Confidential

Minera Escondida Limitada

MEMORIA ANUAL
Diciembre 31, 2022
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I. SOBRE ESTA MEMORIA

La presente Memoria Anual de Minera Escondida Limitada (en adelante “Escondida” o “la
Compañía”), ha sido elaborada en cumplimiento de lo establecido en el Artículo 11 ter, del
Decreto Ley N° 600 de 1974 y sus modificaciones, y de la Resolución Exenta N°298 de la
Superintendencia de Valores y Seguros (hoy la Comisión para el Mercado Financiero), de fecha
17 de mayo de 2010, que fijó el texto refundido de la Resolución Exenta N°549, de fecha 23 de
septiembre de 2005, y sus modificaciones, en virtud de los cuales la Compañía tiene la
obligación de presentar a dicha Comisión sus estados financieros trimestrales, estados
financieros anuales auditados y una memoria anual.
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Nuestra Carta

Escondida se acoge a la carta de valores de BHP.

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II. IDENTIFICACIÓN DE LA COMPAÑÍA

1. Identificación Básica

Nombre o razón social: Minera Escondida Limitada

Domicilio Legal: Cerro El Plomo 6000, piso 15, Las Condes, Santiago
Rol Único Tributario: 79.587.210-8
Tipo de Sociedad: Sociedad de Responsabilidad Limitada

2. Direcciones y Teléfonos de Contacto:

Dirección Comercial (Santiago): Cerro El Plomo 6000, piso 15, Las Condes, Santiago
Fono: +56 (2) 2579 5990
Correo electrónico: recepcion.santiago@bhp.com
Dirección Comercial (Antofagasta): Avenida de la Minería N° 501, Antofagasta
Fono: +56 (55) 220 30 00
Yacimiento: Ubicado en el Desierto de Atacama a 170 km al
sureste de la ciudad de Antofagasta y a 3.100 metros
sobre el nivel del mar. Región de Antofagasta.
Fono: +56 (55) 220 3000

Página web: http://www.bhp.com/es/about/our-

businesses/minerals-americas

3. Documentos Constitutivos:

Minera Escondida Limitada es una sociedad de responsabilidad limitada constituida por

escritura pública de fecha 14 de agosto de 1985, otorgada ante el Notario Público de Santiago,
don Patricio Raby Benavente, suplente del titular don Andrés Rubio Flores.

El extracto de la escritura de constitución fue inscrito a fojas 12.876 bajo el N° 6.652 del Registro
de Comercio correspondiente al año 1985, a cargo del Conservador de Bienes Raíces de
Santiago y fue publicado en el Diario Oficial de fecha 20 de agosto de ese año.

III. PROPIEDAD DE LA ENTIDAD

Participación % Año 2022

BHP Escondida Inc. (RUT 59.023.350-1) 57.5%

Rio Tinto Escondida Limited (RUT 59.023.330-7) 30.0%

JECO Corporation (RUT 59.023.340-4) 10.0%

JECO 2 Ltd (RUT 59.158.690-4) 2.5%

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IV. ADMINISTRACIÓN Y PERSONAL

La administración de Escondida ha sido encomendada por los socios a un Comité de

Propietarios, compuesto de tres miembros designados por BHP Escondida Inc., dos miembros
designados por Río Tinto Escondida Limited, un miembro designado por JECO Corporation y
un miembro designado por JECO 2 LTD, pudiendo cada socio designar uno o más miembros
suplentes.

Al cierre del año 2022, nuestro Comité de Propietarios estaba compuesto como sigue:

BHP Escondida Inc.:

Ragnar Udd, Presidente de BHP Minerals Americas y Presidente del Comité de Propietarios
de Escondida
Frances Summerhayes, Vicepresidente de Finanzas de BHP Minerals Americas
James Whittaker, Presidente de Minera Escondida

Río Tinto Escondida Limited:

Clayton Walker, Chief Operating Officer Copper – Rio Tinto

Bold Baatar, Chief Executive Copper – Rio Tinto

JECO Corporation y JECO 2 Ltd:

Tadashi Mizuno, CEO & Director, M.C. Inversiones Limitada

El Comité Ejecutivo, al cierre del año 2022 estaba compuesto como se indica:

James Whittaker Presidente de Minera Escondida

Cristiana Moraes Head de Finanzas
Juan Mardones Head de Proyectos
Valentino Rota Head de Recursos, Planificación y Desarrollo
Marcela Madrid Head de Recursos Humanos
Juan Cristóbal Marshall Head de Asuntos Corporativos
Rodrigo Caballero Head de Operaciones Integradas
Ian Oxley Head de Procurement
William Thomson Head de Tecnología
Carolina Cuadros Head de HSE
Hernan Albornoz Head de Legal
Jorge Jalil Gerente de Riesgos
Jaime Rivera Gerente General de Operaciones Mina
Claudio Muñoz Gerente General de Operaciones Concentradoras
Olga Alfaro Gerente General de Operaciones Cátodos
Yerko Fuentes Gerente General de Operaciones NPI & CHO

Al 31 de diciembre de 2022 la Compañía cuenta con una dotación propia de 3.917 empleados,
distribuidas de la siguiente manera:
N° de Personas
Ejecutivos 234
Supervisores / Profesionales 992
Operadores / Administrativos / Similares 2.544
Graduados 19
Aprendices 128
Total Dotación Propia 3.917

La dotación de contratistas operacionales al 31 de diciembre de 2022 fue de 7.716 personas.

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V. PERFIL CORPORATIVO

Escondida es operada por BHP a través de su división BHP Minerals Americas. Escondida es
la operación minera individual de cobre de mayor producción en el mundo. Produce
concentrado y cátodos de cobre. Sus operaciones productivas se ubican en la Región de
Antofagasta, Chile, a 170 km al sureste de la ciudad de Antofagasta y a 3.100 metros sobre el
nivel del mar.

La infraestructura actual en faena consiste en dos rajos abiertos (Escondida y Escondida Norte),
sistemas de chancado y transporte de mineral, tres plantas concentradoras (Laguna Seca Línea
1 y 2 y Los Colorados), dos pilas de lixiviación, dos plantas de extracción por solventes y una
planta de electro-obtención, así como dos mineroductos que transportan el concentrado desde
la mina hasta la planta de filtros, ubicada junto a las instalaciones en Puerto Coloso, también
de propiedad de la Compañía.

Puerto Coloso está ubicado en el extremo sur de la ciudad de Antofagasta, donde operan
también dos plantas desalinizadoras de agua de mar que producen agua de uso industrial para
la operación. La segunda fue comisionada en junio de 2017. El agua desalinizada, junto con el
agua de filtrado, se transporta a través de un acueducto de 167 kilómetros hasta llegar a la
mina. El concentrado de cobre se obtiene a través del proceso de flotación de mineral sulfurado
y los cátodos de cobre, mediante lixiviación de mineral oxidado, bio-lixiviación de sulfuros de
baja ley, extracción por solventes y electro-obtención. Sus oficinas corporativas se encuentran
en la ciudad de Antofagasta.

VI. HISTORIA

La historia de Escondida se inicia en 1979 cuando Minera Utah de Chile Inc. y Getty Mining
(Chile) Inc. acordaron desarrollar un programa de exploración minera en el norte de Chile, para
lo que convinieron en financiar la operación en partes iguales y designaron a Minera Utah de
Chile Inc. como ejecutora del proyecto.

El 14 de marzo de 1981, el último sondaje programado en la campaña de exploración, interceptó

un yacimiento de mineral de cobre comercialmente explotable que luego se transformaría en la
mina Escondida.

De esa fecha en adelante, la estructura de propiedad de Minera Escondida Limitada ha sufrido

las siguientes modificaciones:

 17 de octubre de 1985: se modificaron los estatutos de la Compañía cuando Getty

Mining (Chile) Inc. vendió la totalidad de sus derechos (50%) a Japan Escondida
Corporation (JECO), RTZ Escondida Holdings Limited y Minera Utah de Chile Inc.

 17 de marzo de 1988: Minera Utah de Chile Inc., RTZ Escondida Holdings Limited y
JECO transfirieron sus respectivos derechos a BHP Escondida Inc. (originalmente BHP-
Utah Escondida Inc.), a Río Tinto Escondida Limited (previamente RTZ Escondida
Limited) y a JECO Corporation.

 27 de julio de 1988: BHP Escondida Inc. cedió el 2,5% de sus derechos a la Corporación
Financiera Internacional (IFC).

 15 de octubre de 2002: Minera Escondida Limitada se fusionó con Sociedad Contractual

Minera Escondida, incorporando a su patrimonio las concesiones mineras que amparan
el yacimiento Escondida.
 Confidential

 26 de mayo de 2010: La Corporación Financiera Internacional (IFC) vendió sus

derechos a JECO 2 LTD., una sociedad constituida bajo las leyes del Reino Unido.

Desde el punto de vista operacional, la historia de Escondida se ha caracterizado por un

permanente crecimiento a partir de su puesta en marcha en 1990. La capacidad de producción
anual aumentó desde 320.000 toneladas de cobre fino en el año 1990 a más de 1.400.000
toneladas el 2007, manteniéndose a partir de entonces en un volumen superior a un millón de
toneladas de cobre fino al año.

Durante 2015 Escondida concluyó la construcción de su tercera planta concentradora – Laguna

Seca línea 2 – que demandó una inversión aproximada de US$4.300 millones, la que comenzó
a operar a plena capacidad en 2016.

En junio de 2016 fue aprobado el proyecto Escondida Los Colorados Extension – LCE – con un
costo aproximado de US$180 millones, que ha permitido aumentar la capacidad de
procesamiento en aproximadamente 100.000 toneladas por día, entregando su primera
producción durante septiembre de 2017.

Durante 2017 se comisionó la segunda planta desalinizadora de agua de mar – EWS – en

Puerto Coloso, al sur de Antofagasta, que demandó una inversión aproximada de US$3.400
millones. Con una capacidad de 2.500 litros por segundo, esta unidad se suma a la que ya
opera en el mismo lugar desde 2006 de 525 litros por segundo, permitiendo a Escondida
satisfacer sus crecientes requerimientos de agua y minimizar el uso de acuíferos

Posteriormente en el año 2020 Escondida comenzó a operar 100% con agua desalinizada. Tras
la decisión de cesar la extracción desde acuíferos alto andinos, Escondida comenzó a ser
abastecida en su totalidad por agua desalinizada.

En octubre 2019, BHP anuncia cuatro nuevos contratos de abastecimiento de energía

renovable para Escondida y Spence que reemplazaran los contratos actuales. Estos contratos
son de gran valor y desplazarán efectivamente 3 Mt CO2-e por año desde el año financiero
2022 además de incrementar la flexibilidad de nuestro portafolio de energía y asegurar el
abastecimiento necesario de nuestras operaciones.

