy Use and Greenhouse Gas Emissions
Mining and mineral processing is energy-intensive,
and Hudbay is committed to identifying and pursuing
economically viable opportunities to improve energy
efficiencies and reduce greenhouse gas (GHG)
emissions at our operations to better manage climate-
related risks and opportunities.
In alignment with the TSM Energy and GHG Emissions
Management protocol, we annually report on the
processes, management systems and reporting
mechanisms we have in place to effectively manage our
energy use and GHG emissions. Under the protocol, we
set performance targets for each facility and annually
report on our performance against those targets.
We also report our global GHG emissions data and
performance to the CDP (formerly the Carbon
Disclosure Project).
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Our energy use and GHG emissions are greatly
impacted by factors outside of our control, including
the availability of renewable energy sources, weather
(particularly in Canada during the winter months) and
operational inputs (such as mining deeper or further
and changes in ore composition). Because it is very
difficult to establish a “baseline” of energy efficiency,
our targets are incremental annual objectives to
improve our performance related to energy use, GHG
intensity of our energy supply, water, mineral waste
and land disturbed, and establish eco-efficiency
measures in our capital approval process.
Compared to the prior year, our direct energy
consumption decreased 6.2%, and indirect energy
consumption increased 1.4%. Our energy intensity
increased 2.2%. Our total GHG emissions decreased
1.8%, and GHG intensity increased 2.9%, the latter
largely due to a decrease in our ore grade, processing
more ore, and the deeper mines resulting in hauling
ore a farther distance.
Air
We do not have any major point source air emissions
(i.e., stack emissions or releases through a confined air
stream). Our primary air emissions are forms of
particulate matter (such as dust and fuel emissions)
generated by activities including blasting, excavating
ore and vehicles travelling on unpaved roads.
To ensure the air quality on and near our sites is safe for
people and the environment, we implement dust
management controls, conduct monitoring, and report
our air emissions to ensure full compliance with air quality
laws and regulations in the countries where we operate.
Our total particulate emissions increased 17%
compared to 2018, largely due to a combination of
less rainfall and snow cover in Manitoba in 2019, which
significantly reduces dust mitigation on the roads.
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Water
Water is vital for healthy communities and ecosystems,
and it is also essential to our operations. Our water
management approach aims to prevent unnecessary
pressure on a shared resource, operate without conflict
with other water users and minimize our impact on
water resources.
Each site develops a water management plan that
addresses its unique water needs and challenges and
assesses water quality, quantity, availability and the
needs of local communities and other water users.
These plans are developed during the feasibility stage
as part of the site’s environmental impact studies. To
ensure water risks and considerations are assessed
throughout the mine life cycle, the plans are regularly
reviewed and updated. None of our current operations
are located in any water-stressed areas, so the sites’
current focus is on water discharge quality.
In 2018, MAC added a new Water Stewardship
protocol, which includes four performance indicators:
water governance, operational water management,
watershed-scale planning, and water reporting and
performance indicators. The protocol requires that
water-related plans and management systems include a
water balance, a water monitoring program, and
response and contingency plans for water-related risks
and incidents. Sites must engage with other water
users and communities of interest in the watershed
and participate in watershed-scale planning. To achieve
level A for one of the new indicators, the site must have
a water-related objective or target to measure
performance. As a member of MAC, we will implement
the updated protocol over the next year and publicly
report against the protocol beginning in 2021.
Since 2010, we have disclosed our water management
performance in CDP’s annual Global Water Report.
In 2019, the amount of total water withdrawn
decreased 9% and water discharged decreased 15%
compared to 2018. The amount of water our
operations discharge can be impacted by precipitation.
Total water recycled or reused was approximately
342% of our total water use.
Waste and Tailings
Mining and ore processing activities produce waste
byproducts including waste rock (overburden that has
no economic value) and tailings (the material that
remains after the minerals have been extracted from
the crushed ore).
All Hudbay operations have plans in place to reduce,
reuse, recycle and responsibly dispose of hazardous
and non-hazardous waste, with a particular focus on
managing waste rock and tailings (a more detailed
discussion on the latter is included in the Tailings
Stewardship section of this report).
Sites must manage waste rock in accordance with
environmental regulations and industry standards and
in a manner that minimizes the potential for acid rock
drainage (ARD), which is caused by a chemical reaction
when certain minerals in the rock are exposed to air
and water. Waste rock and tailings may be classified as
potentially acid generating (PAG) or non-acid
generating (NAG). To minimize and mitigate the
potential impact of PAG-classified material, we reuse,
where possible, or dispose of PAG material in contained
areas that are engineered to prevent acidic runoff.
During the year, we generated 1% less overburden
waste, approximately the same waste rock and 2.3%
more tailings compared to the previous year. The
amount of waste produced varies depending on the
stage of the mine lifecycle (i.e., more overburden when
developing mines).
Closure and Reclamation
We believe successful mine closure begins during the
design phase of a project’s development and continues
throughout the mine’s lifecycle.
Our closure plans ensure compliance with all legal
frameworks and regulations within the jurisdictions
where we operate. They also align with TSM’s Mine
Closure Framework, which goes beyond jurisdictional
legal and regulatory closure plan requirements to
address commitments related to working with
stakeholders – in particular, the communities closest to
our mines – to develop mine closure plans that mitigate
the socio-economic impact of closure.
These plans include identifying opportunities to
conduct progressive rehabilitation once the areas are
no longer needed for mining. Closed mine sites are
rehabilitated to an agreed-upon beneficial post-mining
use that is as close as is practical to its pre-use
condition. Post-closure activities include maintenance
and monitoring to ensure closure objectives are
progressing successfully and as intended.
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One example of the business unit’s efforts to improve
eco-efficiency was at Lalor, where they trialled mobile
fueling. Rather than scoop operators spending time
driving to fuel bays and waiting in line to refuel, we
purchased a fuel truck operated by a mechanic
apprentice who drives to where the scoop operators are
mucking. The trial resulted in fuel savings from less idling
and greater productivity, with operators spending
around 0.5 more hours (in a 12-hour shift) scooping.
Investing in Safe Tailings Storage
In 2019, the business unit conducted a significant
amount of work on the operations’ tailings storage
facilities (TSFs). We discuss these updates in detail in
the Tailings Stewardship section and the Improving
Tailings Safety in Manitoba case study.
Manitoba
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The Manitoba Business Unit’s total water consumption
decreased by 5.3% compared to 2018, and water
consumption intensity increased by 0.8%.
The electricity used to run our processing plants is
renewable hydroelectricity sourced from Manitoba
Hydro, which keeps our greenhouse gas (GHG) emissions
and intensity relatively low. We use propane for some
infrastructure for heating and diesel to run the mobile
equipment that extracts and transports ore. Reaching
the end of the mine life at the 777 operation impacts
our energy consumption due to the need to mine
deeper, haul material farther, and mill more material.
Our overall energy usage and energy intensity increased
by 3.6% and 2.2%, respectively, compared to 2018.
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Another major project during the year was preparing
and submitting the permit to establish a 6.8-kilometre-
long pipeline corridor linking the New Britannia mill
with the Anderson tailings impoundment area (TIA) via
the Stall mill at Lalor.
The corridor will contain three surface pipelines, with
one pipeline carrying tailings generated at the New
Britannia mill to the Stall concentrator for deposit in
the Anderson TIA or to Lalor’s paste backfill plant,
which transforms tailings into a paste that is pumped
underground to backfill and stabilize voids. A return
water pipe will send water reclaimed from the
Anderson TIA to the New Britannia mill. The copper
concentrate produced at Stall will be pumped to the
New Britannia mill via a third pipeline. The pipeline
route is located along an existing hydro right-of-way,
so the project requires very little site preparation
work and minimal environmental impact. The required
permit for this work has been obtained, and
construction on the project is planned for the summer
months in 2020.
Adapting Activities to Protect Species
Hudbay is a long-time supporter of Manitoba’s provincial
Boreal Woodland Caribou Recovery Strategy. The
comprehensive multi-year plan supports recovery efforts
and protection of the woodland caribou in northern
Manitoba and includes extensive research on caribou
migration routes. We use the data from the studies to
assess any impacts our exploration, development and
operating activities have on the species.
Because the data indicated that there were caribou
calving near our Snow Lake operations, we altered the
construction plan for the Anderson tailings facility to
avoid any impacts (e.g., blasting) during the calving
season. We will also incorporate this approach into the
New Britannia mill refurbishment work.
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Ensuring a Lasting Legacy
At the Reed site, where operations ceased in mid-2018,
we continued to apply best practices to achieve positive
closure outcomes. In consultation with Manitoba
Sustainable Development, we conducted environmental
monitoring and analyzed the site conditions to ensure all
waste rock and contaminated materials had been
removed from the site before revegetating the area. To
encourage natural revegetation, which is the Manitoba
government’s preferred method, in 2020 we will
conduct soil preparation work including scarification –
a technique that breaks up the topsoil and allows for
proper seed germination.
The successful approach to closure at Reed will be
applied to our future closure plans. With the 777 mine
expected to cease operations in 2022, we have begun
to implement our closure plan. Because the Flin Flon
complex crosses the Manitoba–Saskatchewan border,
we are in the process of completing the five-year
update to the decommissioning plan, which is a
Saskatchewan regulatory requirement.
In Flin Flon, the tailings pond tends to thaw earlier in the
spring than other water sources in the area, becoming
the preferential landing spots for migratory birds.
Because some of the facility’s areas store water that is
low in pH (i.e., acidic) and can be harmful to birds, we use
propane-powered bangers during the day to deter the
birds from landing. However, this method can result in
noise complaints since this area is close to the
communities. In 2019, we completed the construction of
a spillway that moves water away from the communities,
so birds will no longer land in the area.
To help prevent dust events that can occur when
temperatures drop, the tailings dry out and the winds
pick up, we place straw on top of the tailings ponds. As
a dust cover, the straw works better than any chemical
or sand product. However, certain varieties can attract
birds, and for the tailings areas with low pH, we have to
be very selective with the type of straw we use. During
the year, we continued to test varieties of straw to find
the right type to use in the low-pH areas.
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Peru
Achieving Key Environmental Objectives
The Peru Business Unit establishes annual key
performance indicators (KPI) across three areas:
environmental management, environmental quality
and sustainability. The sub-indicators include
inspections and audits, environmental incidents and
training, water quality and consumption, and per capita
energy use and GHG emissions. In 2019, the business
unit achieved its overall target, but slightly missed its
targets for both its energy and water consumption-to-
occupancy ratio at the accommodation camp.
Our overall energy usage in Peru increased by 2%, and
our energy intensity increased by 7% compared to the
previous year.
Efforts to improve eco-efficiencies across four areas –
energy use and GHG emissions, water, mineral waste
and land disturbed – included use of mineral waste for
construction of the tailings dam, and energy- and
water-saving campaigns carried out at Constancia’s
accommodation camp. Constancia is on track to
maintain its level A rating across all indicators in TSM's
Energy and GHG Emissions Management protocol.
