[OPERATIONS TRENDS AND INNOVATION]

[Afonso Sartorio] (3:04 - 9:07)
Good day, everybody. Welcome to EY America's Mining and Metals Forum. This year, our agenda covers four topics.

First, associated with opportunities in critical minerals. Second one, the opportunities and the challenges associated with building a more responsible mining sector. A third, associated with people challenges and how to engage in the workforce.

The fourth one is this panel we are in. In this panel, we will address the topic of innovation for the benefit of performance in mine operations. So, mine operations have been challenged lately, not only to produce good volumes at low cost, but also to cope with increasingly important needs associated with safety, with impact to environment and to people, as well as different and more strict quality requirements.

So, this imposes a set of challenges that miners are trying to address. And we will discuss how they are going about it, so that not only shareholders, but the ecosystem of stakeholders that influence and are impacted by mine operations are happy with the development of the sector. So, the discussion we will have will focus on culture and how to build a performance culture adapted to this new age of mining.

We will talk about innovation and technologies that can bring about effective innovation. We will talk about how decarbonization and sustainability translate into challenges and opportunities for mine operations. And we'll talk also about what would be the key elements for sustaining productivity in our sector.

Now, it's time for you, our audience. I would like to take a moment to have you engage through a polling question. And the question is, please share your perspective on which area of innovation you believe holds the most promise to transforming the mining sector.

Please take a moment to respond to the poll. To bring live these ideas, we thought about inviting three executives, senior executives from the mining sector that can bring interesting ideas, but also complementary and distinct points of view. Richard is Executive Chairman at Bunker Hill Mining.

And prior to that important role, Richard had a role at Barrick Gold as COO and also as a commanding officer at the British military. Thank you, Richard, for joining. Paulo Pires is currently Global Director of Technology and Innovation at Vale.

And prior to that, had a role as Vice President Engineering and Manufacturing at Embraer. Thank you, Paulo, for accepting our invitation. And we also have Marcelo Pereira, Senior Vice President at AngloGold Ashanti LATAM.

Prior to that, Marcelo had the roles of Operations Director at Vale and at Kinross. Thank you, Marcelo, for accepting the invitation. I'll start with the first question, if I may.

And I'll address this, Richard, to you. And then I'll ask Marcelo to provide comments, if it's good for you. So the context we are in, we are seeing that mining companies are trying to create a net positive contribution to the environment and society across all these dimensions I've commented on.

This is important for the social license to operate, which then is important for the license to operate, which is important for the access to markets and capital. So it all holds together in a way that quality is interrelated with safety, with volumes, with impact to environment and so on and so forth. This creates a need for a broader view on performance, not only volumes and cost, but the broader view on performance.

So, Richard, in this context, my question to you is, how can mine companies deliver tangible results in operations while balancing off all these different dimensions that sometimes are conflicting?

[Richard Williams] (9:10 - 11:24)
Thank you, Alfonso. It's a vital and enduring question. And I answer it or I put on the table for the other panellists as well to discuss.

Is that when you look at mining companies and you ask their executives, what are their priorities with respect to the management of risk? Typically and necessarily, the first response will be to hurt no one. Secondly, it will be not to damage the environment.

And then thirdly, is to ensure that we maximise productivity, which the combination of those three things leads to the maximum sustainable profits over the longest period of time. It's quite easy to say, but actually, when you're running either a small operation or a portfolio of operations, as one was doing at Barrick, ensuring that there's absolute alignment in those risk management priorities is your first and most vital task. It is, of course, what all stakeholders, not just the investors, the vital shareholders of a company expect.

But it's also, interestingly, what every serious, mature employee or contractor working with the mining company wants. So I'd say that in answer to your question, it's, as I said, it's an enduring and timeless conundrum for the management of a company where the delivery of success or the definition of success is related to the successful management of the downside risk in ways that ensures maximum output. So alignment of priorities relative to that is the key task culturally and organisationally one's got to meet.

[Afonso Sartorio] (11:26 - 12:07)
Thank you, Richard. These are quite challenging elements to put on, right, because of the diverse nature of the elements that should be aligned so that in the bottom line, you are able to deliver productivity. But before bearing in mind all those elements, Marcelo, in your experience, what ways of working you've seen proved successful so that such a culture be present at the mine operation?