Durante 2021, un año aún marcado por la crisis sanitaria, Escondida mantuvo la continuidad
operacional, tomando todas las acciones necesarias para resguardar la seguridad y salud de
sus trabajadores.
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VII. FACTORES DE RIESGO

Riesgo de Mercado

El riesgo de mercado es la exposición a los cambios en los precios de mercado, tales como las
tasas de interés de mercado, los precios de los commodities y las tasas de cambio de moneda
extranjera que afecten los ingresos de la Compañía o el valor de los instrumentos financieros
que mantiene.

El objetivo de la administración de riesgo de mercado es gestionar y controlar las exposiciones

al riesgo de mercado dentro de parámetros aceptables, mientras se optimiza el retorno.

La Compañía está expuesta a los ciclos de la economía mundial y sus efectos en el precio del
cobre, así como a las fluctuaciones de precios en ciertos insumos necesarios para la operación
(petróleo, energía, acero y productos químicos).

La principal responsabilidad para la identificación y control de los riesgos financieros,

incluyendo la autorización y monitoreo del uso de instrumentos financieros para las actividades
antes señaladas y para estipular la política del mismo recae en el Comité de Gestión de Riesgos
Financieros bajo la autoridad delegada por el Comité de Gestión del Grupo BHP.

Riesgo de tasa de interés

Escondida está expuesta al riesgo de tasa de interés sobre sus préstamos pendientes de pago,
debido a la posibilidad de que los cambios en las tasas de interés afecten los flujos de caja
futuros o el valor razonable de la tasa de interés variable.

Riesgo moneda extranjera

El dólar estadounidense es la moneda funcional de la Compañía y como resultado, el riesgo

surge de las exposiciones de moneda extranjera debido a las transacciones y saldos en
monedas distintas al dólar estadounidense. Las posibles exposiciones a moneda extranjera de
la Compañía incluyen la exposición transaccional en relación a partidas monetarias de monedas
no funcionales.

El riesgo de tipo de cambio de moneda extranjera es gestionado como parte de la estrategia de

gestión de riesgos dentro del límite general de flujo de caja en riesgo (CFaR).

Riesgo al precio de los commodities

Los contratos por la venta de commodities se celebran en lo posible sobre una base de precio
para lograr un índice objetivo relevante. En los casos en que las condiciones de precio de los
contratos se desvían de dicho índice, se utilizan los contratos derivados de commodities,
cuando están disponibles, para retornar los precios realizados al índice objetivo relevante.

Riesgo de Liquidez

El riesgo de liquidez es el riesgo de que la Compañía tenga dificultades para cumplir con sus
obligaciones asociadas con los pasivos financieros que son liquidados mediante la entrega de
efectivo u otros activos financieros. El enfoque de la Compañía para administrar la liquidez es
asegurar, en la mayor medida posible, que siempre contará con la liquidez suficiente para
cumplir con sus obligaciones al vencimiento, tanto en condiciones normales o bajo condiciones
más exigentes, sin incurrir en pérdidas no aceptables o arriesgar su reputación.
 Confidential

La Compañía posee un fuerte perfil de crédito y fuentes de financiamiento diversificadas, lo que

asegura que se mantengan suficientes fondos líquidos para satisfacer sus necesidades diarias
de efectivo. La política de la empresa sobre la exposición al crédito de las contrapartes asegura
que se usen solamente contrapartes que cuentan con una alta calificación crediticia para la
inversión del exceso de efectivo.

Riesgo Crediticio

El riesgo crediticio es el riesgo de pérdida financiera que enfrenta la Compañía si un cliente o

contraparte en un instrumento financiero no cumple con sus obligaciones contractuales, y
proviene principalmente de los deudores comerciales de la Compañía.

Para gestionar el riesgo de crédito, la empresa mantiene políticas y procedimientos a lo largo

del grupo BHP que abarcan las solicitudes de aprobaciones de crédito, el otorgamiento y la
renovación de límites de las contrapartes y el monitoreo de las exposiciones de estos límites.

VIII. POLÍTICAS DE INVERSIÓN Y FINANCIAMIENTO

La Política de Inversión y Financiamiento establece que las utilidades generadas en cada

ejercicio sean utilizadas para cubrir las necesidades de caja y que el remanente se destine a
amortizar los créditos contratados, dando cumplimiento a los resguardos financieros
establecidos en los contratos de crédito y a la distribución de dividendos a los propietarios.

Las inversiones durante el año 2022 totalizaron US$668 millones de Dólares de los Estados
Unidos de América compuestas principalmente por compras de activos fijos. Estas
adquisiciones fueron financiadas con una mezcla de fuentes de financiamiento externo y
recursos propios.

IX. INFORMACION SOBRE HECHOS RELEVANTES O ESENCIALES

Hechos relevantes o esenciales durante el calendario 2022

La producción de cobre de Escondida en el periodo enero-diciembre de 2022 alcanzó un total de 1.026

mil toneladas, compuestas por 823 mil toneladas de cobre pagable en concentrados y 203 mil toneladas
de cátodos de cobre. La cifra es un 4.28% superior a la del mismo período del año 2021, cuando la
producción fue de 984,3 mil toneladas, principalmente debido a un aumento esperado en la ley del
mineral y a una mayor cantidad de mineral alimentado a las plantas concentradoras.

Los ingresos ordinarios asociados a ventas sumaron US$ 8.761 millones, lo que representó una
disminución de un 10% en comparación al mismo periodo del año 2021. Esto se debió principalmente
al menor precio del cobre.

Entre enero y diciembre del presente año Minera Escondida contabilizó impuestos a la renta e impuesto
específico minero por un total de US$ 1.257 millones, un 28% menos que en similar período del año
2021. Esta disminución en los impuestos se debe principalmente a un menor resultado operacional
debido principalmente al menor precio del cobre. A ello se añade el pago de US$ 297 millones en
impuestos por distribución de dividendos.

La ganancia neta del periodo, en consecuencia, fue de US$ 2.897 millones, un 21,75% inferior a la
obtenida en igual período de 2021.
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X. POLITICA DE DISTRIBUCION DE UTILIDADES

La política de dividendos es analizada por la administración de acuerdo con las rentabilidades

de los períodos y las necesidades de caja de la administración. Estas necesidades son
fuertemente impactadas por los proyectos de capital que tiene la Compañía, deudas normales
con acreedores e impuestos. Además, se deben tomar las precauciones ante una posible baja
en el precio de los commodities.

XI. ESTADOS FINANCIEROS ANUALES

Los estados financieros anuales han sido preparados en base al principio de costo histórico de
acuerdo con normas internacionales de información financieras (NIIF) e incluyen Estados de
Resultados Integrales, Estados de Situación Financiera Clasificado, Estados de Flujos de
Efectivo, Estados de Cambios en el Patrimonio General y Notas Explicativas a los Estados
Financieros.

Los estados financieros anuales al 31 de diciembre del 2022 han sido auditados por la firma de
auditoría Ernst & Young (EY), y se adjuntan a este documento a continuación.
 Internal

Santiago, Mayo 19 de 2023

Señor

Solange Berstein

Presidente de la Comisión para el Mercado Financiero

Presente

Ref.: Envía Memoria Anual 2022, en cumplimiento a lo establecido en el artículo 11 Ter del D.L.
600 de 1974

De nuestra consideración,

En cumplimiento a lo establecido en el artículo 11 Ter del Decreto Ley N°600 del año 1974, sírvase
encontrar adjunta copia de la Memoria Anual 2022 de Minera Escondida Limitada, la cual incluye
detalladamente lo siguiente:

1. Declaración Jurada de veracidad de la información incorporada

2. Memoria Anual que incluye Estados Financieros e informe del auditor independiente.

Muy cordialmente,

James Whittaker

Presidente

Minera Escondida Limitada

 Internal

Razón Social : Minera Escondida Limitada

Rut : 79.587.210-8

Dirección : Cerro El Plomo 6000 Piso 15, Las Condes, Santiago

Período : 12 / 2022

DECLARACIÓN JURADA DE RESPONSABILIDAD

En conformidad a lo establecido por la Resolución N°549 de fecha 23 de septiembre de 2005,

modificada por Resolución N°039 de fecha 03 de febrero de 2006, ambas dictadas por la Comisión
para el Mercado Financiero (CMF), el Representante Legal abajo firmante declara bajo juramento
nuestra responsabilidad por la veracidad de toda la información incorporada en la Memoria Anual que
incluye los Estados Financieros auditados e informes de los Auditores Independientes, que dan cuenta
de la situación financiera y económica de nuestra representada Minera Escondida Limitada, por el año
terminado el 31 de Diciembre de 2022 y 2021.

James Whittaker

Presidente

Minera Escondida Limitada

Santiago, Mayo 19 de 2023

Consolidated Financial Statements

MINERA ESCONDIDA LTDA.

Santiago, Chile
As of December 31, 2022 and 2021
Consolidated
Financial Statements
Minera Escondida Ltda.
Santiago,Chile
AsofDecember31,
2022and2021
 EY Chile Tel: +56 (2) 2676 1000
Avda. Presidente www.eychile.cl
Riesco 5435, piso 4,
Las Condes, Santiago

Report of the Independent Auditor

To Members
Minera Escondida Limitada

We have audited the accompanying consolidated financial statements of Minera Escondida Limitada
and Subsidiaries, which comprise the consolidated statement of financial position as of December
31, 2022 and 2021, and the related consolidated statements of comprehensive income, the
statements of changes in equity and of cash flows for the years then ended and the related notes to
the consolidated financial statements.

Management's Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial
statements in conformity with International Financial Reporting Standards. This responsibility
includes the design, implementation and maintenance of internal control relevant to the preparation
and fair presentation of consolidated financial statements that are free of material misstatement,
whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our
audit. We conducted our audit in accordance with Generally Accepted Auditing Standards in Chile.
Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the consolidated financial statements are free of material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the consolidated financial statements. The procedures selected depend on the auditor's judgment,
including the assessment of the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers
internal control relevant to the entity's preparation and fair presentation of the consolidated financial
statements in order to design audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the entity's internal control.
Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of significant accounting estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the financial position of Minera Escondida Limitada and Subsidiaries as of December 31,
2022 and 2021, and the results of its operations and its cash flows for the years then ended in
accordance with International Financial Reporting Standards.