Total fresh water consumption decreased by 13% and
fresh water consumption intensity decreased by 9%
compared to the prior year. The operation’s surface and
groundwater consumption were 24% and 73%,
respectively, of the total maximum volume authorized
by the licences that govern the site’s water use. We
implemented actions to reduce sulphates and reduce
algae for potable water, and addressed elevated levels
of phosphorus and nitrogen in wastewater from the
camp’s laundry facility.
Although there were no high-level environmental
incidents at Constancia, there was one medium-level
incident in January related to a hydrocarbon spill. No
water bodies were affected by the uncontained release.
There were no exceedances of air quality parameters
related to the site’s activities. The site continued to
apply a dust suppressant to the roads at the
accommodation camp and process plant and carried
out testing of other options to control dust emissions,
including an organic plant-based dust suppressant.
In preparation for constructing a wastewater treatment
plant that will allow us to safely discharge tailings water
as part of a water balance regulatory requirement, we
worked on optimizing the size and design of the plant to
meet the discharging needs and requirements during
the rainy season. We have initiated the permitting
elaboration process, and we estimate beginning
construction in the dry season of 2021.
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OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
OUR APPROACH
MANITOBA
PERU
ARIZONA
SUSTAINABILITY
PERFORMANCE
Hudbay 2019 Annual and Sustainability Report
| Environment
70
The “Hudbay Reduce” campaign, which encourages
employees and contractors to properly segregate
solid waste, resulted in a 68% reduction in plastic
generation and 63% segregation at source in solid
waste collection points.
Engaging Employees on
Environmental Conservation
We encourage everyone working on our behalf to
demonstrate environmentally responsible practices
and embrace the use of environmentally conscientious
materials, practices and services.
During the year, we held 12 “cleaning campaigns”, which
involve training personnel across the business unit on
clearing trash from rivers and other water sources.
During the “Week of the Environment” celebration at
Constancia in June, employees participated in various
activities including a cleaning campaign on the Chilloroya
River, and the Civil Works area was awarded with the
best environmental performance.
CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
OUR APPROACH
MANITOBA
PERU
ARIZONA
SUSTAINABILITY
PERFORMANCE
Conserving and Protecting Biodiversity
Constancia’s annual biodiversity management plan
includes several objectives that aim to achieve the
broader goal of no net loss of biodiversity as a result
of mining activities. We achieved all plan objectives
in 2019, the most notable actions being:
• Conducting progressive reclamation, which we
highlight in the Preserving Biodiversity through
Progressive Reclamation case study
• Delivering on the Cochapampa Bog Sustainable
Use and Management program by supporting
rainwater harvesting systems and strengthening
capacity through installing 15 demonstration
irrigation sprinkler modules, expanding 11 sprinkler
irrigation systems, funding internships for members
of the Santa Fé and Chuschi communities with the
city of Ayacucho’s department of bog management,
and conducting water harvesting training programs
for bog users in Phuiza, a community in the district
of Llusco
• Engaging with the Regional Government of Cusco
through our participation in the Apurimac River Basin
Council – which serves as a network for protecting
and enhancing the resources in the basin that
supplies water to the Cusco region – and conducting
water harvesting studies in the headwaters of the
Chilloroya basin
Hudbay 2019 Annual and Sustainability Report
| Environment
71
After construction was suspended, we put our
reclamation plan into action, contouring and reseeding
the disturbed area with a custom mix of seeds that are
native and common to the area. Following seeding, a
thin layer of hydro mulch and tackifier was sprayed on
top to prevent evaporation and protect against seed
predators and environmental extremes while also
providing erosion control.
Through an agreement with the Mescalero Apache
Tribe, members came out to the Rosemont site and
harvested culturally significant plants.
Shifting Focus to Mason Project
Because of the delay at Rosemont, team members in
our Arizona Business Unit began shifting some of their
focus to Mason – an advanced exploration project
located approximately 85 kilometres southeast of
Reno, Nevada, in the prolific Yerington Copper District.
The project has significant exploration potential, and
much of the knowledge gained and lessons learned
from the permitting process at Rosemont, as well as
the best practices put in place at Constancia, is being
transferred to progress Mason toward development.
CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
OUR APPROACH
MANITOBA
PERU
ARIZONA
SUSTAINABILITY
PERFORMANCE
Arizona
Demonstrating Commitment to
Environmental Stewardship
The 4,000-plus-page Mine Plan of Operations for our
Rosemont project in Arizona detailed the environmental
management practices and advanced mining techniques
that would be employed during development,
operations and closure to meet the project
commitments under state and federal permits. These
included replacing 105% of the water used, using
dry-stack tailings instead of a conventional tailings
impoundment to reduce water consumption and risk,
and a robust mitigation and conservation plan to
preserve and protect local plant and animal species.
Although a US District Court ruling resulted in the
suspension of early works at Rosemont, Hudbay has
appealed the decision to the US Ninth Circuit Court of
Appeals, and we are optimistic that, ultimately, the
validity of the permitting process and conformance to
environmental requirements will be confirmed. During
the appeals process, which will take approximately two
years, we will monitor emerging technologies and
innovations and continue to optimize the project in
support of our goal to build a world-class mine.
In 2019, we demonstrated our commitment to being
responsible land stewards through early works along
the utility corridor. Before the court ruling, we had
commenced clearing and prepping the corridor for a
water pipeline and other utility infrastructure. We
worked with the Tucson Cactus and Succulent Society,
who provided their expertise in identifying and
relocating Saguaro cactus and other significant flora
along the corridor. We also used tribal monitors to
identify and protect archaeological artifacts.
Hudbay 2019 Annual and Sustainability Report
| Environment
72
CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
Sustainability Performance
Basis of Reporting
All financial information is presented in US dollars except where otherwise indicated. All operating
data is reported using the metric system. Some metrics are reported on both an absolute basis and an
intensity basis against kilotonnes of metal processed. Safety data frequency rates are measured per
200,000 hours worked.
Data Measurement Techniques
Data is measured or estimated, and operations are asked to explain significant deviations in year-
over-year trends. The performance data is reported at a mix of operational and corporate levels.
Data is checked and approved at the site level and reviewed for consistency by the corporate data
collection team.
We provide safety and environmental incident definitions so that all operations report incidents
consistently. We calculate greenhouse gas (GHG) emissions using published factors for emissions.
Most of the performance data for water and energy is metred. We purchase all of our electricity
from local grids. Utility grid statistics are therefore used to compile GHG numbers related to
purchased electricity.
Data for the indicators is collected and compiled using the information submitted on a standard
template by each site. We provide instruction and criteria for GRI G4 and Towards Sustainable
Mining (TSM), and we supply a GHG emissions worksheet developed by the Mining Association of
Canada (MAC).
Hudbay 2019 Annual and Sustainability Report
| Sustainability Performance
73
CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
Key Performance Data
Economic
(in $000s, unless otherwise stated)
Direct economic value generated and distributed
Profit (loss) before tax
Revenues
Operating costs
Canada
US
Peru
Chile
Total
Employee wages and benefits
Canada
US
Peru
Chile
Total
Payments to government
Taxes paid
Canada
US
Peru
Chile
Total
2019
2018
2017
2016
$
$
(452.8)
1,237.4
$
$
170.8
1,472.3
$
$
198.7
1,362.6
$
$
5.6
1,128.7
448.3
29.7
375.9
5.5
458.5
1.8
374.7
5.8
439.0
0.5
297.7
3.9
358.9
0.6
298.5
2.2
$
859.4
$
840.8
$
741.1
$
660.2
150.8
5.9
45.4
0.0
161.3
6.2
47.3
0.0
174.0
5.7
41.8
0.0
147.2
7.8
27.5
2.2
$
202.1
$
214.8
$
221.5
$
177.5
5.8
0.0
32.9
0.0
9.6
0.2
47.6
0.0
9.1
0.2
23.5
0.0
6.6
0.0
38.9
0.0
$
38.7
$
57.4
$
32.8
$
45.5
GRI
201-1
Hudbay 2019 Annual and Sustainability Report
| Sustainability Performance
74
CEO MESSAGE
Municipal taxes and grants
2019
2018
2017
2016
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
Canada
US
Peru
Chile
Total
Penalties and interest paid
Canada
US
Peru
Chile
Total
Payments to providers of capital
Dividends paid
Interest payments made to providers of loans
Financing fees paid
Canada
Peru
Total
Other interest paid1
Capital expenditures –
cash flow basis
Payments – local communities for land use
Canada
US
Peru
6.6
0.0
9.7
0.0
$
16.3
$
0.0
0.0
2.1
0.0
2.1
3.9
74.8
1.7
24.4
26.1
$
$
$
$
$
$
$
5.7
0.0
2.9
0.0
8.6
0.0
0.0
0.0
0.0
0.0
4.0
74.8
3.6
17.0
6.9
0.1
3.5
0.0
$
10.5
$
0.0
0.0
0.4
0.0
0.4
3.7
52.7
6.6
20.0
$
$
$
$
$
$
6.8
0.0
0.0
0.0
6.8
0.0
0.0
0.3
0.0
0.3
3.6
126.5
49.4
20.1
$
20.6
$
26.6
$
69.5
$
259.2
$
190.9
$
249.8
$
192.8
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
3,355.0
1,062.0
2,149.0
1,829.3
Total land use payments
$
3,355.0
$
1,062.0
$
2,149.0
$
1,829.3
1 Hudbay has stopped reporting on other interest paid, due to its being $0 for the last four years.
Hudbay 2019 Annual and Sustainability Report
| Sustainability Performance
75
CEO MESSAGE
Public benefit
Community investment and charitable donations
OUR FEATURE CASE STUDIES
Canada
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
US
Peru
Chile
Total community investments and donations
Resettlement investment (Peru)
Production (contained metal in concentrate)
Copper (000 tonnes)
Zinc (000 tonnes)
Gold (000 ounces)
Silver (000 ounces)
Metal production
Zinc (000 tonnes)
2019
2018
2017
2016
$
$
373.8
162.0
7,572.0
0.0
8,107.81
0.0
137.2
119.1
114.7
395.6
204.5
287.5
178.7
345.1
147.1
4,499.7
5,941.2
3,738.3
0.0
0.0
0.0
$
$
5,099.8
130.0
$
$
6,407.4
98.0
$
$
4,230.5
1,081.5
154.6
115.6
119.9
159.2
135.2
108.6
174.5
110.6
114.3
3,585.3
3,954.5
3,487.3
3,755.9
103.3
102.1
107.9
102.6
1 Political donations are included in this total; however, in accordance with Hudbay policy, political donations were $0.