[Marcelo Pereira] (12:09 - 14:51)
Yeah, thanks, Afonso. First, good morning, afternoon or evening for those who are attending the session. Yeah, very good points that Richard has brought to us.

And I fully agree with all topics related with risk, the priorities that we have to put in place when we are talking about the performance culture among all of these dimensions that we have mentioned. So I would say that there are responsibilities beyond the balance sheet or compliance with the current regulation. The world is really changing, and we are a key part of it.

It is important that we, our teams, are committed to be a better neighbour, a good partner of the first and the third sectors, which I mean the public administration and non-profit organisations. But not less important is to make sure that we are building solid organisations. In my view, there is no space anymore for greenwashing or non-compliance operations.

Adopt a sustainable agenda, which highlights its practices beyond speech, is an increasing demand from all audiences that in some way interact with our companies. In this direction, I would say that we must be responsible, creative, disruptive, smart, and excellent in developing capable people, solid processes and systems, that in the end of the day will result in better production and margins, which will make our company solid. But also, we don't lose the focus on a more insightful purpose, that in the case of ADA, is meant to develop people and society.

Starting with our employees and also developing actions beyond our assets, like investments in better quality of products, minimising as much as possible the generation of waste or tailings. Especially in Brazil, we know that with the two tragedies that we had here, it became a serious and very important point for all of us, to make sure that we are managing properly our waste or tailings. And also lowering the emissions, water demand, and also minimising impacts like noise or dust to our neighbours.

It is a real challenge when we are doing that, making sure that we are producing as much as we can. But in this way, we are building step by step a culture that can deliver results, balancing all of the trade-offs that we have to deal with on a day-by-day basis. It is something that we as leaders have to make sure that we are really cascading and delegating to our teams properly.

[Afonso Sartorio] (14:53 - 16:52)
Richard and Marcelo, thank you for your insights. It is not easy to bring live results based on such a broad and interdependent context, which demands constant change to adapt to new perspectives. So, constant innovation.

Paulo, I would like to ask your contribution in this matter here. We have seen a lot of attention, a lot of resources, being allocated to innovation and development of technologies, with very good results, to safety, to output, to quality. But also a few disappointing ones, especially when we don't pay as much attention as we should to the people elements, such as behaviour, comprehension, incentives, or when the focus is very siloed, not wide, doesn't have a wide impact in the value chain.

So, the question that I would like to ask you is twofold. First, what is your approach for introducing changes through innovation and technology into operations that really stick and are sustainable and drive significant value? And the other one, adding on top of it, considering Gen AI, which is a hype at the moment, how can Gen AI really bring value to mine operations and what considerations should they take as they pursue gains from it?

Thank you, Paulo.

[Paulo Pires] (16:52 - 21:06)
Thank you, Afonso. Thanks for asking.

I'll start by the innovation portion. At Vale, we reviewed the way we approach innovation in the last one and a half year. And basically, what we did was to do a fine-tuning in between innovation and the business needs to really allow innovation to add value to the business.

So, instead of innovation by innovation, at the end of the day, it's a game without any winner, because it will be people trying to do innovation, and innovation is attractive to people. So, lots of people like to do innovation, but not essentially the innovation needed to add value to the company. So, we repositioned innovation inside Vale, and we aligned that with continuous improvement movement as well, looking at the value streams inside the company and aligning innovation to these value streams in order to, say, look at the process before and having innovation as an enabler for competitiveness, for safety, for environmentally friendly solutions and so on.

But I would say the trick was to look for a process from a business perspective, being aligned with business, and streamlining the value stream in order to fix processes before putting innovation on the top of that. I'd say that there's no good innovation able enough to fix a bad process. So, it's important to do this, to align with the lean movement we have at Vale, to do the cleaning aligned with business purpose, really delivering the business purpose there, and the innovation being the lever to make it happen, make it happen better, to make it happen safer, to make it happen quicker than without innovation.

That was essentially fine-tuning we did at Vale. The second part of your question regarding the AI, the gen AI, it's important to remember that at Vale, we have been working with AI, not gen AI, but AI as a whole for the last, say, 10 years. So, AI is not, say, essentially a new thing for us, even though the tools, the gen AI tools are new for us as are new for everybody.