Santiago, Chile
April 28, 2023
Contents

Consolidated Financial Statements of Profit or Loss and Other Comprehensive Income,

Consolidated Financial Statement of Financial Position,
Consolidated Financial Statement of Cash Flows, indirect method
Consolidated Financial Statement of Changes in Shareholders’ Equity,
Notes to the Consolidated Financial Statements

US$’000 or Thus$ : Thousands of United States dollars

Ch$ : Chilean pesos
 Table
of contents

Consolidated Statements of Profit or Loss and Other Comprehensive income 5

Consolidated Statement of Financial Position 6
Consolidated Statement of Cash Flows, Indirect Method 7
Consolidated Statement of Changes in Shareholders´ Equity 8
Notes to the Consolidated Financial Statements 9
1. Reporting entity 9
2. Accounting policies 9
2.1 Basis of preparation 9
2.2 Significant accounting policies 11
2.3 New and Amended Accounting Standards and interpretations 16
3. Revenue 17
4. Other income 17
5. Expenses, excluding net finance costs 18
6. Net finance costs 18
7. Income tax expense and deferred taxes 19
8. Trade and other receivables 20
9. Receivables and payables due to/from related parties 21
10. Transactions with related parties 22
11. Inventories 23
12. Property, plant and equipment 23
13. Trade and other payables 24
14. Interest-bearing liabilities 25
15. Provisions 26
16. Equity 28
17. Contingencies 29
18. Commitments 29
19. Cash and cash equivalents 30
20. Financial Risk Management 31
21. Other financial liabilities 36
22. Compensation of key management personnel 36
23. Guarantees 36
24. Subsequent events 36
Consolidated Financial Statements

MINERA ESCONDIDA LTDA.

As of December 31, 2022 and 2021

 Consolidated Statements of Profit or Loss and Other Comprehensive Income

Notes 2022 2021

US$’000 US$’000
Revenue 3 8,761,054 9,782,886
Expenses excluding net finance expenses 5 (4,429,531) (4,244,588)
Profit from operations 4,331,523 5,538,298

Other income 4 29,534 52,262
Total other income and expenses 29,534 52,262

Finance expenses 6 (210,303) (138,032)
Finance income 6 3,607 967
Net finance expenses (206,696) (137,065)
Profit before taxes 4,154,361 5,453,495

Income tax expenses (1,059,292) (1,481,694)
Royalty-related taxation (net of income tax benefit) (197,735) (269,364)
Total taxation expense 7a (1,257,027) (1,751,058)
Profit after taxes 2,897,334 3,702,437
Other comprehensive income:
Gains taken to equity including actuarial losses 16,673 40,055
Related tax (5,369) (12,818)
Other comprehensive income 11,304 27,237
Total comprehensive income 2,908,638 3,729,674
The accompanying notes are an integral part of these consolidated financial statements.

Financial Statements 5
 Consolidated Statement of Financial Position

Notes 2022 2021

US$’000 US$’000
Assets
Current assets
Cash and cash equivalents 19 385,994 871,155
Trade and other receivables 8 1,136,533 900,155
Trade and other receivables due from related parties 9 9,013 23,863
Inventories 11 994,229 924,061
Other 69,046 60,782
Total current assets 2,594,815 2,780,016
Non-current assets
Trade and other receivables 8 32,981 35,328
Inventories 11 674,564 581,718
Property, plant and equipment 12 10,835,653 10,610,074
Intangible assets 43,339 16,195
Right of use assets 12 367,104 385,792
Total non-current assets 11,953,641 11,629,107
Total assets 14,548,456 14,409,123

Liabilities
Current liabilities
Trade and other payables 13 671,312 413,311
Trade and other payables due to related parties 9 124,011 146,572
Interest bearing liabilities 14 271,244 479,632
Other financial liabilities 21 69,871 68,425
Provisions 15 75,650 95,321
Provision for mine closure and site restoration 15 48,506 21,031
Deferred income - 9,850
Current tax liabilities 7d 57,413 743,201
Total current liabilities 1,318,007 1,977,343
Non-current liabilities
Trade and other payables 13 179 276
Trade and other payables due to related parties 9 - 45,833
Interest bearing liabilities 14 2,627,417 2,159,555
Other financial liabilities 21 434,674 498,721
Deferred tax liabilities 7c 1,325,904 1,317,706
Provisions 15 112,411 111,321
Provision for mine closure and site restoration 15 712,213 487,804
Deferred income 9,449 -
Total non-current liabilities 5,222,247 4,621,216
Total liabilities 6,540,254 6,598,559
Net assets 8,008,202 7,810,564

Equity
Paid-in capital 16 931,242 931,242
Reserves 3,131 (8,173)
Retained earnings 7,073,829 6,887,495
Total Equity 8,008,202 7,810,564

The accompanying notes are an integral part of these consolidated financial statements.

6 Financial Statements
 Consolidated Statement of Cash Flows

Indirect method Notes 2022 2021

US$’000 US$’000
Operations activities
Profit before taxes 4,154,361 5,453,495
Adjustment for:
Depreciation and amortisation expense 5 867,172 933,222
Impairment of property, plant and equipment, financial assets and intangibles 5 - 1,596
Net finance costs 6 206,696 137,065
Other 227,194 236,770
Changes in assets and liabilities:
Trade and other receivables (234,056) (84,448)
Inventories (163,014) 30,317
Trade and other payables 238,788 (1,842)
Provisions and other assets and liabilities (87,525) (110,183)
Cash generated from operations 5,209,616 6,595,992
Interest received 3,632 955
Interest paid (135,833) (116,020)
Income tax refunded 5 36,935
Income tax paid (1,529,282) (1,178,058)
Taxes paid - royalty (specific tax on the mining activity) (410,708) (169,537)
Subtotal (2,072,186) (1,425,725)
Net operating cash flows generated from operations 3,137,430 5,170,267
Investing activities
Purchases of property, plant and equipment (1,045,609) (757,224)
Net investing cash flows used in investment activities (1,045,609) (757,224)
Financing activities
Proceed from debt drawdowns 1,200,000 586,214
Repayment of interest bearing liabilities (1,075,454) (659,974)
Dividends paid 16 (2,711,000) (4,580,000)
Net financing cash flows used in financing activities (2,586,454) (4,653,760)
Total net decrease in cash and cash equivalents (494,633) (240,717)
Cash and cash equivalents at the beginning of the period 871,155 1,109,128
Foreign currency exchange rate changes on cash and cash equivalents 9,472 2,744
Cash and cash equivalents at the end of the period 19 385,994 871,155
The accompanying notes are an integral part of these consolidated financial statements.

Financial Statements 7
 Consolidated Statement of Changes in Shareholder’s Equity

US$’000 Note Share Reserves Retained Total

capital earnings equity

Balance as at 1 January 2022 16 931,242 (8,173) 6,887,495 7,810,564

Other comprehensive income - 11,304 - 11,304
Profit for the year - - 2,897,334 2,897,334
Total comprehensive income 11,304 2,897,334 2,908,638
Transaction with Shareholders: -
Dividends 16 - - (2,711,000) (2,711,000)
Balance as of December 31,2022 16 931,242 3,131 7,073,829 8,008,202

Balance as at 1 January 2021 16 931,242 (35,410) 7,765,058 8,660,890

Other comprehensive income - 27,237 - 27,237
Profit for the year - - 3,702,437 3,702,437
Total comprehensive income - 27,237 3,702,437 3,729,674
Transaction with Shareholders:
Dividends 16 - - (4,580,000) (4,580,000)
Balance as of December 31,2021 16 931,242 (8,173) 6,887,495 7,810,564

The accompanying notes are an integral part of these consolidated financial statements.

8 Financial Statements
 Notes to the Condensed Consolidated Interim Financial Statements

1. Reporting entity These consolidated financial statements fairly reflect the

Minera Escondida Limitada (the “Company” or “Escondida”) Group’s financial position as of December 31, 2022 and 2021,
is registered with the Registry of Entities Subject to Specific and the results of its operations, changes in shareholders’
Tax on the Mining Activity of the Financial Market Commission equity and cash flows for the years ended December 31, 2022
(CMF), in conformity with Exempt Resolution No. 618 of this and 2021.
Superintendence, which cancelled the registration with the
Registry of Reporting Entities on December 15, 2011. The information contained in these consolidated financial
statements is the responsibility of the Group’s Management,
The Company was incorporated through a public deed on who expressly indicate an explicit and unreserved statement
August 14, 1985 as a limited liability partnership. Its legal of compliance with all principles and criteria included in IFRS.
address is located at Cerro El Plomo N°6000, 18th floor in the The financial statements have been authorised by the Group’s
city of Las Condes, Santiago, Chile and has the Taxpayer ID President on April 28, 2023.
No. 79.587.210-8.
(b) Basis of consolidation
The Company is a mining company operated by BHP and Subsidiaries are entities controlled by the Company. An entity
is engaged in the exploration, extraction, processing and controls another entity when it is exposed to or has rights to
marketing of mineral resources. The Company is currently variable returns from its involvement with the entity and has
exploiting two pits of copper ore bodies located in the the ability to affect those returns through its power over the
Second Region of the Republic of Chile, 170 kilometres entity. The financial statements of subsidiaries are included in
southeast of the city of Antofagasta at an altitude of 3,100 the consolidated financial statements from the date on which
meters above sea level. The Company produces copper control commences until the date on which control ceases.
concentrates and copper cathodes through its open-pit
mining operation and cathode and concentrates treatment Set out below is a list of entities forming part of the
plants at the mine site. Concentrate also includes gold and consolidated group:
silver. Concentrate is transported by pipeline to the port
facility in Coloso, near Antofagasta where it is filtered and Company Taxpayer Country Ownership
shipped to customers. Copper cathodes are produced at ID No. %
an oxide and sulphide plant, a heap leaching and electro
Minera Escondida 79.587.210-8 Chile 100
winning facility, located at the mine site. Copper cathodes
are transported by rail to the port of Antofagasta for shipment Limitada (Parent)
to customers.
Fundación Minera 73.297.300-1 Chile 100
As of December 31, 2022 and 2021, the shareholders are as Escondida
follows:
Direct Owner Ultimate Parent Ownership Ownership Fundación 74.191.400-K Chile 100
Entity % % Educacional
2022 2021 Escondida y filial
BHP Escondida Inc. BHP Limited 57.5 57.5
Rio Tinto Escondida Rio Tinto PLC 30 30 Kelti S.A 76.454.918-K Chile 99.99
Limited
JECO Corporation Mitsubishi 10 10
Corporation 70%, (c) Basis measurement
JX Nippon Mining & The consolidated financial statements have been prepared
Metals Corporation on the historical cost basis except for the valuation of
20%, Mitsubishi certain financial assets and liabilities (including derivative
Material Corporation instruments), which are measured at fair value.
10%
Mitsubishi (d) Functional and presentation currency
JECO 2 Ltd. 2.5 2.5
Corporation 50%, These financial statements are presented in USD, which is
JX Nippon Mining & the Group’s functional currency. All financial information
Metals presented in USD has been rounded to the nearest thousand
Corporation 40%, dollars. The Group maintains accounting records in USD as
Mitsubishi Material authorised by the Group’s Foreign Investment Contract with
Corporation 10% the Chilean government. Transactions in other currencies
are recorded at actual rates of the transaction date. Year-
Total 100 100
end balances for monetary items in foreign currencies are
translated into USD at the applicable closing exchange rate.