SASB EM-MM-000.A
Hudbay 2019 Annual and Sustainability Report
| Sustainability Performance
76
CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
Employees
Total workforce
Full-time employees
Manitoba
Corporate
Arizona
Peru
Total full-time employees
Employment
Part-time employees
Manitoba
Corporate
Arizona
Peru
Total part-time employees
Contract (term) employees
Manitoba
Corporate
Arizona
Peru
Total contract employees
Co-op and summer students hired
Manitoba
Corporate
Arizona
Peru
Total co-op/summer students
2019
2018
2017
2016
1,411
69
25
728
2,233
14
1
2
0
17
64
2
1
130
197
13
5
0
23
41
1,382
1,332
1,319
74
33
690
2,179
13
0
2
0
15
34
4
1
165
211
27
3
3
12
45
70
35
304
1,741
20
0
4
0
24
19
2
1
444
516
26
3
1
12
42
67
40
230
1,656
10
0
2
0
12
13
1
0
363
385
21
2
0
8
31
GRI
102-8
SASB EM-MM-000.B
Hudbay 2019 Annual and Sustainability Report
| Sustainability Performance
77
CEO MESSAGE
OUR FEATURE CASE STUDIES
Employees represented by collective bargaining agreements
Percentage of employees represented by trade unions
(includes all full-time and part-time employees)
Operational changes
OUR COMPANY
Minimum number of weeks provided before operational changes (MBU only)
Negotiated into collective agreements (MBU only)
Number of strikes or lockouts exceeding one week
Manitoba
Corporate
Arizona
Peru
Total
Employee turnover (includes all full-time employees)
Manitoba
Corporate
Arizona
Peru
Total
Age distribution
<30
30–50
>50
Gender
Male
Female
Voluntary turnover rate (Hudbay total)
Involuntary turnover rate (Hudbay total)
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
GRI
102-41
401-1
402-1
MM4
SASB EM-MM-210B.2
EM-MM-310A.1
EM-MM-310A.2
2019
1,238
2018
1,370
2017
1,313
2016
1,121
55.0%
58.1%
59.4%
67.7%
2
Yes
0
N/ap
N/ap
0
0
168
18
18
84
288
18%
47%
35%
79%
21%
9%
4%
2
Yes
0
N/ap
N/ap
0
0
189
7
10
108
314
25%
44%
31%
76%
24%
10%
4%
2
Yes
0
N/ap
N/ap
0
0
192
8
8
128
336
20%
45%
35%
79%
21%
13%
6%
2
Yes
0
N/ap
N/ap
0
0
201
11
16
64
292
20%
39%
41%
80%
20%
13%
5%
Hudbay 2019 Annual and Sustainability Report
| Sustainability Performance
78
CEO MESSAGE
New employee hires
2019
2018
2017
2016
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
Manitoba
Corporate
Arizona
Peru
Total
Age distribution
<30
30–50
>50
Gender
Male
Female
Net number of full-time employees added (decreased)
Canada
US
Peru
Total
Senior management from
local community
Number of contractor full-time equivalent staff
Manitoba
Peru
Arizona
Person-hours of work (including contractors)
North America
South America
Total person-hours
233
13
8
98
352
39%
45%
16%
78%
22%
24
(8)
38
54
4
407
2,283
15
3,750,575
7,146,600
222
15
3
227
467
35%
59%
12%
81%
19%
54
(2)
386
438
6
429
1,737
13
220
13
6
238
477
39%
52%
9%
81%
19%
16
(5)
74
85
5
284
2,780
9
141
3
3
280
427
33%
55%
13%
83%
17%
(81)
(10)
47
(44)
9
175
2,974
15
3,701,855
3,232,379
3,073,646
5,992,125
7,867,939
7,589,501
10,897,175
9,693,980
11,100,318
10,663,147
GRI
401-1
Hudbay 2019 Annual and Sustainability Report
| Sustainability Performance
79
CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
Employees receiving regular performance and career development reviews
(includes all full-time employees)
Percentage reviewed
Hudbay total workforce age distribution (includes all full-time employees)
<30
30–50
>50
Composition of employees
SUSTAINABILITY APPROACH
Workforce diversity (includes all full-time employees)
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
Female (Hudbay)
Manitoba
Corporate
Arizona
Peru
Total
Percentage of workforce that are female
Percentage of workforce that are indigenous (MBU only)
Percentage of workforce that are disabled (MBU only)
Percentage of workforce that are visible minorities (MBU only)
Composition of executive management and corporate governance bodies
Board of Directors
(ratio male to female)
Age distribution
<30
30–50
>50
Executive management (ratio male to female)
1 Hudbay's female representation increased in 2020 to 30% when Alan Hibben stepped down.
2019
2018
2017
2016
53%
17%
64%
27%
223
33
7
88
351
16%
15%
4%
6%
46%
17%
62%
31%
213
32
15
83
343
16%
15%
4%
6%
40%
15%
53%
33%
195
33
17
76
321
18%
14%
5%
6%
2.7:11
2.5:1
2.3:1
0%
9%
91%
13.0:1
0%
0%
100%
7:1
0%
0%
100%
5:1
20%
14%
53%
32%
189
32
17
60
298
18%
13%
5%
6%
4:1
0%
0%
100%
6.5:1
Hudbay 2019 Annual and Sustainability Report
| Sustainability Performance
80
CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
Age distribution
<30
30–50
>50
Ratio of annual compensation of highest paid individual to mean total compensation
(includes all full-time employees and Peru contract employees)
Canada (MBU, excluding Corporate office)
Canada (including Corporate office)
SUSTAINABILITY APPROACH
Peru
US (ABU)
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
GRI
102-38
403-1
403-2
Workforce represented in formal joint management–worker Health and
Safety Committees
Percentage represented
Health and safety performance (per 200,000 hours worked, except where noted)
Lost time accident frequency (LTA)
Manitoba
Manitoba contractors
Peru
Peru contractors
Arizona
Arizona contractors
Chile
Chile contractors
Other North America (not including MBU and ABU)
Other North America contractors (not including MBU and ABU)
Other South America (not including Peru and Chile)
Other South America contractors (not including Peru and Chile)
Total
2019
2018
2017
2016
0%
43%
57%
4.1:1
26.4:1
17.8:1
4.4:1
0%
30%
70%
5.8:1
28.3:1
19.1:1
5.5:1
0%
29%
71%
6.8:1
23.4:1
19.5:1
4.8:1
0%
53%
46%
4.9:1
24.1:1
9.2:1
4.3:1
99%1
100%
100%
100%
0.7
0.0
0.1
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.2
0.9
0.0
0.1
0.1
0.0
0.0
0.0
2.6
0.0
0.0
0.0
0.0
0.3
1.0
0.7
0.1
0.0
0.0
0.0
N/av
N/av
0.0
0.0
0.0
0.0
0.3
1.1
0.0
0.1
0.0
0.0
0.0
N/av
N/av
0.0
0.0
0.0
0.0
0.3
SASB EM-MM-320A.1
Hudbay 2019 Annual and Sustainability Report
| Sustainability Performance
81
1 Hudbay's Arizona employees are currently not covered because the size of their office does not require it.
CEO MESSAGE
Lost time accident severity (SEV)
Manitoba
OUR FEATURE CASE STUDIES
Manitoba contractors
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
Peru
Peru contractors
Arizona
Arizona contractors
Chile
Chile contractors
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
North America (not including MBU and ABU)
North America contractors (not including MBU and ABU)
South America (not including Peru)
South America contractors (not including Peru)
Total
Restricted work case frequency (RWC)
Manitoba
Manitoba contractors
Peru
Peru contractors
Arizona
Arizona contractors
Chile
Chile contractors
North America (not including MBU and ABU)
North America contractors (not including MBU and ABU)
South America (not including Peru)
South America contractors (not including Peru)
GRI
403-2
Total
2019
2018
2017
2016
5.5
0.0
9.4
1.6
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
4.1
0.5
1.2
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.2
41.3
0.0
2.5
3.3
0.0
0.0
0.0
178.7
0.0
0.0
0.0
0.0
13.1
0.4
0.5
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.2
34.4
13.9
0.5
0.0
0.0
0.0
N/av
N/av
0.0
0.0
0.0
0.0
8.4
0.7
0.7
0.0
0.0
0.0
0.0
N/av
N/av
0.0
0.0
0.0
0.0
0.2
37.3
0.0
2.0
0.6
0.0
0.0
N/av
N/av
0.0
0.0
0.0
0.0
9.3
1.1
0.5
0.0
0.0
0.0
0.0
N/av
N/av
0.0
0.0
0.0
0.0
0.3
SASB EM-MM-320A.1
Hudbay 2019 Annual and Sustainability Report
| Sustainability Performance
82
CEO MESSAGE
Medical aid (MA) frequency
Manitoba
OUR FEATURE CASE STUDIES
Manitoba contractors
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
Peru
Peru contractors
Arizona
Arizona contractors
Chile
Chile contractors
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
North America (not including MBU and ABU)
North America contractors (not including MBU and ABU)
South America (not including Peru)
South America contractors (not including Peru)
Total
First aid (FA) frequency
Manitoba
Manitoba contractors
Peru
Peru contractors
Arizona
Arizona contractors
Chile
Chile contractors
North America (not including MBU and ABU)
North America contractors (not including MBU and ABU)
South America (not including Peru)
South America contractors (not including Peru)
GRI
403-2
Total
2019
2018
2017
2016
1.9
3.1
0.2
0.3
0.0
0.0
0.0
4.4
1.3
0.0
0.0
0.0
0.9
20.8
16.6
0.4
0.9
3.4
12.5
0.0
0.0
0.0
0.0
0.0
0.0
6.9
2.4
1.7
0.1
0.2
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.9
28.9
8.7
1.0
1.3
0.0
0.0
0.0
0.0
1.4
0.0
0.0
0.0
8.6
10.9
11.8
5.4
0.3
0.1
3.4
0.0
N/av
N/av
0.0
0.0
0.0
0.0
2.8
16.8
2.4
0.9
0.7
0.0
10.5
N/av
N/av
0.0
0.0
0.0
0.0
4.3
5.5
0.0
0.2
0.0
0.0
N/av
N/av
0.0
0.0
0.0
0.0
3.0
22.6
4.4
0.9
0.4
0.0
0.0
N/av
N/av
0.0
0.0
0.0
0.0
5.7
SASB EM-MM-320A.1
Hudbay 2019 Annual and Sustainability Report
| Sustainability Performance
83
CEO MESSAGE
Fatality (number)
Absentee rate (as a percentage of hours scheduled to be worked)
OUR FEATURE CASE STUDIES
Reportable occurrences (defined as EHS incidents required by Hudbay policy
to be reported to our Board of Directors)
Benefits 2019
2019
0
N/av
81
2018
0
N/av
79
2017
0
N/av
56
2016
0
N/av
79
Corporate
MBU
Peru
ABU
Full time
Full time
Part time
Full time
Part time
Full time
Part time
Life insurance
Health care
Disability and invalidity coverage
Parental leave
Retirement provision
Stock ownership
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Other – critical illness insurance
Yes Management only
Other – accidental death and
dismemberment insurance
Yes
Yes
Yes
Yes
No
No
No
No
No
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
N/ap
N/ap
N/ap
N/ap
N/ap
N/ap
N/ap
N/ap
Yes
Yes
Yes
Yes
Yes (401k)
Yes
No
Yes
No
No
No
No
No
No
No
No
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
GRI
102-34
401-2
401-3
403-2
SASB EM-MM-320A.1
Hudbay 2019 Annual and Sustainability Report
| Sustainability Performance
84
Society
CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
Total number of incidents of discrimination (and actions taken)
Land use disputes
Resettlements
Number of households (Peru only)
Number of individuals (Peru only)
Employees trained in anti-corruption policies
SUSTAINABILITY APPROACH
Number – employees
Percentage of workforce
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
Percentage of Board and management given training
Employees that anti-corruption policies have been communicated to
Number – management
Percentage
Number – non-management
Percentage
Number and percentage of operations assessed for corruption risks
Number – operations
Percentage
Governance body members that anti-corruption policies have been communicated to
Number
Percentage
Governance body members that received training on anti-corruption
Number
Percentage
2019
2018
2017
2016
0
11
0
0
1,245
56%
100%
562
92%
1,810
99%
4
100%
9
100%
9
100%
1
1
0
0
1,064
49%
100%
564
100%
1,840
100%
4
100%
10
100%
10
100%
0
2
0
0
952
55%
100%
580
100%
1,649
100%
4
100%
10
100%
10
100%
1
3
0
0
66
4%
100%
534
100%
418
27%
N/av
N/av
10
100%
10
100%
1 At our Constancia operation in August 2019, a 24-hour strike was generated, prompted by the Community Resettlement Association, which demanded compliance with
commitments. The protest was resolved when the Company promised to fulfill each of the commitments according to schedule.