But I think for me, the smart way to use these gen AI tools and capabilities is to spread them as much as possible, to make them accessible to everybody inside the company, to allow them really delivering value through creating better, smarter ways to do things and getting from analytics, from data, good information that will provide different solutions than, say, the usual ones. And we need to do that, say, safely. I mean, it's not just a matter to spread solutions, but we need to take care of the cyber protection as well to ensure that we provide the safe solutions.

But the key for me is to democratize the use of this gen AI throughout the company and having, say, my dream is to have everybody inside Vale being able to access the gen AI and to use gen AI to facilitate his or her day routines.

[Afonso Sartorio] (21:07 - 22:23)
Very well, Paulo. Thank you. And it's an intelligent approach coming from business to innovation and technology and whenever possible, enabling that it is spread and available for being tested and implemented across the company.

Richard, I'd like to have your perspective on that. Considering your position as a chairman, how are you perceiving the ability of mining companies? Remember, mining has been in the past as a sector regarded as a bit slow to adapt, to act and to adapt to change.

This is possibly past now, but I would like to listen to your perspective. How are you seeing mining companies in that respect in their ability to innovate and change, eventually adopting technologies? In your perspective, which should be the key areas of focus?

[Richard Williams] (22:25 - 26:49)
Thank you. I'll start with a general point, which I think we all agree on, is mining companies will exist in the future related directly to their ability to invest in three things. Firstly, is geology.

Where is the metal in the ground? Economic geology. What can be mined economically?

Secondly, is partnerships, relationships with both investors, governments, communities, workforces, contractors. And thirdly, is innovation. How we are mining today is different to how we were mining 100 years ago.

All three relate to each other. But the point that I thought were excellent points made by the previous speaker, is that the first thing before you innovate, you've got to be well-organized and well-aligned. If you innovate something that is bad, for example, if you digitize something that is bad, you just end up with a bad digital outcome.

And I think that was a very important point. An underpinning excellence on the ground is people. So getting people absolutely central to your strategy of delivering excellence is a common thing that is said by everybody, but it's very hard to do.

And then getting the people, and I thought it was fascinating hearing about, referred to as democratization of AI through a company as large as Barley, implies ownership by those people throughout that organization of a particular technology or system all working to a common end. How you do that is a fascinating challenge. And the fact that actually Barley has been looking at this over 10 years means that companies with balance sheets like Barley can really take some pretty big steps forward on this.

But your question also asked, why is it the mining industry has been slow to innovate? We know the mining industry, it's capital intensive, it's a price taker. So when the commodity cycle moves against you, you tend to take money out of innovation and out of other things just to keep alive.

So you end up with these surges of capital going into innovation, one minute, and then a deficit the next. And I found, for instance, when we invested a lot in innovation in Barrick during my time that was there, what you also end up with is with changes of management or elsewhere or other things, changing priorities. And innovation is best delivered over a long time as a process.

So you end up with this fits and starts of within the industry. So I throw a number of things on the table there, but I'd say that with respect to innovation being vital to the industry, it always has been. With respect to innovation being difficult to achieve with the industry, I've highlighted two or three reasons why that is.

But the key to innovation is what was just spoken about, is a company-wide culture that every single individual is coming into work looking for ways to do what they did yesterday better tomorrow. So innovation is built upon a bed of excellence, a culture of continuous improvement, and then careful allocation of capital into those programs that will deliver step changes over time. But it isn't something that's delivered in 12 months.

It takes about three years to properly turn around a mine, and that gives you a feel for the challenges. If you speak to other industries, they can say we can do that much quicker. But the nature of the complexity of mines is such that in my view, it takes around about that time.

I hope that's helpful.

[Afonso Sartorio] (26:50 - 29:26)
It's a very fair statement, Richard, both on the complexity that the sector has and also on its impact from pricing cycles that sometimes help, sometimes doesn't, the allocation of funds to innovation. And the comment on people being at the center of innovation, spot on, and I think it was also a preoccupation of Paulo when he mentioned the democratization of techniques for the benefit of the operations crew. Next, we'd like to gather your thoughts on another important aspect of today's discussions.

What do you see as the most significant barrier your organization faces in adopting new operational technologies? Please take a moment to respond to the poll. We appreciate your continued engagement.