2. Accounting policies (e) Use of estimates and judgements

The preparation of consolidated financial statements in
2.1 Basis of preparation accordance with IFRS requires management to make a
(a) Statement of compliance number of estimates and judgments relating to the reported
These consolidated financial statements are presented assets and liabilities, the disclosure of contingent assets and
in thousands of United States dollars (USD) which is liabilities and the reported amounts of revenues and expenses
the Company’s functional currency, in accordance with during the period. Actual results could differ from those
International Financial Reporting Standards (“IFRS”) issued estimates under different assumptions and conditions. This
by the International Accounting Standards Board (“IASB”). may materially affect financial results and the carrying amount
These consolidated financial statements comprise the of assets and liabilities to be reported in the next and future
Company and its subsidiaries, collectively referred to as the periods. The key areas of estimates and judgments are as
Group. follows:

Financial Statements 9
 i. The capitalisation of property, plant and equipment and values, for dismantling and rehabilitation costs when an
project costs obligation arises after the development or during production
Mineral property development costs are capitalised as part of a mining property. The provision is based on a closure
of property, plant and equipment in the period in which they plan prepared with the assistance of external advisors.
are incurred, to the extent that the project is considered to Management uses its best estimate to determine and amortise
be economically viable. Management reviews capitalised such estimated costs over the life of the mine (for capitalised
amounts to ensure that the treatment of such expenditure dismantling costs). Final dismantling and rehabilitation costs
is reasonable, in particular, with respect to each project’s are uncertain and cost estimates may change as a result of
commercial viability. many factors, including changes in legal requirements, the
development of new restoration techniques or experience in
A project is typically considered to be commercially viable other mine sites.
when it has completed its pre-viability study and the
commencement of a viability stage has been approved. The expected timing and extension of expenses may also
change; e.g., as a result of changes in reserves or mineral
ii. Useful lives of property, plant and equipment and mineral processing levels. Consequently, there might be significant
reserve estimates adjustments to the provisions established that may affect
Mining property, including capitalised finance costs, are future financial performance.
depreciated proportionally to the volume of copper extracted
during the period, compared with total proven reserves and v. Deferred taxes
probable reserves at the beginning of the fiscal year. Several Judgment is also required in assessing whether deferred tax
inherent uncertainties exist when estimating ore reserves and assets are recognised in the statement of financial position.
applicable assumptions may change when new information Deferred tax assets, including those arising from un-recouped
becomes available. tax losses, capital losses and temporary differences, are
recognised only where it is considered more likely than
This includes assumptions on ore grade estimates and not that they will be recovered, which is dependent on the
cut-off grade, recovery rates, commodity prices, exchange generation of sufficient future taxable profits. Assumptions
rates, production costs, capital investments, processing and about the generation of future taxable profits depend on
rehabilitation costs and discount rates. management’s estimates of future cash flows. These depend
on estimates of future production and sales volumes,
Reserve estimates may change from period to period because commodity prices, reserves, operating costs, closure and
economic assumptions used to estimate reserves may change rehabilitation costs, capital expenditure, dividends and
and as additional geological data is generated during the other capital management transactions. Judgments are also
course of operations. Changes in reported reserves may affect required about the application of income tax legislation
the Group’s financial performance and financial position in a and its interaction with income tax accounting principles.
number of ways, including the following: These judgments and assumptions are subject to risk and
uncertainty, hence there is a possibility that changes in
• Recoverable amounts of assets may be affected by changes circumstances will alter expectations, which may impact
in estimated future cash flows. the amount of deferred tax assets and deferred tax liabilities
• Depreciation and amortisation expense recognised for the recognised on the balance sheet and the amount of other
period may change due to changes recognised on units of tax losses and temporary differences not yet recognised. In
production basis or when the useful lives of assets change. such circumstances, some or all of the carrying amount of
• Stripping costs capitalised in the statement of financial recognised deferred tax assets and liabilities may require
position or recognised in the statement of profit or loss and adjustment, resulting in a corresponding credit or charge
other comprehensive income may change due to changes to the statement of profit or loss and other comprehensive
in the stripping cost ratios or units of production that are income.
the basis for depreciation.
• The provision for restoration and rehabilitation may change vi. Basis of Copper Price Estimates
where changes in estimated reserves affects expectations Inventory net realisable value adjustments are calculated
on the period of rehabilitation or cost of such activities. based on the estimated selling price less the estimated costs
• The carrying amount of deferred tax assets may change due of completion and sale. Any write-down of inventories to net
to changes in estimates of the probability of utilising tax realisable value is recognised as an expense in the period in
benefits. which the write-down occurs.

iii. Impairment of assets In addition, for certain purchase and sales contracts, the
The Group reviews the carrying amount of property, plant contract price is determined on a provisional basis at the date
and equipment to determine whether there is objective of sale/purchase and adjustments to the sale/purchase price
evidence that such assets may be impaired. This requires subsequently occur based on movements in quoted market or
determination of the recoverable amount of the relevant contractual prices up to the date of final pricing.
asset. In determining the recoverable amount of assets, in Estimated copper price used for the inventory net realisable
the absence of quoted market prices, estimates are made value assessment and for provisional pricing adjustments
regarding the present value of future post-tax cash flows. are based on an estimated forward price curve. This forward
These estimates require significant management judgement curve is based on the forecasted market price from the last
and are subject to risk and uncertainty that may be beyond day of the month.
the control of the Group; hence, there is a possibility that
changes in circumstances will materially alter projections, Subsequent changes to the market price on eventual sale of
which may impact the recoverable amount of assets at each inventory or finalisation of provisionally priced contracts will
reporting date. The estimates are made from the perspective affect the adjustment recognised.
of a market participant and include prices, future production
volumes, operating costs, tax attributes and discount rates. vii. Copper leach inventories
The valuation of inventory work in progress for the leaching
iv. Provisions for restoration and rehabilitation costs process requires the estimation of recoverable copper. This
The Group establishes a provision, based on the net present estimation involves determining volumes to be recovered

10 Financial Statements
2.1 Basis of preparation continued c) Leases
(e) Use of estimates and judgements continued The Group assesses at contract inception, all arrangements to
determine whether they are, or contain, a lease. That is, if the
from accumulations of mined ore and the period of recovery. contract conveys the right to control the use of an identified
This estimate is calculated by engineers using available asset for a period of time in exchange for consideration. The
industry, engineering and scientific data. Group is not a lessor in any transactions, it is only a lessee.

Actual volumes of copper recovered during the leaching (a) Group as a lessee
process may therefore differ from the estimated copper The Group applies a single recognition and measurement
recovery used in the valuation of inventory work in progress. approach for all leases, except for short-term leases and
In addition, any subsequent changes to the methods used in leases of low-value assets. The Group recognises lease
extracting copper through the leaching process may affect liabilities to make lease payments and right-of-use assets
the copper recovery assumptions resulting in a change in the representing the right to use the underlying assets.
inventory work in progress volumes and weighted average
unit costs. (i) Right-of-use assets
The Group recognises right-of-use assets at the
2.2 Significant accounting policies commencement date of the lease (i.e., the date when the
The accounting policies set out below have been consistently underlying asset is available for use). Right-of-use assets are
applied to all the periods presented in these consolidated measured at cost, less any accumulated depreciation and
financial statements. impairment losses, and adjusted for any re-measurement
of lease liabilities. The cost of right-of-use assets includes
(a) Inventories the amount of lease liabilities recognised, initial direct
Inventories – raw materials for production (including stockpile costs incurred, and lease payments made at or before the
inventory), copper concentrate and copper cathodes are commencement date less any lease incentives received.
valued at the lower of cost and net realisable value. Mining Right-of-use assets are depreciated on a straight-line basis
and milling costs and non-cash costs are included in the over the shorter of the lease term and the estimated useful
value of inventories, as well as the allocated costs of central lives of the assets, as follows:
maintenance and engineering and the on-site general and
administrative costs including all essential infrastructure • Mining equipment 3 to 7 years
support. • Motor vehicles and buildings 3 to 5 years
• Kellar energy plant 15 years
Stockpile costs are determined using the weighted average
cost method. (ii) Leases liabilities
At the commencement date of the lease, the Group
Materials and supplies are also valued at the lower of average recognises lease liabilities measured at the present value of
cost and estimated net realisable value. lease payments to be made over the lease term. The lease
payments include fixed payments (and, in some instances,
Net realisable value is the estimated selling price in the in-substance fixed payments) less any lease incentives
ordinary course of business, less estimated completion and receivable, variable lease payments that depend on an
selling expenses. index or a rate, and amounts expected to be paid under
residual value guarantees. The lease payments also include
Inventories classified as non-current consist of warehouse and the exercise price of a purchase option reasonably certain
inventory in the sulphide leach pad that are not expected to be to be exercised by the Group and payments of penalties for
utilised or sold within 12 months after the reporting date. terminating the lease, if the lease term reflects the Group
exercising the option to terminate. Variable lease payments
(b) Property, plant and equipment that do not depend on an index or a rate are recognised as
Items of property, plant and equipment are recorded at cost expenses (unless they are incurred to produce inventories) in
less accumulated depreciation and accumulated impairment the period in which the event or condition that triggers the
charges. Cost includes expenditures that are directly payment occurs.
attributable to the acquisition of the asset and capitalised
interest incurred during the construction and development In calculating the present value of lease payments, the
period and during subsequent expansion periods. Group uses its incremental borrowing rate at the lease
commencement date because the interest rate implicit in
The cost of self-constructed assets includes the cost of the lease is generally not readily determinable. After the
materials and direct labour and any other costs directly commencement date, the amount of lease liabilities is
attributable to bringing the assets to a working condition for increased to reflect the accretion of interest and reduced for
their intended use by management, the costs of dismantling the lease payments made. In addition, the carrying amount
and removing the items and restoring the site on which they of lease liabilities is re-measured if there is a modification,
are located and interest on borrowing costs for qualifying a change in the lease term, a change in the lease payments
assets are also included. When parts of an item of property, (e.g., changes to future payments resulting from a change
plant and equipment have different useful lives, they are in an index or rate used to determine such lease payments)
accounted for as separate items (major components) of or a change in the assessment of an option to purchase the
property, plant and equipment. underlying asset.