GRI
102-34
205-1
205-2
MM9
Hudbay 2019 Annual and Sustainability Report
| Sustainability Performance
85
CEO MESSAGE
Average hours of training (Peru and Arizona business units only)
OUR FEATURE CASE STUDIES
Females in management
Males in management
Males in non-management
Females in non-management
Average spend (DJSI)
Security practices (security personnel training)
Hudbay security personnel trained in human rights policies and procedures
Number
Percentage
Contractor security personnel trained in human rights policies and procedures
Number
Percentage
Value of fines or sanctions for non-compliance with laws and regulations
Grievances about impacts on society
Number filed through formal grievance mechanisms
Number addressed during reporting period
Number resolved during reporting period
Number filed prior to the reporting period that were resolved during the reporting period
Number of other concerns
Environment
Labour and commercial practices
Resettlement/livelihood
Human rights
Other
2019
2018
2017
2016
32.35
20.00
42.92
20.14
$466
16
100%
116
100%
$0
78
9
69
6
5
152
4
1
25
65.69
75.73
118.09
113.48
$208
15
100%
135
98%
$0
15
15
1
8
0
60.70
65.98
100.09
85.82
$362
15
100%
124
98%
$0
20
20
12
8
4
104
113
0
0
4
2
1
1
6.86
9.36
9.59
14.11
N/av
14
100%
7
100%
$0
32
32
12
3
1
24
1
1
4
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
GRI
102-34
410-1
412-2
413-2
MM6
MM7
Hudbay 2019 Annual and Sustainability Report
| Sustainability Performance
86
CEO MESSAGE
Closure plans
Identify total number of operations
OUR FEATURE CASE STUDIES
Number of company operations that have closure plans
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
Percentage of total operations with closure plans
Number of advanced exploration projects that have closure plans
Percentage of advanced exploration projects that have closure plans
2019
2018
2017
2016
4
4
100%
3
100%
4
4
1
2
1
5
5
1
1
1
5
8
1.6
1
1
Overall financial provision representing the present value of future cash flows relating to
estimated closure costs per Canadian Generally Accepted Accounting Principles (in $000s)
$302,116
$202,024
$200,000
$177,296
SUSTAINABILITY APPROACH
Operation has implemented local community engagement, impact assessments, and
development programs in line with the Stakeholder Engagement Standard
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
Manitoba
Arizona
Peru
Chile
Operation is taking place in or adjacent to indigenous peoples’ territories
Manitoba
Arizona
Peru
Chile
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Partially
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
GRI MM5
MM10
SASB EM-MM-210A.2
Hudbay 2019 Annual and Sustainability Report
| Sustainability Performance
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CEO MESSAGE
Artisanal mining
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
Toronto
Manitoba
Arizona
Peru
Chile
2019
2018
2017
2016
N/ap
N/ap
N/ap
No artisanal
mining
No artisanal
mining
Yes1
Yes2
No artisanal
mining
No artisanal
mining
Yes
Yes
No artisanal
mining
No artisanal
mining
Yes
Yes
N/ap
N/ap
N/ap
Yes
No
SUSTAINABILITY APPROACH
1 Artisanal mining is active in the Pampacancha area. To mitigate the continuation of such practices, Hudbay is working to come to agreements with land owners in the
community who carry out informal mining or rent their land for the development of informal mining.
2 Artisanal mining continues to be active adjacent to the Trilco camp.
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
GRI MM8
Hudbay 2019 Annual and Sustainability Report
| Sustainability Performance
88
CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
Environment
Direct energy consumption by primary energy source (terajoules)
Propane
Diesel
Light oil
Gasoline
Other
Total
SUSTAINABILITY APPROACH
Indirect energy consumption by primary energy source (terajoules)
Total electricity consumed
Indirect energy sold/credits (terajoules)
Electricity
Total indirect energy consumed by organization (terajoules)
Energy intensity (terajoules per kilotonne of metal in concentrate)
Total direct and indirect greenhouse gas emissions (kilotonnes of CO2-equivalent)
Direct carbon dioxide emissions
Indirect carbon dioxide emissions
Total
GHG intensity (tonnes of GHG emissions per kilotonne of metal in concentrate)
NOX, SOX and other significant air emissions (in kilotonnes of particulate)
MBU
Peru
Arizona
Total
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
GRI
303-1
SASB EM-MM-110A.1
EM-MM-120A.1
EM-MM-130A.1
EM-MM-140A.1
2019
2018
2017
2016
615
1,794
0
15
0
793
1,778
0
15
0
629
2,019
0
16
0
579
1,941
0
14
0
2,424
2,586
2,664
2,533
5,905
5,820
5,652
5,263
0.841
5,904
23.08
160.83
401.95
562.78
2.19
0.65
N/av
0.00
0.652
0.42
5,819
22.58
170.19
403.10
573.29
2.12
0.54
N/av
0.00
0.54
0.47
5,652
20.83
177.17
363.48
540.65
1.84
0.62
N/av
0.00
0.62
0.49
5,262
20.11
170.96
322.31
493.27
1.73
N/av
N/av
N/av
0.44
1 Energy produced at our test solar panel plots, as described in our 2015 report.
2 In Manitoba, we collect and report on fugitive dust. Collection and reporting at the same level of detail is not required in Peru. Ambient monitoring is conducted, but total
particulate release data is not collected
Hudbay 2019 Annual and Sustainability Report
| Sustainability Performance
89
CEO MESSAGE
Total water withdrawal (000 cubic metres)
OUR FEATURE CASE STUDIES
Surface water
Groundwater
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
Rainwater collected directly and stored by the organization
Waste water from another organization
Municipal water supplies
Total water withdrawal
SUSTAINABILITY APPROACH
Percentage and total volume of water recycled and reused
2019
2018
2017
2016
12,692.62
13,770.01
11,058.15
10,632.45
4,144.37
5,093.14
0.00
0.14
4,154.87
2,746.90
3,582.05
6,192.64
10,242.19
7,143.19
0.00
0.01
0.00
0.00
0.00
0.00
21,930.27
24,117.52
24,047.24
21,306.23
OUR PEOPLE
Percentage
342.40%
272.41%
222.37%
264.20%
Total volume (000 cubic metres)
75,088.41
65,698.20
53,474.40
56,291.74
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
GRI
102-34
303-1
303-3
306-1
306-2
306-3
306-4
306-5
MM3
SASB EM-MM-140A.1
EM-MM-140A.2
EM-MM-150A.1
EM-MM-150A.2
Total water discharged (000 cubic metres)
To Flin Flon Creek/Ross Lake/Schist Lake
To Anderson Creek/Wekusko Lake
To Woosey Creek/Morgan Lake
To Namew Lake
To Herblet Lake
To ground
To Chilloroya River (Peru)
Water treated (000 cubic metres)
Total number of significant spills
Volume (liquid) (m3)
Volume (solid) (tonnes)
Hazardous waste disposed of at external facility (tonnes)
Total waste (tonnes)
Overburden
Waste rock
Tailings
12,500.88
15,897.13
13,941.01
14,352.85
4,383.57
1,669.85
30.00
595.19
0.00
861.54
4,383.57
1,669.85
30.00
5.28
181.34
1,358.34
9,066.54
1,787.68
30.00
784.06
297.22
294.02
8,024.91
2,141.69
30.00
926.49
247.31
187.84
20,041.03
23,525.51
26,200.52
25,911.09
0
0.00
0.00
926
0
0.00
0.00
1,166
3
286.02
120.00
1,944
9
516.48
N/av
1,520
256,454.40
258,288.00
1,302,405.23
2,053,659.86
37,005,883.18
37,055,344.00
32,432,668.54
51,426,208.82
33,211,879.00
32,457,474.00
30,545,163.00
28,968,944.00
Hudbay 2019 Annual and Sustainability Report
| Sustainability Performance
90
CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
Number of fines or sanctions for non-compliance with environmental laws
and regulations
Land use (hectares) – mineral tenure (controlled)
2019
2018
2017
2016
6
0
0
0
Manitoba and Saskatchewan
518,030.37
241,809.86
121,241.37
122,639.37
Yukon
Nunavut
Total Canada
Arizona
Total USA
Chile
Peru
Total South/Central America
Total
Land use (hectares) – surface tenure (disturbed)
0.00
21.00
0.00
21.00
583.37
21.00
5,823.37
21.00
518,051.37
241,830.86
121,845.74
261,822.87
7,284.00
0.00
7,284.00
7,284.00
7,284.00
7,284.00
7,284.00
7,284.00
1,531.00
263,900.00
263,900.00
68,826.00
139,495.77
99,735.66
99,735.66
5,186.96
141,026.77
363,635.66
363,635.66
74,012.96
659,078.14
612,750.52
492,765.40
343,119.83
Manitoba and Saskatchewan
7,711.41
7,647.36
7,314.10
7,314.10
Yukon
Nunavut
Total Canada
Arizona
Total USA
Chile
Peru
Total South/Central America
Total
0.00
0.00
0.00
0.00
120.00
0.00
120.68
0.00
7,711.41
7,647.36
7,434.10
7,966.15
0.00
0.00
1,531.00
1,590.98
3,121.98
10,833.39
0.00
0.00
0.00
1,524.19
1,524.19
9,171.55
0.00
0.00
0.00
1,517.97
1,517.97
8,952.07
0.00
0.00
0.30
1,568.38
1,568.68
9,534.83
GRI MM1
Hudbay 2019 Annual and Sustainability Report
| Sustainability Performance
91
CEO MESSAGE
Sites requiring biodiversity management plans
Number of sites legally requiring plans
OUR FEATURE CASE STUDIES
Percentage of sites with legally required plans in place
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
Number of sites with voluntary plans in place
Habitats protected or restored (hectares)
Protected
Restored
Partnerships exist
2019
2018
2017
2016
2
100%
1
0
25.371
Yes
2
100%
1
0
0.61
Yes
2
100%
1
0
0
Yes
1
100%
1
0
51.93
Yes
Status at close of reporting period
Monitoring
Monitoring
Monitoring
Monitoring
IUCN Red List species and National Conservation List species
Critically endangered
Endangered
Vulnerable
Near threatened
Least concern
3
6
29
24
388
3
5
25
22
89
2
2
19
12
4
3
8
12
11
6
1 In 2019, our Peru Business Unit did a significant amount of reclamation around the Constancia mine, accounting for the majority of reclamation stated here.