So with that, I will ask our third question. I'll start with Marcelo and then I'll move to Paulo. Marcelo, we've heard both Paulo and Richard comment on the challenges associated with innovating in the mining sector, how people should be at center, and how it should be thoroughly conducted because it's not simple in our environment.

Now, the industry faces significant challenges associated with energy transition and the need to provide a net positive impact around the sustainability levers. So my question to you is, how are you perceiving in or at Anglo Gold Ashanti these challenges and the need to provide a more positive impact across dimensions, including decarbonization, and its influence in interdependence with where things really happen, mine operations?

[Marcelo Pereira] (29:29 - 32:10)
Oh, thank you. Thank you for the question. And in fact, that's a very good question.

You know, starting, as I had mentioned, our corporate proposing ADA is mining to develop people in society. And also one of our company value is sustainability. So I can say that we are taking it quite seriously.

We are in Brazil, the longest line private company with 190 years. And we understand that sharing values with our stakeholders is what has allowed us to get until here and also prosper through the continuity of our business. We are signatories to the Paris Agreement and the UN Sustainability Development Goals.

In addition to the other global agreements that, you know, in the end of the day, we demonstrate our commitment to these kind of relevant topic, you know, like climate change, reducing the carbon footprint, adopting business practices that promote social and economic equity. I can give you some examples. For example, since 2021, we have reduced 52% of our greenhouse gas emission.

We have implemented 100% dry disposal of waste and advanced in the electrification of our fleets in Brazil with the acquisition of the first 100% electric loader to operate in an underground mine in Brazil, in our operation in Cuiabá, which is about 1600 feet from the sea level. And finally, it is important to mention that most of the metals and minerals are commodities, as we know. And as such, in the event of, you know, any negative variance in prices, I mean, for example, for my current commodity, the gold, the prices is helping at this moment, but we know that the market is the market.

And so it can drop anytime. And so we must make sure that we don't see a lot of business being closed due to this kind of drop in price, this exposure to the price. As Richard was mentioning about the risks that we have in our business, that's one of the risks and one of the most important risks that we have and we cannot control exactly.

You know, it's an exogenous factor, but we must make sure that we're driving properly and we are making the balance between the different dimensions of the business and its sustainability, you know, for a long-term view. It is quite and absolutely important in my view.

[Afonso Sartorio] (32:12 - 32:53)
Thank you, Marcelo. Thank you. Indeed, it's a challenge, but we can understand by listening to you that the industry is moving forward and addressing these urgencies.

Paulo, I'd like to listen from you just on your experience at Vale. How have you seen innovation and technology drive benefits to smooth these risks and to enable the company to be more sustainable to the environment and also contribute to decarbonization?

[Paulo Pires] (32:54 - 36:38)
Thank you, Alfonso. I think the challenge starts by realizing that we take permission to do mining from society. And after doing the mining, we need to deliver back to society the area explored, same usable and same way respecting the nature and so on.

So, in other words, we need to recover, to create a kind of compensation for what we were allowed to explore during these years. And the innovation can be fundamental for that, is being fundamental for that at Vale, because we are bringing different approaches to deal with huge problems in a different way. Like, for instance, the mines we do have low content or typical processes to have the enrichment process and we have the dams to dispose the residues of the process and we need to monitor these dams.

We have been developing currently what we call circular mining that's providing by-products to avoid and aiming to have a zero residue mining operation by creating these by-products. For instance, today we do have some sand production for building industry. Instead of dropping the sand inside the dam, we use the sand as a construction material.

Just for instance, one of these examples. But regarding what technology is bringing to us, in particular connectivity and the price of sensors, I see a revolution happening right now on being able to monitor real-time processes, industrial processes, and anticipating problems in this process even before the problems happen by doing this analytics plus AI plus modelling and enhancing this capability to anticipate and to avoid disruptions and even to bring more safety and productivity to the operations. The connectivity also is enabling us to reach better the operations or even dams in remote locations, enabling us to have this awareness throughout these several different assets we do have in order to operate in a different way than before having access to this technology. So I see, in other words, this technology is providing us smarter ways to do better things regarding safety, regarding the environment, and regarding the productivity inside the business.

[Afonso Sartorio] (36:39 - 37:50)
Very good examples, Paulo, both on the end of from waste generating value but also in the end of providing more safe environment around tailings. So, and now our final polling question for today's discussion. It focuses on the future state of your organization.