Gains and losses on disposal of an item of property, plant (iii) Short-term leases and low values leases
and equipment are determined by comparing the proceeds The Group applies the short-term lease recognition
from disposal with the carrying amount of property, plant and exemption to its short-term leases of equipment (i.e., those
equipment, and are recognised net within “other income” leases that have a lease term of 12 months or less from the
in the statement of profit or loss and other comprehensive commencement date and do not contain a purchase option).
income. It also applies the lease of low-value assets recognition
exemption to leases of office equipment that are considered
to be low value. Lease payments on short-term leases and

Financial Statements 11
 leases of low-value assets are recognised as expense on a approach’ to all other financial assets. The general approach
straight-line basis over the lease term. incorporates a review for any significant increase in
counterparty credit risk since inception. The review includes
d) Depreciation assumptions about the risk of default and expected loss rates.
The carrying amounts of property, plant and equipment For trade receivables, the assessment takes into account the
(including initial and any subsequent capital expenditure) use of credit enhancements, for example, letters of credit.
are depreciated to their estimated residual value over the
estimated useful lives of the specific assets concerned, or the In calculating the provision the Group uses historical trends
estimated life of the associated mine. Estimates of residual of the probability of default, timing of recoveries and
values and useful lives are reassessed annually and any the amount of loss incurred, adjusted for management’s
change in estimate is taken into account in the determination judgment as to whether current economic and credit
of remaining depreciation charges. Depreciation commences conditions are such that the actual losses are likely to be
on the date of commissioning for those assets that are greater or less than suggested by historical trends.
depreciated on a units of production basis; while for those
assets that apply the straight-line method of depreciation, A provision with respect to a financial asset measured at
depreciation commences when they are available for use. amortised cost is calculated as the difference between its
carrying amount and the present value of the estimated
Plant and equipment that in general have a useful life of less future cash flows discounted at the effective interest rate.
than 12 years or that are depreciated on a straight- line basis Losses are recognised in profit or loss and presented in
can be depreciated over their respective useful lives. Plant an allowance account against receivables. Interest on the
and equipment that have a useful life greater than 12 years are impaired asset continues to be recognised through the
depreciated on a units of production basis over the useful life unwinding of the discount. When a subsequent event causes
of proven and probable mineral reserves. the amount of impairment loss to decrease, the decrease in
impairment loss is reversed through profit or loss.
Mine development is depreciated on a units-of-production
basis over the life of the proven and probable mineral ii) Non-financial assets
reserves. Land is not subject to depreciation. The carrying amounts of the Group’s non-financial assets,
other than inventories and deferred tax assets are reviewed at
Changes in estimates are accounted for over the estimated least annually to determine whether there is any indication of
remaining economic life or the remaining commercial impairment. If any indication of impairment exists, the asset’s
reserves of the mine as applicable. recoverable amount is estimated. If the carrying amount
of the asset exceeds its recoverable amount, the asset is
Total depreciation and amortisation for the years ended impaired and an impairment loss is charged to the income
December 31, 2022 and 2021 is included as a cost of the statement so as to reduce the carrying amount in the balance
production of inventories. sheet to its recoverable amount.

Expenditures for replacements and improvements are The Group conducts an internal review of asset values which
capitalised when the asset’s standard of performance is is used as a source of information to assess whether there
significantly enhanced or the expenditure represents a are any indicators of impairment. External factors such as
replacement of a component of an overall tangible fixed asset changes in expected future processes, commodity prices,
that has been separately depreciated. costs and other market factors are also monitored to assess
for indicators of impairment.
The major categories of property, plant and equipment are
depreciated on a unit of production and/or straight-line basis The recoverable amount is the greater of its value in use and
using estimated lives indicated below: its fair value less direct costs to sell.
Categories Useful life The fair value is determined as the amount that would
Building 10-25 years be obtained from the sale of the asset in an arm’s length
Plant and equipment Up to 12 years; useful life transaction between knowledgeable and willing parties.
greater than 12 is based Fair value for mineral assets is generally determined as the
on reserves on a units of present value of the estimated future cash flows expected
production basis to arise from the continued use of the asset, including
any expansion projects, and its eventual disposal, using
Land Not depreciated
assumptions that an independent market participant may take
Capitalised exploration, evaluation Based on applicable mineral into account.
and development expenditure reserves on a unit of
production basis These cash flows are discounted by an appropriate post-tax
Overburden removal costs Based on applicable discount rate to arrive at a net present value of the asset.
mineral reserves on a unit
of production basis of the Value in use is determined as the present value of the
estimated future cash flows expected to arise from the
relevant item
continued use of the asset by the Group in its present form
and its eventual disposal. Value in use (VIU) is determined by
e) Impairment of assets applying assumptions specific to the Group’s continued use
i) Financial assets (including receivables) and does not take into account future development. These
A provision for expected credit losses is recognised for all assumptions are different to those used in calculating fair
financial assets held at amortised cost, loan commitments and value less cost of disposal (FVLCD) and consequently the VIU
financial guarantees not measured at fair value through profit calculation is likely to give a different result (usually lower) to
or loss and lease receivables. a FVLCD calculation.

As permitted by IFRS 9, the Group applies the ‘simplified In testing for indicators of impairment and performing
approach’ to trade receivable balances and the general impairment calculations, assets are considered as collective

12 Financial Statements
2.2 Significant accounting policies continued i) Restoration and rehabilitation
e) Impairment of assets continued The mining, extraction and processing activities of the
Group normally give rise to obligations for site closure or
rehabilitation. Closure and rehabilitation works can include
groups and referred to as cash generating units (CGU). Cash facility decommissioning and dismantling, removal or
generating units are the smallest identifiable group of assets treatment of waste materials, and site and land rehabilitation.
that generate cash inflows that are largely independent of the The extent of work required and the associated costs are
cash inflows from other assets or groups of assets. dependent on the requirements of relevant authorities and the
An impairment loss is reversed if there has been a change Group’s environmental policies.
in the estimates used to determine the recoverable amount.
An impairment loss is reversed only to the extent that the Provisions for the cost of the closure and rehabilitation
asset’s carrying amount does not exceed the carrying amount program are recognised at the time that environmental
that would have been determined, net of depreciation or disturbance occurs. When the extent of disturbance increases
amortisation, if no impairment loss had been recognised. over the life of an operation, the provision is increased
accordingly. Costs included in the provision encompass
The impairment assessments are based on a range of all closure and rehabilitation activity expected to occur
estimates and assumptions, including: progressively over the life of the operation and at the time of
closure in connection with disturbances at the reporting date.
Estimate/assumptions Useful life Routine operating costs that may impact the ultimate closure
Future production Proven and probable reserves and, in and rehabilitation activities, such as waste material handling
certain cases, expansion projects. conducted as an integral part of a mining or production
process, are not included in the provision.
Commodity prices Forward market and contract
prices, and long-term price protocol
Costs arising from unforeseen circumstances, such as
estimates.
the contamination caused by unplanned discharges, are
Exchange rates Current (forward) market exchange recognised as an expense and liability when the event gives
rates. rise to an obligation which is probable and capable of reliable
Discount rates Cost of capital risk adjusted for the risk estimation.
specific to the asset.
Expenditures may occur before and after closure and can
continue for an extended period of time depending on
f) Income taxes and deferred income taxes closure and rehabilitation requirements. The majority of the
Income tax expense consists of current and deferred income expenditure is expected to be settled within a period of 74
taxes. Current tax is the expected tax payable or receivable years from the reporting date.
on the taxable income or loss for the year using rates enacted
or substantively enacted at the year end and includes any Closure and rehabilitation provisions are measured at the
adjustment to tax payable in respect of previous years. expected value of future cash flows, discounted to their
present value and determined according to the probability
Deferred income taxes are provided using the balance sheet of alternative estimates of cash flows. Significant judgments
method, providing for the tax effect of temporary differences and estimates are involved in forming expectations of future
between the carrying amount of assets and liabilities for activities and the amount and timing of the associated cash
financial reporting purposes and the amounts used for taxation flows. Those expectations are formed based on existing
purposes. The amount of deferred tax recognised is based on environmental and regulatory requirements or, if more
the expected manner and timing of realisation or settlement stringent, Group environmental policies which give rise to a
of the carrying amount of assets and liabilities, using tax rates constructive obligation.
enacted or substantively enacted at period end.
When provisions for closure and rehabilitation are initially
A deferred tax asset is recognised only to the extent that it is recognised, the corresponding cost is capitalised as an asset,
probable that future taxable profits will be available against representing part of the cost of acquiring the future economic
which the asset can be utilised. Deferred tax assets are benefits of the operation. The capitalised cost of closure and
reviewed at each reporting date and adjusted to the extent rehabilitation activities is recognised in property, plant and
that it is no longer probable that the related tax benefit will be equipment and depreciated over the life of the operations. The
realised. amount of the provision is progressively increased over time
in accordance with the effects of discounting, generating an
Specific tax on mining activity is treated as taxation expense that is recognised in finance costs.
arrangements when they have the characteristics of a tax. This
is considered to be the case when they are imposed under Closure and rehabilitation provisions are also adjusted for
governmental authority and the amount payable is calculated changes in estimates. Those adjustments are accounted for as
considering the revenue derived (net of any allowable a change in the corresponding capitalised cost. Changes to the
deductions) after the adjustment for items comprising capitalised cost result in an adjustment to future depreciation
temporary differences. For Chile specific tax on mining activity, and financial charges. Adjustments to the estimated amount
current and deferred tax is determined on the same basis and timing of future closure and rehabilitation cash flows are
as described above for other forms of taxation. Obligations a normal occurrence in light of the significant judgments and
arising from the specific tax on mining activities arrangements estimates involved. Factors influencing those changes include:
that do not satisfy these criteria are recognised as current
provisions and included in expenses. • Additional disturbance during the period
• Revisions to estimated reserves, resources and lives of
g) Provision operations;
A provision is recognised if, as a result of a past event, the • Developments in technology;
Group has a present legal or constructive obligation that can • Regulatory requirements and environmental management
be estimated reliably, and it is probable that an outflow of strategies;
economic benefits will be required to settle the obligation. • Changes in the estimated timing costs of anticipated

Financial Statements 13
 activities, including the effects of inflation and movements in Trade and other payables
foreign exchange rates; and Such financial liabilities are recognised initially at fair value.
• Movements in interest rates affecting the discount rate Subsequent to initial recognition these financial liabilities are
applied. measured at amortised cost using the effective interest rate
method. Items presented in the statement of financial position
h) Provisions for post-retirement employee benefits as current liabilities have a maturity less than 12 months.
Severance indemnity payments - The Group has an agreement
with its employees which establishes the payment of Interest-bearing loans
severance indemnities on termination of employment. This Such financial liabilities are recognised initially at fair value
is calculated on the basis of one month per year of service plus any attributable transaction costs. Subsequent to
and is subject to a maximum limit in the amount of years of initial recognition these financial liabilities are measured at
service. The Group records a provision on the basis of the amortised cost.
best estimate of the severance indemnity that the Group has
to pay. Any difference between funds obtained (net of costs required
for obtaining funds) and the reimbursement amount is
Actuarial gains and losses are recognised directly in other recognised in the statement of profit or loss and other
comprehensive income and classified according to the nature comprehensive income during the life of the debt using the
of the transaction. effective interest rate method.

i) Foreign currency transactions Such liabilities are classified within current liabilities and non-
Transactions in foreign currencies are translated to the current liabilities based on the contractual expiration date of
functional currency of the Group at exchange rates at the nominal capital.
dates of the transactions. At each subsequent balance sheet
date, monetary amounts are reported using the closing rate. The Group has the following non-derivative financial liabilities:
Foreign exchange gains and losses resulting from translation loans and trade and other payables.
are recognised in the income statement, except for qualifying
cash flow hedges (which are deferred to equity) and foreign Subsequent to initial recognition these financial liabilities are
exchange gains or losses on foreign currency provisions for measured at amortised cost.
site closure and rehabilitation costs (which are capitalised
in property, plant and equipment for operating sites).Non- iii. Derivative financial instruments
monetary items that are measured in terms of historical cost The Group accounts for derivatives in accordance with IFRS
in a foreign currency are translated using the exchange rate 9, Financial Instruments. Derivative instruments are recorded
at the date of the transaction. Non-monetary amounts are not in the statements of financial position at their respective fair
re-measured at subsequent balance sheet date. value.

j) Financial instruments Derivatives, including those embedded in other contractual

i. Non-derivative financial assets arrangements but separated for accounting purposes
The Group initially recognises financial assets at amortised because they are not clearly and closely related to the host
cost on the date that they originate. All other financial assets contract, are initially recognised at fair value on the date the
are recognised initially on the trade date on which the Group contract is entered into. Subsequent to initial recognition,
becomes a party to the contractual arrangements. derivative financial instruments are measured at fair value.
The gain or loss arising from changes in the fair value of the
Cash and cash equivalents comprise cash balances and new measurement is recognised immediately in the statement
deposits with original maturities of three months or less. of profit or loss and other comprehensive income.