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
GRI
304-1
304-3
304-4
MM2
SASB EM-MM-160A.3
Hudbay 2019 Annual and Sustainability Report
| Sustainability Performance
92
2019 Targets and Achievements
CEO MESSAGE
OUR FEATURE CASE STUDIES
TARGET
Health and safety
ACHIEVEMENT
DETAILS
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
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
Community
Partially achieved
During the year, we revised our approach and encouraged each business unit to focus on
fatality prevention priorities based on local context.
Define a framework for tracking well-being of
communities near Hudbay mines
Perform gap assessments and create improvement
plans at each main location in order to finalize social
risk framework
Achieved
Not achieved
Environment
Framework has been defined. Next step will be implementation in site tracking and
corporate reporting.
Some aspects of the social risk framework have been incorporated in our corporate risk
tracking, but a formal gap analysis was not carried out.
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.
Hudbay 2019 Annual and Sustainability Report
| Sustainability Performance
93
CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
TARGET
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.
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.
Financial excellence/growth
ACHIEVEMENT
DETAILS
Partially achieved
This continues to be a priority; however, due to technical difficulties, Hudbay is
experiencing delays in the full rollout.
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.
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
Advance Rosemont through the final stage of permitting
and initiate early works activities
Not achieved
In Q1 2020, reached a community agreement to acquire Pampacancha surface rights,
enabling us to proceed with negotiations with individual land users.
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
Hudbay 2019 Annual and Sustainability Report
| Sustainability Performance
94
CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
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
Environment
• Complete the construction of the control berms and
Financial Excellence/Growth
• Subject to maintaining sufficient financial liquidity,
lost time accident severity of 7.0
initiate phase II Flin Flon Dam legacy upgrades
• 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
• 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
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
Hudbay 2019 Annual and Sustainability Report
| Sustainability Performance
95
CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
GRI Content Index
GRI Standard
Disclosure
Response, page number(s) and/or URL(s)
GRI 101: Foundation 2016
General Disclosures
Organizational Profile
102-1
102-2
102-3
102-4
102-5
102-6
102-7
102-8
102-9
102-10
102-11
102-12
102-13
Strategy
102-14
102-15
Name of the organization
Activities, brands, products and services
Our Company (see page 11)
Our Company (see page 11)
Location of headquarters
Location of operations
Ownership and legal form
Markets served
Scale of the organization
Business and Financial Review (see page 19)
Business and Financial Review > Strategy (see page 22)
Our Company (see page 11)
Our Company (see page 12)
Our Company (see page 11)
Sustainability Approach > Responsible Supply Chain > Products (see page 38)
Business and Financial Review (see page 19)
Business and Financial Review > Business Activities (see page 23)
Information on employees and other workers
Sustainability Performance > Key Performance Data (see page 72)
Supply chain
Sustainability Approach > Responsible Supply Chain > Supply Chain Performance (see page 38)
Significant changes to the organization and its supply chain
CEO Message (see page 3)
Business and Financial Review (see page 19)
Business and Financial Review > Business Activities (see page 23)
Precautionary principle or approach
Sustainability Approach > Sustainability Governance > Precautionary Approach (see page 28)
External initiatives
Sustainability Approach > Sustainability Governance > International Best Practice Standards (see page 28)
Sustainability Approach > Sustainability Governance > Industry Involvement (see page 29)
Sustainability Approach > UN Sustainable Development Goals (see page 39)
Membership of associations
Sustainability Approach > Sustainability Governance > Industry Involvement (see page 29)
Statement from senior decision-maker
Key impacts, risks and opportunities
CEO Message (see page 3)
CEO Message (see page 3)
Our Company > Risk Management (see page 17)
GRI
102-55
102-56
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CEO MESSAGE
Ethics and Integrity
102-16
Values, principles, standards, and norms of behaviour
Our Company > Vision, Mission, Values (see page 13)
GRI Standard
Disclosure
Response, page number(s) and/or URL(s)
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
102-17
Mechanisms for advice and concerns about ethics
Our Company > Business Conduct (see page 16)
Our Company > Business Conduct > Risks, Issues or Complaints (see page 16)
Our Company > Business Conduct (see page 16)
Sustainability Approach > Sustainability Governance > Sustainability Management Framework (see page 27)
Sustainability Approach > Human Rights and Security (see page 29)
Sustainability Approach > Responsible Supply Chain (see page 37)
Website > Disclosure Centre > Policies
SUSTAINABILITY APPROACH
Governance
102-18
Governance structure
Our Company > Corporate Governance (see page 14)
Our Company > Board of Directors (see page 15)
Our Company > Management Team (see page 18)
Sustainability Approach > Sustainability Governance (see page 27)
Management Information Circular
Website > About Us > Board/Management
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
102-19
102-20
Delegating authority
Sustainability Approach > Sustainability Governance (see page 27)
Executive-level responsibility for economic, environmental and
social topics
Our Company > Corporate Governance (see page 14)
Our Company > Board of Directors (see page 15)
Our Company > Management Team (see page 18)
Sustainability Approach > Sustainability Governance (see page 27)
102-21
Consulting stakeholders on economic, environmental and social topics
Sustainability Approach > Stakeholder Engagement (see page 32)
102-22
Composition of the highest governance body and its committees
Our Company > Corporate Governance (see page 14)
Social Impact > Exchanging Knowledge and Empowering Local Communities (see page 54)
Social Impact > Our Approach (see page 55)
Our Company > Board of Directors (see page 15)
Management Information Circular
Website > About Us > Governance
Website > Disclosure Centre > Committees
102-23
Chair of the highest governance body
Our Company > Corporate Governance (see page 14)
Our Company > Board of Directors (see page 15)
Our Company > Management Team (see page 18)
Management Information Circular
Website > About Us > Board
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CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
GRI Standard
Disclosure
GRI 102: General Disclosures 2016
Response, page number(s) and/or URL(s)
102-24
Nominating and selecting the highest governance body
Management Information Circular
Website > About Us > Governance
Website > Disclosure Centre > Committees
102-25
Conflicts of interest
Our Company > Business Conduct (see page 16)
102-26
102-27
102-28
102-29
102-30
102-31
102-32
102-33
102-34
102-35
102-36
102-37
102-38
102-39
Sustainability Approach > Sustainability Governance (see page 27)
Annual Information Form
Role of highest governance body in setting purpose, values and strategy
Sustainability Approach > Sustainability Governance (see page 27)
Website > About Us > Governance > Corporate Guidelines and Board Charter
Collective knowledge of highest governance body
Annual Information Form
Website > About Us > Board
Evaluating the highest governance body’s performance
Website > About Us > Governance > Corporate Guidelines and Board Charter
Identifying and managing economic, environmental and social impacts
Sustainability Approach > Sustainability Governance > Sustainability Management Framework (see page 27)
Effectiveness of risk management processes
Our Company > Risk Management (see page 17)
Review of economic, environmental and social topics
Sustainability Approach > Sustainability Governance (see page 27)
Highest governance body’s role in sustainability reporting
Sustainability Approach > Sustainability Governance (see page 27)
Communicating critical concerns
Our Company > Business Conduct > Risks, Issues or Complaints (see page 16)
Our Company > Risk Management (see page 17)
Nature and total number of critical concerns
Our Company > Business Conduct > Risks, Issues or Complaints (see page 16)
The EHSS Committee reviews and approves the content within the Annual and Sustainability Report.
Sustainability Approach > Human Rights and Security (see page 29)
Sustainability Approach > Stakeholder Engagement (see page 33)
Social Impact > Manitoba (see page 57)
Social Impact > Peru (see page 59)
Social Impact > Arizona (see page 61)
Sustainability Performance > Key Performance Data (see page 84)
Remuneration policies
Management Information Circular
Website > About Us > Governance > Corporate Governance Guidelines and Board Charter
Process for determining remuneration
Management Information Circular
Stakeholders’ involvement in remuneration
Management Information Circular
Annual total compensation ratio
Sustainability Performance > Key Performance Data (see page 81)
Percentage increase in annual total compensation ratio
Management Information Circular
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CEO MESSAGE
Stakeholder Engagement
GRI Standard
Disclosure
Response, page number(s) and/or URL(s)
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
102-40
102-41
102-42
102-43
102-44
List of stakeholder groups
Sustainability Approach > Stakeholder Engagement (see page 33)
Collective bargaining agreements
Sustainability Performance > Key Performance Data (see page 78)
Identifying and selecting stakeholders
Sustainability Approach > Stakeholder Engagement (see page 32)
Approach to stakeholder engagement
Sustainability Approach > Stakeholder Engagement (see page 32)
Key topics and concerns raised
Our Company > Business Conduct (see page 16)
Sustainability Approach > Human Rights and Security (see page 29)
Sustainability Approach > Stakeholder Engagement (see page 32)
Social Impact > Manitoba (see page 57)
Social Impact > Peru (see page 59)
Social Impact > Arizona (see page 61)
Reporting Practice
102-45
102-46
102-47
102-48
102-49
102-50
102-51
102-52
102-53
102-54
102-55
102-56
Entities included in the consolidated financial statements
About This Report (see page 111)
Annual Information Form
Defining report content and topic Boundaries
Sustainability Approach > Materiality (see page 35)
List of material topics
Restatements of information
Changes in reporting
Reporting period
Date of most recent report
Reporting cycle
Sustainability Approach > Materiality > Boundaries (see page 36)
Sustainability Approach > Materiality (see page 35)
There are no restatements of information from previous reports.
There are no significant changes from previous reporting in scope of priorities.
About This Report (see page 111)
About This Report (see page 111)
About This Report (see page 111)
Contact point for questions regarding the report
About This Report (see page 111)
Claims of reporting in accordance with the GRI Standards
About This Report (see page 111)
GRI content index
External assurance
GRI Content Index (see page 96)
Sustainability Approach > Sustainability Governance (see page 27)
External assurance was conducted only for the financial data in the 2019 Annual and Sustainability Report.