In which areas is your organization planning to invest to achieve the greatest productivity gains? Please take a moment to respond. Thank you all for your invaluable insights.

So, thank you. We are about to close the panel, but before that, I would like to ask each of you in a couple of sentences, what, in your perspective, is the key element for sustainable, for unsustained productivity in the mining environment? Richard, starting with you.

[Richard Williams] (37:51 - 38:40)
I'll be repeating myself, but I'll say it again. The critical, mining is a people business. Technology enables the people within mining to do a better, more profitable, sustainable job.

So, it's critical in mining that we put people central to everything we do. Select them, train them, motivate them, get alignment from them. And as Paulo put it, ensure we have excellence and then on top of that, have continuous improvement and then out in front of that, carefully invest in the right types of innovation that lifts all of those people and our industry into a better place.

Very good.

[Paulo Pires] (38:40 - 39:24)
Thank you. Paulo. I can't agree more to Richard that I strongly believe by putting people in the centre of everything, we enable to be innovative, to be aligned with new technologies, open to receive and to work these new technologies, open to create better processes or to improve the current ones.

But the key is people motivated, safe, well-recognized and empowered to do their job. Very good. Appreciate.

Marcelo.

[Marcelo Pereira] (39:27 - 41:39)
Yeah, very good points that Richard and Paulo had mentioned about people. And to have capable people is key and imperative to make sure that we can implement our processes and objectives according to what we are planning to. And so, one other thing that I would mention is the challenge that we have is to make sure that also we engage all of the teams on this journey.

It's not a simple task. We must change the behaviour of some. We have to make sure that everybody understands that's not just a very good speech or a good message that we are trying to sell, but something that we really believe that's possible.

To really have harmony and good relationship, partnership between or among our companies, mining companies, the society, public government and all of these. And on this end, one challenge that I really would highlight is how can we really be part of the change that we need, that we are promoting at this moment. I mean, when we are discussing about the risks and the challenges that we have, for example, for permitting process, how can we engage?

How can we communicate? How can we dialogue with the government in order to create proper processes that will allow them to continue keeping very good strategies on the environmental side, on the health side, on the safety side, but at the same moment, a way that we cannot jeopardise the competitiveness of our companies. And so, it is something that we will do only if there is an open dialogue.

And that's a challenge that we are going to have in both sides. And I'm quite confident that we are going to be able to move forward in a good way because all of us are focusing and with the same objective, that's to improve our communities and keep our companies providing best competitiveness and supporting communities and all these stakeholders that we have.

[Afonso Sartorio] (41:40 - 43:22)
Thank you, terrific, Marcelo. So, in the end, we are in this industry that's quite science and engineering driven that needs to take into account the demands, the needs, the impacts from different stakeholders. And in order to do so, people should be at the centre, not only by caring for people, but also aligning and making people within the organisation communicate properly with stakeholders from the ecosystem, which connects to the topic on workforce and people, another topic that we've selected to this edition of America's Mining and Metals Forum.

I thank you very much, Richard, Paulo and Marcelo, for your attention, for taking the time to share your experience and ideas with our audience. And to you, our audience, I also thank you for staying with us, for sparing time to listen for this panel. And we hope that you were able to write down a couple of takeaways, which will enable you also to create a positive impact to the mining sector and the society.

Thank you so much. Take care, have a good day.

[Theo Yameogo] (43:25 - 44:05)
Well, Kaki, as you know, I grew up in operations and mining, so I really, really enjoy discussing around where operations is heading and how innovation is being run. And it was good to hear the panelists discuss safety, environmental impact, all the while ensuring strong operational performance. I think for me, the key takeaway was that effective innovation must be rooted in the strong performance culture by adapting to both the new demand and technology while avoiding wind washing.

I believe that we need to take operation to a new level, but we also don't want to waste operations time by doing science projects. So it's great to see that.

[Kaki Giauque] (44:06 - 44:41)
Yes, I found it particularly insightful. What really struck me is that even with advanced technology solutions, without a strong culture and leadership setting very high standards, the technology alone won't be effective. Next, we'll move into our final discussion, focusing on responsible metals and mineral stewardship, moderated by Gabriel Kazour, EY Canada Metals and Mining Enterprise Risk Leader.

This panel will explore the principles and practices essential for sustainable resource management.