The Group derecognises a financial asset when the Under the terms of the sales agreements, the final price to
contractual rights to the cash flows from the asset expire, or be received will depend on the prices fixed for copper by
it transfers the rights to receive the contractual cash flows independent metal exchanges, including the London Metal
on the financial asset in a transaction in which substantially Exchange (LME) during future quotation periods applicable to
all the risks and rewards of ownership of the financial asset each shipment, resulting in the price recognised with a one-
are substantially transferred. Any interest in transferred month time lag for cathodes and three to four-month time lag
financial assets that are created or retained by the Group are for concentrates, for all tonnes of copper shipped in a given
recognised as a separate asset or liability. calendar year.

Financial assets and liabilities are offset and the net amount iv. Fair value and classification
presented in the statement of financial position when, and (a) Derivatives - The fair value of forward sales contracts is
only when, the Group has a legal right to offset the amounts based on their quoted market price. Such fair value reflects
and intends either to settle on a net basis or to realise the the credit risk of the instrument and includes the adjustments
asset and settle the liability simultaneously. of the Group’s and counterparty’s credit risk, where
applicable.
ii. Non-derivative financial liabilities The fair value hierarchy categorises the inputs to valuation
The Group initially recognises debt securities issued and techniques into three levels of fair value that are defined as
subordinated liabilities on the date that they are originated. follows:
All financial liabilities at fair value through profit or loss are
recognised initially on the trade date at which the Group Level 1: quoted prices (unadjusted) in active markets for
becomes a party to the contractual arrangements. identical assets or liabilities;
Level 2: inputs other than quoted prices included within Level
The Group derecognises a financial liability when its 1 that are observable for the asset or liability, either directly
contractual obligations are discharged, cancelled or when (i.e. as prices) or indirectly (i.e. derived from prices);
they expire. Level 3: inputs for the asset or liability that are not based on
observable market data (unobservable inputs).

14 Financial Statements
2.2 Significant accounting policies continued changes in the mine production capacity; such as:

• Activities representing significant changes in the volume

k) Revenue recognition of material that can be extracted or variations in the cost
The Group generates revenue from the production and sale of extraction methods.
of copper cathodes and concentrate. Revenue is recognised • Activities that strengthen or maintain production capacity
when control of the promised goods or services pass to the of a mine where resources have been depleted.
customer. In most instances, control passes when the goods • Activities resulting in the deferral of production activities
are delivered to a destination specified by the customer, recognised in the mine plan as a disruption of production
which is typically on board the customer’s appointed vessel. activities. These activities will not be frequent and will
The amount of revenue recognised reflects the consideration replace or restore the economic benefits used in prior
to which the entity expects to be entitled in exchange for periods.
those goods or services.
Production stripping corresponds to stripping (overburden
A significant proportion of the Group’s goods are sold on removal) during the production stages that begin at the time
Cost, Insurance and Freight (CIF) Incoterms, where the in which the mineral is extracted from the component.
Group is required to provide freight and shipping services
after the date at which the goods have transferred to the Based on Management’s analysis, each phase of a surface
customer. The Group has a separate performance obligation mine has been identified as a component of the ore body,
for freight and shipping services. which is in line with the manner in which the
Group plans and performs its mining activities.
Contracts in place between the Group and its customers
include a range of terms and pricing mechanisms. Where The Group recognises a stripping activity asset as a part of
the Group’s sales are provisionally priced, the final price property, plant and equipment if and only if the following
depends on future index prices. Final prices are normally three criteria are met:
determined between 30 to 120 days after delivery of the
goods. The amount of revenue initially recognised is based • It is probable that the future economic benefit (improved
on the relevant forward market price. Adjustments between access to the ore body) associated with the stripping
the provisional and final price are accounted for under activity will flow to the entity;
IFRS 9 Financial Instruments and recognised in revenue. • the entity can identify the component of the ore body for
Provisional pricing adjustments are separately disclosed in which access has been improved; and
the notes to the financial statements as other revenue. • the costs relating to the stripping activity associated with
that component can be measured reliably.
Revenue excludes any applicable sales taxes and royalties.
Stripping costs incurred during the development stages
Revenue from the sale of significant by-products is included of a mine are treated as mine development expenses and
within revenue. Where a by-product is not significant, capitalised as assets under construction.
revenue is credited against costs.
Capitalisation of development stripping costs ceases at the
A receivable is recognised when the goods are delivered, time that saleable material begins to be extracted from the
as this is the point in time when the consideration is mine.
unconditional. Cash received before control of the promised
goods or services passes to the customer is recognised as Mine development is depreciated based on the units-of-
deferred income. The Group does not have any contracts production method based on the estimated ore reserves for
where the period between the transfer of the promised the project at the beginning of the year.
goods or services and payment by the customer is expected
to exceed one year. As a consequence, the Group does not Post-production mine development costs are recognised as
adjust any of the transaction prices for the time value of follows:
money.
• When the actual stripping ore ratio of overburden
The Group has several long-term contracts in place to (overburden/fine copper) is greater than the stripping
provide goods to customers in future periods. Revenue on ore ratio established for the phase’s estimated useful life,
these contracts is generally recognised on an as invoiced postproduction stripping costs are capitalised as part of
basis, reflecting the Group’s right to consideration from other mineral assets.
the customer which corresponds directly with the Group’s • When the actual stripping ore ratio of overburden is lower
performance completed to date. than the phase estimated useful life stripping ore ratio,
costs are recognised in profit or loss as operating costs.
The Group applies the practical expedient in IFRS 15
Revenue paragraph 121 to not disclose information on the Assets capitalised for overburden removal will be
transaction price allocated to performance obligations that subsequently amortised on a units of production basis over
are unsatisfied. the remaining reserves from the related phase identified.

l) Overburden removal costs m) Exploration and evaluation expenses

Under IFRIC 20, the stripping activity related to inventory is Exploration and evaluation activities involve the search for
accounted for in accordance with IAS 2 “Inventories” and mineral and water resources, the determination of technical
the stripping activity that improves access to the ore body is feasibility and the assessment of commercial feasibility of an
accounted for as an existing asset. identified resource.

The Group’s accounting policy establishes that development Exploration and evaluation activities include:
stripping can be generated at any time during the life of
the mine and an asset will be recognised as the cost of • Researching and analysing historical exploration data.
overburden, to the extent that it represents significant • Gathering exploration data through topographical,

Financial Statements 15
 geochemical and geophysical studies. 2.3 New and Amended Accounting standards and
• Exploratory drilling, trenching and sampling. interpretations
• Determining and examining the volume and grade of the The Company applied certain standards, interpretations and
resource. amendments for the first time, which are effective for annual
• Surveying transportation and infrastructure requirements. periods beginning on or after January 1, 2022. The Company
• Conducting market and financial feasibility studies. has not early adopted any other standard, interpretation or
amendment that has been issued but is not yet effective.
Administration costs that are not directly attributable to
a specific exploration area are recognised in profit or loss The standards, interpretations and amendments to IFRS that
as incurred. Licence costs paid in connection with a right went into effect as of the date of the financial statements, as
to explore in an existing exploration area are recognised well as their nature and impact, are detailed below:
in profit and loss. Exploration and evaluation expenditure
(including amortisation of capitalised licence costs) is Amendments with application Date of
recognised in profit or loss as incurred, except where the on January 1, 2022 mandatory
existence of a commercially viable mineral deposit has been application
established.
IFRS 3 Reference to the Conceptual January 1, 2022
Cash flows associated with exploration and evaluation Framework
expenses that have been disbursed are classified under
operating activities in the statement of cash flows. IAS 16 Property, Plant and Equipment: January 1, 2022
Proceeds before Intended Use
n) Development expenditure
When proved reserves are determined and development IAS 37 Onerous Contracts – Costs of January 1, 2022
is authorised, capitalised exploration and evaluation Fulfilling a Contract
expenditure is reclassified to ‘construction in progress’ and
disclosed as a component of property, plant and equipment. IFRS 1, IFRS 9, Annual improvements standards January 1, 2022
All subsequent development expenditure is capitalised and IFRS 16, and 2018-2020
classified as construction in progress. IAS 41

Development expenditure is recorded net of proceeds IFRS 3 Reference to the Conceptual Framework
from the sale of ore extracted during the development In May 2020, the IASB issued Amendments to IFRS 3 Business
phase. On completion of development, all assets included Combinations - Reference to the Conceptual Framework.
in ‘construction in progress’ are reclassified as either ‘plant The amendments are intended to replace a reference to a
and equipment’ or ‘other mining assets’ in case of deferred previous version of the IASB’s Conceptual Framework (the 1989
stripping. Framework) with a reference to the current version issued in
March 2018 (the Conceptual Framework) without significantly
o) Finance income and finance costs changing its requirements.
Finance income comprises interest income on cash and
cash equivalents. Interest income is recognised as it The amendments add an exception to the recognition principle
accrues in profit or loss. Finance costs comprise of interest of IFRS 3 to avoid the issue of potential ‘day 2’ gains or losses
expense on borrowings, the unwinding of the discount rate arising for liabilities and contingent liabilities that would be
on provisions, impairment losses recognised for financial within the scope of IAS 37 Provisions, Contingent Liabilities
assets. Borrowing costs that are not directly attributable to and Contingent Assets or IFRIC 21 Levies, if incurred separately.
the acquisition, construction or production of a qualifying The exception requires entities to apply the criteria in IAS 37 or
asset are recognised in profit or loss. IFRIC 21, respectively, instead of the Conceptual Framework, to
determine whether a present obligation exists at the acquisition
Finance costs are expensed as incurred, except where they date.
relate to the financing of construction or development
of material qualifying assets. Borrowing costs directly At the same time, the amendments add a new paragraph
attributable to acquiring or constructing a qualifying asset to IFRS 3 to clarify that contingent assets do not qualify for
are capitalised during the development phase. Qualifying recognition at the acquisition date.
assets are assets that require a substantial period of time to
be ready for their intended use. The amendments should be applied prospectively.

p) Mineral Reserve The amendment is applicable for the first time in 2022,
Reserves are estimates of the amount of product that can however, it did not have an impact on the Company’s financial
be economically and legally extracted from the Group’s statements.
properties. In order to calculate reserves, estimates and
assumptions are required about a range of geological, IAS 16 Property, Plant and Equipment: Proceeds before
technical and economic factors, including quantities, Intended Use
grades, production techniques, recovery rates, production The amendment prohibits entities from deducting from the
costs, transport costs, commodity demand, commodity cost of an item of property, plant and equipment (PP&E), any
prices and exchange rates. proceeds of the sale of items produced while bringing that
asset to the location and condition necessary for it to be
Estimating the quantity and/or grade of reserves requires capable of operating in the manner intended by management.
the size, shape and depth of ore bodies or fields to be Instead, an entity recognises the proceeds from selling such
determined by analysing geological data such as drilling items, and the costs of producing those items, in profit or loss.
samples. This process may require the analysis of geological
information which is complex and difficult to interpret. The amendment must be applied retrospectively only to items
of PP&E made available for use on or after the beginning of
the earliest period presented when the entity first applies the
amendment.