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GRI Standard
Disclosure
Response, page number(s) and/or URL(s)
CEO MESSAGE
Material Topics
GRI 200: Economic Standard Series
OUR FEATURE CASE STUDIES
Economic Performance
GRI 103: Management Approach 2016
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
103
Management approach
CEO Message (see page 3)
Our Company > Corporate Governance (see page 14)
Our Company > Risk Management (see page 17)
Business and Financial Review > Strategy (see page 22)
Sustainability Approach > Materiality (see page 36)
Social Impact > Our Approach (see page 55)
Annual Information Form
GRI 201: Economic Performance 2016
201-1
201-2
201-3
Direct economic value generated and distributed
Sustainability Performance > Key Performance Data (see page 74)
Financial implications and other risks and opportunities due to
climate change
CDP Website
Defined benefit plan obligations and other retirement plans
Management’s Discussion and Analysis
Indirect Economic Impacts
GRI 103: Management Approach 2016
103
Management approach
Sustainability Approach > Materiality (see page 36)
Sustainability Approach > Responsible Supply Chain (see page 37)
Social Impact > Our Approach (see page 55)
Social Impact > Manitoba (see page 57)
Social Impact > Peru (see page 59)
Social Impact > Arizona (see page 61)
Note: We re-evaluate our management approach every three years as part of our materiality review process;
an evaluation was last conducted in 2017.
GRI 203: Indirect Economic Impacts 2016
203-2
Significant indirect economic impacts
Sustainability Approach > Responsible Supply Chain > Supply Chain Performance (see page 38)
Social Impact > Exchanging Knowledge and Empowering Local Communities (see page 54)
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GRI Standard
Disclosure
Response, page number(s) and/or URL(s)
CEO MESSAGE
Procurement Practices
GRI 103: Management Approach 2016
OUR FEATURE CASE STUDIES
103
Management approach
Sustainability Approach > Sustainability Governance (see page 27)
Sustainability Approach > Materiality (see page 36)
Sustainability Approach > Responsible Supply Chain (see page 37)
Social Impact > Our Approach > Local Hiring and Procurement (see page 56)
Supplier Code of Conduct and Ethics
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
GRI 204: Procurement Practices 2016
204-1
Proportion of spending on local suppliers
Sustainability Approach > Responsible Supply Chain (see page 37)
Anti-corruption
GRI 103: Management Approach 2016
103
Management approach
Our Company > Business Conduct (see page 16)
Our Company > Business Conduct > Compliance Training (see page 16)
Our Company > Business Conduct > Risks, Issues or Complaints (see page 16)
Our Company > Risk Management (see page 17)
Sustainability Approach > Sustainability Governance (see page 27)
Sustainability Approach > Materiality (see page 36)
Statement on Anti-Corruption
Supplier Code of Conduct and Ethics
GRI 205: Anti-corruption 2016
205-1
205-2
205-3
Operations assessed for risks related to corruption
Our Company > Business Conduct > Risks, Issues or Complaints (see page 16)
Communication and training about anti-corruption policies
and procedures
Sustainability Performance > Key Performance Data (see page 85)
Sustainability Performance > Key Performance Data (see page 85)
Confirmed incidents of corruption and actions taken
Our Company > Business Conduct > Risks, Issues or Complaints (see page 16)
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CEO MESSAGE
GRI Standard
Disclosure
GRI 300: Environmental Standards Series
Water
OUR FEATURE CASE STUDIES
GRI 103: Management Approach 2016
Response, page number(s) and/or URL(s)
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
103
Management approach
Sustainability Approach > Sustainability Governance (see page 27)
Sustainability Approach > Materiality (see page 36)
Environment > Our Approach > Water (see page 67)
GRI 303: Water 2016
303-1
303-3
Biodiversity
Water withdrawal by source
Water recycled and reused
Sustainability Performance > Key Performance Data (see page 90)
Sustainability Performance > Key Performance Data (see page 90)
GRI 103: Management Approach 2016
103
Management approach
Sustainability Approach > Sustainability Governance (see page 27)
Sustainability Approach > Materiality (see page 36)
Environment > Our Approach > Land and Biodiversity (see page 65)
GRI 304: Biodiversity 2016
304-1
304-2
304-3
304-4
MM1: Biodiversity
Operational sites owned, leased, managed in, or adjacent to protected
areas and areas of high biodiversity value outside protected areas
Environment > Our Approach > Land and Biodiversity (see page 65)
Sustainability Performance > Key Performance Data (see page 92)
There are no sites in protected areas, and no critically endangered or endangered species.
Significant impacts of activities, products and services on biodiversity
Environment > Our Approach > Land and Biodiversity (see page 65)
Habitats protected or restored
Sustainability Performance > Key Performance Data (see page 92)
IUCN Red List species and national conservation list species with
habitats in areas affected by operations
Sustainability Performance > Key Performance Data (see page 92)
MM1
Amount of land disturbed or rehabilitated
Sustainability Performance > Key Performance Data (see page 91)
MM2: Biodiversity
MM2
The number and percentage of total sites identified as requiring
biodiversity management plans according to stated criteria, and the
number and percentage of those sites with a plan in place
Sustainability Performance > Key Performance Data (see page 92)
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GRI Standard
Disclosure
Response, page number(s) and/or URL(s)
CEO MESSAGE
Effluents and Waste
GRI 103: Management Approach 2016
OUR FEATURE CASE STUDIES
103
Management approach
Sustainability Approach > Sustainability Governance (see page 27)
Sustainability Approach > Materiality (see page 36)
Environment > Our Approach > Waste and Tailings (see page 67)
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
GRI 306: Effluents and Waste 2016
306-1
306-2
306-3
306-4
306-5
Water discharge by quality and destination
Sustainability Performance > Key Performance Data (see page 90)
Waste by type and disposal method
Sustainability Performance > Key Performance Data (see page 90)
Significant spills
Sustainability Performance > Key Performance Data (see page 90)
Transport of hazardous waste
Sustainability Performance > Key Performance Data (see page 90)
Water bodies affected by water discharges and/or runoff
Sustainability Performance > Key Performance Data (see page 90)
MM3: Effluents and Waste
MM3
Total amount of overburden, rock, tailings and sludges and their
associated risks
Sustainability Performance > Key Performance Data (see page 90)
GRI 400: Social Standards Series
Employment
GRI 103: Management Approach 2016
103
Management approach
Sustainability Approach > Sustainability Governance (see page 27)
Sustainability Approach > Materiality (see page 36)
Our People > Our Approach > Transforming the Way We Work (see page 46)
Our People > Our Approach > Diversity and Inclusion (see page 47)
GRI 401: Employment 2016
401-1
401-2
401-3
New employee hires and employee turnover
Sustainability Performance > Key Performance Data (see page 79)
Benefits provided to full-time employees that are not provided to
temporary or part-time employees
Sustainability Performance > Key Performance Data (see page 84)
Parental leave
Sustainability Performance > Key Performance Data (see page 84)
Parental leave is tracked by business unit and employment level.
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CEO MESSAGE
GRI Standard
Disclosure
Labour/Management Relations
GRI 103: Management Approach 2016
Response, page number(s) and/or URL(s)
OUR FEATURE CASE STUDIES
103
Management approach
Sustainability Approach > Sustainability Governance (see page 27)
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
GRI 402: Labour/Management Relations 2016
402-1
Minimum notice periods regarding operational changes
Sustainability Performance > Key Performance Data (see page 78)
Sustainability Approach > Materiality (see page 36)
Our People > Building a Culture of Continuous Feedback (see page 44)
Our People > Our Approach > Employee Relations (see page 46)
SUSTAINABILITY APPROACH
MM4: Labour/Management Relations
OUR PEOPLE
MM4
Number of strikes and lockouts exceeding one week’s duration,
by country
Sustainability Performance > Key Performance Data (see page 78)
SOCIAL IMPACT
GRI 103: Management Approach 2016
Occupational Health and Safety
103
Management approach
Sustainability Approach > Sustainability Governance (see page 27)
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
Sustainability Approach > Materiality (see page 36)
Our People (see page 42)
Our People > Our Approach > Health and Safety (see page 45)
EHS Policy
GRI 403: Occupational Health and Safety 2016
403-1
403-2
Workers’ representation in formal joint management–worker health
and safety committees
Types of injury and rates of injury, occupational diseases, lost days and
absenteeism, and number of work-related fatalities
Sustainability Performance > Key Performance Data (see page 81)
Sustainability Performance > Key Performance Data (see page 81)
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GRI Standard
Disclosure
Response, page number(s) and/or URL(s)
CEO MESSAGE
Security Practices
GRI 103: Management Approach 2016
OUR FEATURE CASE STUDIES
103
Management approach
Our Company > Risk Management (see page 17)
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
Sustainability Approach > Sustainability Governance (see page 27)
Sustainability Approach > Sustainability Governance > International Best Practice Standards (see page 28)
Sustainability Approach > Human Rights and Security > Security Practices (see page 30)
Sustainability Approach > Materiality (see page 36)
GRI 410: Security Practices 2016
410-1
Security personnel trained in human rights policies or procedures
Sustainability Performance > Key Performance Data (see page 86)
Rights of Indigenous Peoples
GRI 103: Management Approach 2016
103
Management approach
Sustainability Approach > Sustainability Governance (see page 27)
Sustainability Approach > Materiality (see page 36)
Our People > Manitoba > Hiring Local and Diverse Talent (see page 49)
Social Impact > Exchanging Knowledge and Empowering Local Communities (see page 54)
Social Impact > Our Approach > Indigenous Engagement (see page 55)
Social Impact > Manitoba > Creating Long-Term Relations with First Nations and Communities of Interest
(see page 57)
GRI 411: Rights of Indigenous Peoples 2016
411-1
Incidents of violations involving rights of indigenous peoples
Note: There were zero violations in 2019.
MM5: Indigenous Rights
MM5
Total number of operations taking place in or adjacent to indigenous
peoples’ territories, and number and percentage of operations or
sites where there are formal agreements with indigenous peoples’
communities
Sustainability Performance > Key Performance Data (see page 87)
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CEO MESSAGE
GRI Standard
Disclosure
Human Rights Assessment
GRI 103: Management Approach 2016
Response, page number(s) and/or URL(s)
OUR FEATURE CASE STUDIES
103
Management approach
Our Company > Business Conduct > Risks, Issues or Complaints (see page 16)
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
GRI 412: Human Rights Assessment 2016
Our Company > Risk Management (see page 17)
Sustainability Approach > Sustainability Governance (see page 27)
Sustainability Approach > Human Rights and Security (see page 29)
Sustainability Approach > Materiality (see page 36)
Sustainability Approach > Responsible Supply Chain (see page 37)
Human Rights Policy
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
412-2
412-3
Employee training on human rights policies or procedures
Sustainability Performance > Key Performance Data (see page 86)
Significant investment agreements and contracts that include human
rights clauses or that underwent human rights screening
Website > About Us > Governance > Supplier Code of Conduct and Ethics
Local Communities
GRI 103: Management Approach 2016
103
Management approach
Our Company > Business Conduct > Risks, Issues or Complaints (see page 16)
Our Company > Risk Management (see page 17)
Sustainability Approach > Sustainability Governance (see page 27)
Sustainability Approach > Materiality (see page 36)
Sustainability Approach > Responsible Supply Chain (see page 37)
Our People > Our Approach > Diversity and Inclusion (see page 47)
Our People > Manitoba > Hiring Local and Diverse Talent (see page 49)
Social Impact > Exchanging Knowledge and Empowering Local Communities (see page 54)
Social Impact > Our Approach (see page 55)
Social Impact > Our Approach > Community Development (see page 56)
GRI 413: Local Communities 2016
413-2
Operations with significant actual and potential negative impacts
on local communities
Sustainability Performance > Key Performance Data (see page 86)
MM6: Local Communities
MM6
Number and description of significant disputes relating to land use,
customary rights of local communities and indigenous peoples
Sustainability Performance > Key Performance Data (see page 86)
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GRI Standard
Disclosure
Response, page number(s) and/or URL(s)
CEO MESSAGE
OUR FEATURE CASE STUDIES
MM7: Local Communities
MM7
The extent to which grievance mechanisms were used to resolve
disputes relating to land use, customary rights of local communities
and indigenous peoples, and the outcomes
Sustainability Performance > Key Performance Data (see page 86)
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
Artisanal and Small-Scale Mining
MM8: Artisanal and Small-Scale Mining
MM8
Number and percentage of company operating sites where artisanal
and small-scale mining (ASM) takes place on, or adjacent to, the site;
the associated risks and the actions taken to manage and mitigate
these risks
Sustainability Performance > Key Performance Data (see page 88)
SUSTAINABILITY APPROACH
Resettlement
GRI 103: Management Approach
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
103
Management approach
Sustainability Approach > Sustainability Governance (see page 27)
Sustainability Approach > Materiality (see page 36)
Social Impact > Our Approach > Resettlement and Land Use (see page 56)
MM9: Resettlement
MM9
Closure Planning
Sites where resettlements took place, the number of households
resettled in each, and how their livelihoods were affected in the process
Sustainability Performance > Key Performance Data (see page 85)
GRI 103: Management Approach
103
Management approach
Sustainability Approach > Sustainability Governance (see page 27)
MM10: Closure Planning
MM10
Number and percentage of operations with closure plans
Sustainability Performance > Key Performance Data (see page 87)
Sustainability Approach > Materiality (see page 36)
Social Impact > Our Approach (see page 55)
Social Impact > Manitoba > Maintaining Roots and Planning for the Future (see page 57)
Environment > Our Approach > Land and Biodiversity (see page 65)
Environment > Our Approach > Closure and Reclamation (see page 67)
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Sustainability Disclosure Topics and Accounting Metrics
CEO MESSAGE
Topic
Accounting metric
Category
Unit of measurement
Code
SASB response
OUR FEATURE CASE STUDIES
Greenhouse gas
emissions
Gross global Scope 1 emissions, percentage covered
under emissions-limiting regulations
Quantitative
Metric tons (t) CO₂-e,
percentage (%)
EM-MM-110a.1
Environment > Our Approach > Energy Use and Greenhouse Gas
Emissions (see page 66)
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
Sustainability Performance > Key Performance Data (see page 89)
CDP Report
Note: Percentage covered under emissions-limiting regulations not
available.
Discussion of long-term and short-term strategy
or plan to manage Scope 1 emissions, emissions
reduction targets, and analysis of performance
against those targets
Air quality
Air emissions of the following pollutants:
Discussion
and analysis
N/ap
EM-MM-110a.2
Environment > Our Approach > Energy Use and Greenhouse Gas
Emissions (see page 66)
CDP Report
CO
NOx (excluding N2O)
SOx
Particulate matter (PM10)
Mercury (Hg)
Lead (Pb)
Quantitative
Metric tons (t)
EM-MM-120a.1
Sustainability Performance > Key Performance Data (see page 89)
Quantitative
Metric tons (t)
EM-MM-120a.1
N/ap
Quantitative
Metric tons (t)
EM-MM-120a.1
N/ap
Quantitative
Metric tons (t)
EM-MM-120a.1
Sustainability Performance > Key Performance Data (see page 89)
Quantitative
Metric tons (t)
EM-MM-120a.1
N/ap
Quantitative
Metric tons (t)
EM-MM-120a.1
N/ap
Volatile organic compounds (VOCs)
Quantitative
Metric tons (t)
EM-MM-120a.1
N/ap
Total energy consumed
Quantitative
Gigajoules (GJ)
EM-MM-130a.1
Sustainability Performance > Key Performance Data (see page 89)
Percentage grid electricity
Quantitative
Percentage (%)
EM-MM-130a.1
CDP Report
Percentage renewable
Quantitative
Percentage (%)
EM-MM-130a.1
CDP Report
CDP Report
Energy
management
Water
management
Total fresh water withdrawn, percentage of
each in regions with high or extremely high
baseline water stress
Quantitative
Thousand cubic metres
(m³), percentage (%)
EM-MM-140a.1
Sustainability Performance > Key Performance Data (see page 90)
CDP Water Report
Total fresh water consumed, percentage of
each in regions with high or extremely high
baseline water stress
Quantitative
Thousand cubic metres
(m³), percentage (%)
EM-MM-140a.1
Sustainability Performance > Key Performance Data (see page 90)
CDP Water Report
Number of incidents of non-compliance associated
with water quality permits, standards and regulations
Quantitative
Number
EM-MM-140a.2
Sustainability Performance > Key Performance Data (see page 90)
CDP Water Report
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CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
Topic
Accounting metric
Category
Unit of measurement
Code
SASB response
Waste and
hazardous materials
management
Total weight of tailings waste, percentage recycled
Quantitative
Metric tons (t),
percentage (%)
EM-MM-150a.1
Sustainability Performance > Key Performance Data (see page 90)
Total weight of mineral processing waste,
percentage recycled
Quantitative
Metric tons (t),
percentage (%)
EM-MM-150a.2
Sustainability Performance > Key Performance Data (see page 90)
Number of tailings impoundments, broken down by
MSHA hazard potential
Quantitative
Number
EM-MM-150a.3 Mine Tailings Disclosure table
Biodiversity
impacts
Description of environmental management policies
and practices for active sites
Discussion and
analysis
N/ap
EM-MM-160a.1
Environment > Our Approach (see page 65)
Sustainability Approach > Sustainability Governance > International Best
Practice Standards (see page 28)
EHS Policy
Percentage of mine sites where acid rock drainage is:
predicted to occur
Percentage of mine sites where acid rock drainage is:
actively mitigated
Percentage of mine sites where acid rock drainage is:
under treatment or remediation
Percentage of (1) proved and (2) probable reserves
in or near sites with protected conservation status or
endangered species habitat
Percentage of (1) proved and (2) probable reserves in
or near indigenous land
Security, human
rights and rights of
indigenous peoples
Quantitative
Percentage (%)
EM-MM-160a.2
Environment > Our Approach > Waste and Tailings (see page 67)
Quantitative
Percentage (%)
EM-MM-160a.2
Environment > Our Approach > Waste and Tailings (see page 67)
Quantitative
Percentage (%)
EM-MM-160a.2
If it is potentially contaminated by ARD, it is contoured to flow to our
treatment plant.
Quantitative
Percentage (%)
EM-MM-160a.3
Sustainability Performance > Key Performance Data (see page 92)
Quantitative
Percentage (%)
EM-MM-210a.2
Sustainability Performance > Key Performance Data (see page 87)
Discussion of engagement processes and due
diligence practices with respect to human rights,
indigenous rights, and operation in areas of conflict
Discussion and
analysis
N/ap
EM-MM-210a.3
Sustainability Approach > Sustainability Governance > International Best
Practice Standards (see page 28)
Sustainability Approach > Human Rights and Security (see page 29)
Sustainability Approach > Stakeholder Engagement (see page 33)
Social Impact > Exchanging Knowledge and Empowering Local
Communities (see page 54)
Social Impact > Our Approach (see page 55)
Social Impact > Manitoba (see page 57)
Social Impact > Peru (see page 59)
Social Impact > Arizona (see page 61)
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OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
Topic
Accounting metric
Category
Unit of measurement
Code
SASB response
Community
relations
Discussion of process to manage risks and
opportunities associated with community rights
and interests
Discussion and
analysis
N/ap
EM-MM-210b.1 Our Company > Risk Management (see page 17)
Social Impact > Our Approach > Community Relations (see page 55)
Social Impact > Our Approach > Community Development (see page 56)
Number and duration of non-technical delays
Quantitative
Number, days
EM-MM-210b.2
Sustainability Performance > Key Performance Data (see page 78)
Labour relations
Percentage of active workforce covered under
collective bargaining agreements, broken down by
US and foreign employees
Quantitative
Percentage (%)
EM-MM-310a.1
Sustainability Performance > Key Performance Data (see page 78)
Number and duration of strikes and lockouts1
Quantitative
Number, days
EM-MM-310a.2
Sustainability Performance > Key Performance Data (see page 78)
SUSTAINABILITY APPROACH
Workforce health
and safety
MSHA all-incidence rate for (a) full-time employees
and (b) contract employees
Quantitative
Rate
EM-MM-320a.1
Sustainability Performance > Key Performance Data (see page 81)
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
Fatality rate for (a) full-time employees and
(b) contract employees
Quantitative
Rate
EM-MM-320a.1
Sustainability Performance > Key Performance Data (see page 84)
Business ethics
and transparency
Description of the management system for prevention
of corruption and bribery throughout the value chain
Discussion and
analysis
N/ap
EM-MM-510a.1 Our Company > Business Conduct (see page 16)
Our Company > Risk Management (see page 17)
Production in countries that have the 20 lowest
rankings in Transparency International’s Corruption
Perception Index
Quantitative
Metric tons (t) saleable
EM-MM-510a.2
N/ap
Activity Metrics
Activity metric
Category
Unit of measurement
Code
SASB response
Production of (1) metal ores and (2) finished metal products
Quantitative
Metric tons (t) saleable
EM-MM-000.A
Sustainability Performance > Key Performance Data (see page 76)
Total number of employees, percentage contractors
Quantitative
Number, Percentage (%) EM-MM-000.B
Sustainability Performance > Key Performance Data (see page 77)
1 Note to EM-MM-310a.2 – Disclosure shall include a description of the root cause for each work stoppage.
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About This Report
Since 2014, we have combined our annual report and
our corporate social responsibility report, which we
have renamed the Annual and Sustainability Report. We
believe social and environmental performance is as
important as financial and operating performance, and
that combining the reports presents a representative
account of the Company’s activities in 2019.
We published our Management’s Discussion and
Analysis of Results of Operations and Financial
Condition and the consolidated financial statements
for the year ended December 31, 2019, on February 20,
2020. Copies are posted on our website. The Business
and Financial Review section of this report covers the
content usually included in our annual report.
We have produced an annual sustainability report every
year since our 2003 report, and this is our 12th report
based on the Global Reporting Initiative (GRI)
Sustainability Reporting Guidelines. Our most recent
previous report was released in June 2019. This report
contains standard disclosures from the GRI
Sustainability Reporting Standards, prepared largely in
accordance with the Core option.
Our report covers all operating and project locations
reported in Our Company, as well as exploration
activities managed by Hudbay in Chile during the 2019
calendar year. Sustainability report content has been
defined based on our materiality analysis and aspects
identification process, which applied to all of Hudbay’s
operating assets.