16 Financial Statements
The amendment is applicable for the first time in 2022, force as of the date of these financial statements, are detailed
however, it did not have an impact on the Company’s financial below. The Group has not applied these standards in advance:
statements.
New IFRS and modifications Date of mandatory application
IAS 37 Onerous Contracts – Costs of Fulfilling a Contract
In May 2020, the IASB issued amendments to IAS 37 to specify IFRS 17 Insurance Contracts Annual periods beginning on or
which costs an entity needs to include when assessing whether after January 1, 2023.
a contract is onerous or loss-making.
IAS 8 Definition of Accounting Annual periods beginning on or
The amendments apply a ‘directly related cost approach’. Estimates after January 1, 2023.
The costs that relate directly to a contract to provide goods
or services include both incremental costs (e.g., the costs of IAS 1 Disclosure of Accounting Annual periods beginning on or
direct labour and materials) and an allocation of costs directly Policies after January 1, 2023.
related to contract activities (e.g., depreciation of equipment
used to fulfil the contract as well as costs of contract IAS 12 Deferred Tax related to Annual periods beginning on or
management and supervision). General and administrative Assets and liabilities arising after January 1, 2023.
costs do not relate directly to a contract and are excluded from a Single transaction
unless they are explicitly chargeable to the counterparty under
the contract. IAS 1 Classification of Liabilities Annual periods beginning on or
as Current or Non-current after January 1, 2024.
The amendments must be applied prospectively to contracts
for which an entity has not yet fulfilled all of its obligations at IFRS 16 Lease Liability in a Sale Annual periods beginning on or
the beginning of the annual reporting period in which it first and Leaseback after January 1, 2024.
applies the amendments (the date of initial application). Earlier
application is permitted and must be disclosed. IFRS 10 and IAS 28 Sale or To be defined.
contribution of Assets between
The amendment is applicable for the first time in 2022, an Investor and its Associate or
however, it did not have an impact on the Company’s financial Joint Venture
statements.
The Group will evaluate the impacts of the amendments
IFRS 1, IFRS 9, IFRS 16 Improvements to IFRS 2018 – 2020 once they come into effect.
The IASB’s annual improvements process deals with non-
urgent, but necessary, clarifications and amendments to IFRS.

IFRS 1 First-time Adoption of International Financial Reporting 3. Revenue

Standards The Group generates revenue from the production and
The amendment permits a subsidiary that elects to apply sales of copper concentrate and copper cathodes. Copper
paragraph D16(a) of IFRS 1 to measure cumulative translation concentrate also contains gold and silver in saleable
differences using the amounts reported in the parent’s quantities. These represented 2% in 2022 of total copper
consolidated financial statements, based on the parent’s concentrate revenue (4% in 2021). As of December 31, 2022
date of transition to IFRS, if no adjustments were made for and 2021, revenue is composed as follows:
consolidation procedures and for the effects of the business
combination in which the parent acquired the subsidiary. This 2022 2021
amendment is also applied to an associate or joint venture that US$’000 US$’000
elects to apply paragraph D16 (a) of IFRS 1.
Cathodes
IFRS 9 Financial Instruments Revenue from contract with customers 1,835,440 1,898,147
The amendment clarifies the fees that an entity includes when
assessing whether the terms of a new or modified financial Other (losses) * (39,960) (31,957)
liability are substantially different from the terms of the original Total Cathodes 1,795,480 1,866,190
financial liability. These fees include only those paid or received
between the borrower and the lender, including fees paid or
received by either the borrower or lender on the other’s behalf. Concentrate
There is no similar amendment proposed for IAS 39.
Revenue from contract with customers 7,272,028 8,393,943
IFRS 16 Leases Other (losses) * (306,454) (477,247)
The amendment removes the illustration of payments from
the lessor relating to leasehold improvements in Illustrative Total Concentrate 6,965,574 7,916,696
Example 13 accompanying IFRS 16. This removes potential Total Revenue 8,761,054 9,782,886
confusion regarding the treatment of lease incentives when
applying IFRS 16. * Other revenue is related to the effect of the adjustment in price for
provisional invoices during the reporting period.

IAS 41: Taxation in fair value measurements

The amendment eliminates the requirement in paragraph 22 of
IAS 41 so that entities may exclude taxation cash flows when 4. Other Income
measuring the fair value of assets within the scope of IAS 41.
2022 2021
The amendments noted above were applicable for the first US$’000 US$’000
time in 2022, however, they did not have an impact on the Income from miscellaneous operations (a) 29,534 52,262
Company’s financial statements.
Total other income 29,534 52,262
The standards and interpretations, as well as the amendments
to IFRS, which have been issued, but have not yet entered into (a) Primary related to the sale of scrap consumables.

Financial Statements 17
 5. Expenses excluding net finance expenses

2022 2021
US$’000 US$’000

Movements in finished product inventories and work-in-progress (142,866) (695)

Raw materials and consumables 1,676,375 1,452,534
Employee payroll and benefit (a) 332,243 418,621
Outsourcing services (including transportation) 1,093,017 936,970
Net foreign currency translation loss/(gain) 15,785 (49,349)
Equipment rentals 14,479 11,366
Depreciation and amortisation 867,172 933,222
Impairment of property, plant and equipment - 1,596
Deferred stripping depletion 232,418 226,040
Other operating cost 340,908 314,283
Total expenses 4,429,531 4,244,588

a) Details of employee payroll and benefits are detailed as follows:

2022 2021
US$’000 US$’000

Employee payroll and benefits 329,092 414,393

Share-based payment awards for employees – BHP* 3,151 4,228
Total employee payroll and benefits 332,243 418,621

*This payment was made by the Parent Company.

b) Employees:
Number of employees as at December 2022 was 3,725 (2021: 3,708).

6. Net Finance expenses

2022 2021
US$’000 US$’000

Finance expenses
Interest expense using the effective interest rate method:

Bank loan interest 77,731 47,380

Other interest 32,195 28,438
Interest on leases 31,890 33,721
Interest costs - related parties 228 845
Discount in provisions and other liabilities 71,427 36,015
Capitalised interest (a) (7,505) (556)
Other gains or losses:
Foreign currency translation changes - net debt 4,081 (7,081)
Foreign currency translation changes - net debt, related parties 256 (730)
Total finance expenses 210,303 138,032
Finance income
Interest income (891) (568)
Other finance income (2,716) (399)
Total finance income (3,607) (967)
Total net finance expenses 206,696 137,065

(a) Interest has been capitalised (ThUS$ 7,505 as of December 31, 2022 and ThUS$ 556 as of December 31, 2021) at the interest rate applicable to specific
loans financing assets under construction at a capitalisation rate that represents the average interest rate for such loans. As of December 31, 2022, the
capitalisation rate is 2.56% (2.53% as of December 31, 2021).

18 Financial Statements
7. Income tax expense and deferred taxes
a) Income tax expense
Income tax expense for the years ended December 31, 2022 and 2021 are detailed as follows:

2022 2021
US$’000 US$’000

Income tax expense 1,042,759 1,383,396

Mining royalty tax expense 225,902 344,387
Deferred income tax expense for the period 12,480 54,851
Prior year adjustment (22,619) (8,039)
Other (1,495) (23,537)
Total current and deferred income tax expense 1,257,027 1,751,058

As of December 31, 2022, profit and loss shows an effect related to the corporate tax and specific mining tax of ThUS$ 1,257.
This represents a decrease of 28% compared with December 2021 where the income tax expense amounted to ThUS$ 1,751. This
is explained mainly by lower sales and the decrease in the price of the copper for 2022 compared with 2021.

The specific tax on mining activities implies variable rates range between 5% and 14%. For 2021 the tax rate was 6.77% and for
2022 is 5.89%.

Reconciliation of the effective tax rate is detailed as follows:

% 2022 % 2021
US$’000 US$’000

Profit before taxes 4,154,361 5,453,495

Income tax at legal tax rate 27.0% 1,121,678 27.0% 1,472,444
Factors affecting income tax for the period:
Specific tax on mining activities 5.89% 244,692 6.77% 369,202
Other (*) -2.63% (109,343) -1.66% (90,588)
Total tax expense 30.26% 1,257,027 32.11% 1,751,058

*Related to permanent differences and non-deductible expenses.

b) Income tax recognised in other comprehensive income

Income tax expenses relating to items that will not be reclassified to profit or loss as at December 31, 2022 is ThUS$ 5,369
(Income tax benefit ThUS$ 12,818 as of December 31, 2021) related to actuarial losses calculated on post-retirement employee
benefits.

c) Deferred taxes
As of December 31, 2022 and 2021, deferred taxes are detailed as follows:
2022 2021
Net deferred taxes US$’000 US$’000
Opening balance 1,317,706 1,280,595
Deferred tax/expense 12,480 54,851
Re-measurements and other movements (9,651) (4,943)
Income tax credit recorded directly in equity 5,369 (12,818)
Other movements - 21
Balance as of December 31 1,325,904 1,317,706

Deferred tax asset (liability)

Property, plant and equipment (1,411,271) (1,431,798)
Provisions 10,676 11,182
Stripping costs (195,101) (179,362)
Mine restoration 183,569 137,386
Leases 22,039 18,411
Other 64,184 126,475
Total deferred tax (liability) (1,325,904) (1,317,706)

Financial Statements 19
 d) Current tax assets and liabilities
As of December 31, 2022 and 2021, the Group determined, pursuant to the tax laws currently in effect, the income tax expense
provision for the period and specific royalty on mining activities, by virtue of publication in the Official Gazette of Law No.
20.097, to which the monthly provisional income tax payments were credited, detailed as follows:

2022 2021
US$’000 US$’000
Income tax expense (1,042,759) (1,383,396)
Expense for specific mining tax activities (225,902) (344,387)
Less:
Monthly provisional income tax payments 975,485 826,147
Monthly provisional specific mining tax payments 231,151 159,415
Plus:
Other 4,612 (980)
Total current tax asset (liability) (57,413) (743,201)

As of December 31, 2022 the total taxable retained earnings amounts to ThUS$5,099,923 with an associated credit of
ThUS$1,402,376 of which ThUS$4,580,490 is presented with a tax credit of 20.9% and ThUS$519,432 with an associated credit
of 27%. This amount includes the historical Taxable Profits Fund (FUT – Fondo Utilidad Tributario) extinguished by the Chilean
Tax reform as of 1 January 2017 which is now part of the new Taxable profit (RAI) register.