More information on the scope of our reporting is
available in the Sustainability Performance Data
section of this report.
CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
GRI
102-45
102-50
102-51
102-52
general discussion of the extent to which the estimates
of scientific and technical information may be affected
by any known environmental, permitting, legal title,
taxation, socio-political, marketing or other relevant
factors, please see the Technical Reports for the
Company’s material properties as filed by Hudbay on
SEDAR at www.sedar.com.
Qualified Person
The technical and scientific information in this annual
report related to the Constancia mine and Rosemont
project has been approved by Cashel Meagher, P. Geo.,
Hudbay’s Senior Vice President and Chief Operating
Officer. The technical and scientific information related
to our other material projects contained in this annual
report has been approved by Olivier Tavchandjian,
P. Eng., Hudbay’s Vice President of Exploration and
Geology. Messrs. Meagher and Tavchandjian are
qualified persons pursuant to NI 43-101. For a
description of the key assumptions, parameters and
methods used to estimate mineral reserves and
resources, as well as data verification procedures and a
102-53
102-54
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BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
Caution Regarding Forward-Looking
Information
This annual report contains “forward-looking
information” within the meaning of applicable
Canadian securities laws and “forward looking
statements” within the meaning of the “safe harbour”
provisions of the U.S. Private Securities Litigation
Reform Act of 1995. We refer to such forward-looking
statements and forward-looking information together
in this annual report as forward-looking information. All
information contained in this annual report, other than
statements of current and historical fact, is forward-
looking information. Often, but not always, forward-
looking information can be identified by the use of
words such as “plans”, “expects”, “budget”, “guidance”,
“scheduled”, “estimates”, “forecasts”, “strategy”,
“target”, “intends”, “objective”, “goal”, “understands”,
“anticipates” and “believes” (and variations of these or
similar words) and statements that certain actions,
events or results “may”, “could”, “would”, “should”,
“might” “occur” or “be achieved” or “will be taken” (and
variations of these or similar expressions). All of the
forward-looking information in this annual report is
qualified by this cautionary note.
Forward-looking information includes, but is not
limited to, production, cost and capital and exploration
expenditure guidance and potential revisions to such
guidance, anticipated production at our mines and
processing facilities, expectations regarding the impact
of the COVID-19 pandemic on our operations, financial
condition and prospects, expectations regarding the
timing of mining activities at the Pampacancha deposit,
the anticipated timing, cost and benefit of developing
the Rosemont project and the outcome of litigation
challenging Rosemont’s permits, expectations
regarding the appointment of a permanent CFO,
expectations regarding the Lalor gold strategy,
including the refurbishment of the New Britannia mill,
the possibility of converting inferred mineral resource
estimates to higher confidence categories, the
potential and our anticipated plans for advancing our
mining properties surrounding Constancia and the
Mason project, anticipated mine plans, anticipated
metals prices and the anticipated sensitivity of our
financial performance to metal prices, events that may
affect our operations and development projects,
anticipated cash flows from operations and related
liquidity requirements, the anticipated effect of
external factors on revenue, such as commodity prices,
estimation of mineral reserves and resources, mine life
projections, reclamation costs, economic outlook,
government regulation of mining operations, and
business and acquisition strategies. Forward-looking
information is not, and cannot be, a guarantee of
future results or events. Forward-looking information is
based on, among other things, opinions, assumptions,
estimates and analyses that, while considered
reasonable by us at the date the forward-looking
information is provided, inherently are subject to
significant risks, uncertainties, contingencies and other
factors that may cause actual results and events to be
materially different from those expressed or implied by
the forward-looking information.
The material factors or assumptions that we identified
and were applied by us in drawing conclusions or
making forecasts or projections set out in the forward-
looking information include, but are not limited to:
• the duration of the state of emergency in Peru and
our ability to resume operations at Constancia;
• no significant interruptions to our operations
in Manitoba or significant delays to our
development projects in Manitoba and Peru due
to the COVID-19 pandemic;
• the availability of spending reductions and
liquidity options;
• the timing of development and production activities
on the Pampacancha deposit;
• the timing of the Consulta Previa and permitting
process for mining the Pampacancha deposit;
• the timing for reaching additional agreements
with individual community members and no
significant unanticipated delays to the development
of Pampacancha;
• the successful completion of the New Britannia
project on budget and on schedule;
• the successful outcome of the Rosemont litigation;
• the success of mining, processing, exploration and
development activities;
• the scheduled maintenance and availability of our
processing facilities;
• the accuracy of geological, mining and
metallurgical estimates;
• anticipated metals prices and the costs of
production;
• the supply and demand for metals we produce;
• the supply and availability of all forms of energy
and fuels at reasonable prices;
• no significant unanticipated operational or
technical difficulties;
• the execution of our business and growth strategies,
including the success of our strategic investments
and initiatives;
• the availability of additional financing, if needed;
• the ability to complete project targets on time and
on budget and other events that may affect our
ability to develop our projects;
• the timing and receipt of various regulatory and
governmental approvals;
Hudbay 2019 Annual and Sustainability Report
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CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
• the availability of personnel for our exploration,
development and operational projects and ongoing
employee relations;
• maintaining good relations with the communities in
which we operate, including the neighbouring
Indigenous communities;
• no significant unanticipated challenges with
stakeholders at our various projects;
• no significant unanticipated events or changes
relating to regulatory, environmental or health and
safety matters;
• no contests over title to our properties, including
as a result of rights or claimed rights of Indigenous
peoples or challenges to the validity of our
unpatented mining claims;
• the timing and possible outcome of pending
litigation and no significant unanticipated litigation;
• certain tax matters, including, but not limited to,
current tax laws and regulations and the refund of
certain value added taxes from the Canadian and
Peruvian governments; and
• no significant and continuing adverse changes in
general economic conditions or conditions in the
financial markets (including commodity prices and
foreign exchange rates).
The risks, uncertainties, contingencies and other
factors that may cause actual results to differ materially
from those expressed or implied by the forward-
looking information may include, but are not limited to,
risks associated with the COVID-19 pandemic and its
effect on our operations, financial condition, projects
and prospects, the possibility of a global recession
arising from the COVID-19 pandemic and attempts to
control it, the political situation in Peru, risks generally
associated with the mining industry, such as economic
factors (including future commodity prices, currency
fluctuations, energy prices and general cost escalation),
uncertainties related to the development and
operation of our projects (including risks associated
with the litigation affecting the Rosemont project),
risks related to the U.S. district court’s recent decisions
to set aside the U.S. Forest Service’s FROD and the
Biological Opinion for Rosemont and related appeals
and other legal challenges, risks related to the new
Lalor mine plan, including the schedule for the
refurbishment of the New Britannia mill and the ability
to convert inferred mineral resource estimates to
higher confidence categories, risks related to the
schedule for mining the Pampacancha deposit
(including risks associated with COVID-19, the Consulta
Previa process, risks associated with reaching additional
agreements with individual community members and
risks associated with the rainy season in Peru and the
impact of any schedule delays), dependence on key
personnel and employee and union relations, risks
related to political or social unrest or change, risks in
respect of Indigenous and community relations, rights
and title claims, operational risks and hazards, including
unanticipated environmental, industrial and geological
events and developments and the inability to insure
against all risks, failure of plant, equipment, processes,
transportation and other infrastructure to operate as
anticipated, compliance with government and
environmental regulations, including permitting
requirements and anti-bribery legislation, depletion of
our reserves, volatile financial markets that may affect
our ability to obtain additional financing on acceptable
terms, the failure to obtain required approvals or
clearances from government authorities on a timely
basis, uncertainties related to the geology, continuity,
grade and estimates of mineral reserves and resources,
and the potential for variations in grade and recovery
rates, uncertain costs of reclamation activities, our
ability to comply with our pension and other post-
retirement obligations, our ability to abide by the
covenants in our debt instruments and other material
contracts, tax refunds, hedging transactions, as well as
the risks discussed under the heading “Risk Factors” in
our 2019 Annual Information Form (“AIF”), and
otherwise throughout this annual report.
Should one or more risk, uncertainty, contingency or
other factor materialize or should any factor or
assumption prove incorrect, actual results could vary
materially from those expressed or implied in the
forward-looking information. Accordingly, you should
not place undue reliance on forward-looking
information. We do not assume any obligation to
update or revise any forward-looking information after
the date of this annual report or to explain any material
difference between subsequent actual events and any
forward-looking information, except as required by
applicable law.
Contact Us
We invite your comments and questions about
this report.
For investor relations matters, please contact
Candace Brûlé, Director, Investor Relations,
416 814-4387, investor.relations@hudbay.com.
For CSR matters, please contact David Clarry,
Vice President, Corporate Social Responsibility,
416 362-7364, david.clarry@hudbay.com.
Annual and Special Meeting of Shareholders
May 21, 2020, 10:00 a.m. ET
By way of virtual meeting
Hudbay 2019 Annual and Sustainability Report
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CEO MESSAGE
OUR FEATURE CASE STUDIES
OUR COMPANY
BUSINESS AND
FINANCIAL REVIEW
SUSTAINABILITY APPROACH
OUR PEOPLE
SOCIAL IMPACT
ENVIRONMENT
SUSTAINABILITY
PERFORMANCE
Glossary
Accident frequency – number of injuries (recordable
or lost time) multiplied by 200,000, divided by total
hours worked
Biodiversity – short for “biological diversity”; the
variety of living organisms, genetic diversity and
habitat diversity that creates and sustains variation
in the environment
Community investment – voluntary investment of
funds in the broader community, including for physical
infrastructure and social programs
Conflict-free minerals – mineral production that does
not contribute to serious human rights abuses in
regions of armed conflict (drawing on the definitions
provided in the Dodd–Frank Act)
Contractor – one who agrees to perform work or
supply items at a certain price or rate
Donations – contributions to charities
Employee – a person directly employed by Hudbay
and/or its subsidiaries
GRI Standards – performance indicators contained in
the GRI Sustainability Reporting Standards
GHG emissions – greenhouse gas emissions
N/ap – not applicable
N/av – not available
Global Reporting Initiative (GRI) – an independent
institution whose mission is to develop and disseminate
globally applicable sustainability reporting guidelines.
For more information, visit globalreporting.org
Grant in lieu – an amount paid instead of property taxes
Lost time accident (LTA) – a work-related injury that
prevents the injured person from returning to work on
his/her next scheduled workday after the day the injury
occurred, because he/she is unfit to perform any duties
MAC – Mining Association of Canada
Material information – a fact or a change to the
Company that could reasonably be expected to have a
significant effect on the market price or value of the
securities of the Company
Restricted work – a work-related injury where a licensed
health care provider or the employer recommends that
the employee not perform one or more routine job
functions or not work the usual full workday
Tailings – the fine waste rock that remains after
separating the valuable minerals from the ore during
mining and processing of mineral resources. Tailings
may contain trace quantities of metals found in the
host ore, as well as added compounds used to extract
the minerals
TSM – Towards Sustainable Mining, an initiative of the
Mining Association of Canada
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