8. Trade and other receivables

2022 2021
US$’000 US$’000

Trade and other receivables, current

Trade receivables 901,572 716,462

Other receivables 234,961 183,693

Total current 1,136,533 900,155

Trade and other receivables, non-current

Other receivables 32,981 35,328

Total non-current* 32,981 35,328

* Refer to note 20 for further information regarding aging and recovery details.

20 Financial Statements
9. Receivables and payables due to/from related parties
Company Taxpayer Country Relationship Currency Transaction description Terms 2022 2021
ID US$’000 US$’000

BHP Chile Inc. (Chile Branch) 86.160.300-8 Chile Common owners US$ Miscellaneous services 30 days 266 291

BHP Chile Inversiones 77.950.280-5 Chile Common owners US$ Miscellaneous services 30 days - 1,410

Tamakaya Energía SpA 76.349.223-0 Chile Common owners US$ Gas sales 30 days 8,100 21,993

Minera Spence S.A 86.542.100-1 Chile Common owners US$ Sale of cathodes and other 30 days 13 22

Cía. Minera Cerro Colorado Ltda. 94.621.000-5 Chile Common owners US$ Miscellaneous services 30 days - 4

Others Miscellaneous US$ Miscellaneous services 30 days 634 143

Total trade receivables due from related parties, current 9,013 23,863

As of December 31, 2022 and 2021 trade and other payables due to related parties are detailed as follows:
Company Taxpayer Country Relationship Currency Transaction description Terms 2022 2021
ID US$’000 US$’000

BHP Chile Inc. (Chile Branch) 86.160.300-8 Chile Common owners US$ Miscellaneous services 30 days 30,723 22,331

Minera Spence S.A 86.542.100-1 Chile Common owners US$ Purchase of cathodes and other 30 days 58 21

Cía. Minera Cerro Colorado Ltda. 94.621.000-5 Chile Common owners US$ Miscellaneous services 30 days 159 126

BHP Chile Inversiones 77.950.280-5 Chile Common owners US$ Miscellaneous services 30 days 53,557 29,586

BHP Group Operations Foreign Australia Common owners US$ Miscellaneous services 30 days 5,571 5,207

BHP Limited Foreign Australia Common owners US$ Miscellaneous services 30 days 1,037 1,850

BHP International Finance Corporation 59.023.350-1 USA Common owners US$ Miscellaneous services 30 days 25,808 25,808

BHP Freight Singapore Foreign Singapore Common owners US$ Miscellaneous services 30 days 2,848 7

BHP Shared Services Foreign Malaysia Common owners US$ Miscellaneous services 30 days - 274

BHP Shared Services Foreign Philippines Common owners US$ Miscellaneous services 30 days 127 293

Tamakaya Energía SpA 76.349.223-0 Chile Common owners US$ Energy purchase 30 days 968 57,297

BHP Marketing Asia Pte Ltd Foreign Singapore Common owners US$ Miscellaneous services 30 days 761 969

BMAG - Copper America Foreign USA Common owners US$ Miscellaneous services 30 days 1,759 2,074

Others Miscellaneous US$ Miscellaneous services 30 days 635 729

Total trade payables due to related parties, current 124,011 146,572

Company Taxpayer Country Relationship Currency Transaction description Terms 2022 2021
ID US$’000 US$’000

BHP Exploration Chie SPA 76.451.649-4 Chile Common owners US$ Loans 1-5 years - 45,833

Total trade payables due to related parties, non-current - 45,833

The details of the subordinated debt with related parties is described as follows:

As of the date of these financial statements, no guarantees have been provided or received for trade receivables due from
and/or payables to related parties, and no uncollectible amounts exist. An assessment of the expected credit losses relating to
related party receivables has been performed at December 31, 2022 and the expected credit loss provision is immaterial.

Financial Statements 21
 10. Transactions with related parties
Significant transactions with related parties are detailed as follows:
2022 2021
Company Taxpayer Country Relationship Currency Transaction description Amount Effect Amount Effect
ID US$’000 on profit US$’000 on profit
or loss or loss
debit/ debit/
(credit) (credit)
US$’000 US$’000

BHP Chile Inc. 86.160.300-8 Chile Common owners USD Project management and 144,298 144,298 118,722 118,722
other services

BHP Chile Inc. 86.160.300-8 Chile Common owners USD Marketing services 1,800 1,800 1,800 1,800

BHP Chile Inc. 86.160.300-8 Chile Common owners USD Management fee 13,413 13,413 10,693 10,693

BHP Limited Foreign Australia Common owners USD Miscellaneous services 17,333 17,333 19,383 19,383

Broken Hill Proprietary (USA) Foreign USA Common owners USD Miscellaneous services 92 92 898 898

BHP Group Operation Foreign Australia Common owners USD Miscellaneous services 46,628 46,628 36,909 36,909

BHP Shared Services Foreign Malaysia Common owners USD Miscellaneous services 3,546 3,546 4,767 4,767

BHP Shared Services Foreign Philippines Common owners USD Miscellaneous services 2,558 2,558 2,651 (2,651)

BHP Marketing Asia PT Foreign Singapore Common owners USD Miscellaneous services 11,269 11,269 10,913 10,913

BHP Escondida INC Foreign USA Owners USD Dividends paid* 1,558,825 - 2,633,500 -

Rio Tinto Finance PLC 59.023.330-7 Bermuda Owners USD Dividends paid* 813,300 - 1,374,000 -

Jeco Corporation 59.023.340-4 Japan Owners USD Dividends paid* 271,100 - 458,000 -

Jeco 2 Limited 59.158.690-4 England Owners USD Dividends paid* 67,775 - 114,500 -

BMAG - Petroleum Foreign USA Common owners USD Miscellaneous services 516 516 1,554 1,554

BHP Petroleum Foreign USA Common owners USD Miscellaneous services 49 (49) 1,232 1,232

Minera Spence S.A 86.542.100-1 Chile Common owners USD Miscellaneous services 293 (293) 763 (763)

Cía.Minera Cerro 94.621.000-5 Chile Common owners USD Miscellaneous services 1,258 1,258 1,275 1,275
Colorado Ltda.

BHP Marketing AG Foreign Singapore Common owners USD Sales commissions 23,421 23,421 24,218 24,218

Tamakaya Energia SpA 76.349.223-0 Chile Common owners USD Power purchase agreement 821,289 821,289 356,967 356,967

Tamakaya Energia SpA 76.349.223-0 Chile Common owners USD Gas sale agreement 117,981 (117,981) 212,809 (212,809)

BHP Chile Inversiones 77.950.280-5 Chile Common owners USD Purchase of acid 167,869 167,869 59,596 59,596

BHP Freight Singapore Foreign Singapore Common owners USD Freight 229,945 229,945 171,632 171,632

BHP Minerals Pty Ltd Foreign Australia Common owners USD Miscellaneous services 27 27 222 (222)

Other Common owners USD Miscellaneous services 1,554 1,554 187 187

*Dividend paid on behalf of owners

Transactions with related parties detailed above were performed under regular arm’s length terms and conditions.

22 Financial Statements
11. Inventories
2022 2021
US$’000 US$’000

Inventories
Raw materials and supplies for production (a) 269,619 276,729
Work-in-progress (b) 641,030 562,293
Finished products (b) 83,580 85,039
Total inventories current 994,229 924,061
Raw materials and supplies for production (c) 253,233 226,000
Work-in-progress (b)(c) 421,331 355,718
Total inventories non-current 674,564 581,718

(a) During 2022, the Group has written-off warehouse materials inventories worth ThUS$ 17,838 (ThUS$ 20,477 as of December
31, 2021) which is included in costs.
(b) During 2022, there were no inventories that were written down to net realisable value (NRV).
(c) Raw material and supplies for production, Work-in-progress non-current are not expected to be utilised or sold within 12
months after the reporting date.

12. Property, plant and equipment

2022 Construction-in- Land and Plant and Other Right of Total

progress buildings equip- mining use assets
ment assets
US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

Cost
Opening balance as of January 1, 2022 495,798 1,700,339 19,202,226 1,892,682 639,163 23,930,208
Additions (a) 675,190 - 195,879 413,347 50,278 1,334,694
Transfers (122,026) 26,842 19,296 (232,418) - (308,306)
Disposals - - - - (77,335) (77,335)
Balance as of Dec 31, 2022 1,048,962 1,727,181 19,417,401 2,073,611 612,106 24,879,261

Accumulated depreciation
Opening balance as of January 1, 2022 - (940,998) (11,380,830) (359,143) (253,371) (12,934,342)
Depreciation expense - (43,808) (703,281) (51,116) (68,967) (867,172)
Disposals - - - - 77,336 77,336
Transfers - - 47,674 - - 47,674
Balance as of Dec 31, 2022 - (984,806) (12,036,437) (410,259) (245,002) (13,676,504)
Net Ending balance as of Dec 31, 2022 1,048,962 742,375 7,380,964 1,663,352 367,104 11,202,757

Financial Statements 23
 12. Property, plant and equipment continued
2021 Construction-in- Land and Plant and Other Right of Total
progress buildings equip- mining use assets
ment assets
US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

Cost
Opening balance as of January 1, 2021 440,436 1,700,238 19,015,180 1,703,351 627,298 23,486,503
Additions (a) 369,358 - (102,394) 415,370 11,865 694,199
Transfers (313,996) 101 313,895 (226,039) - (226,039)
Disposals - - (24,455) - - (24,455)
Balance as of Dec 31, 2021 495,798 1,700,339 19,202,226 1,892,682 639,163 23,930,208

Accumulated depreciation - (894,681) (10,632,761) (313,512) (183,025) (12,023,979)

Opening balance as of January 1, 2021 - (46,317) (770,928) (45,631) (70,346) (933,222)
Depreciation expense - - 24,455 - - 24,455
Disposals - - - - - -
Transfers - - (1,596) - - (1,596)
Balance as of Dec 31, 2021 - (940,998) (11,380,830) (359,143) (253,371) (12,934,342)
Net Ending balance as of Dec 31, 2021 495,798 759,341 7,821,396 1,533,539 385,792 10,995,866

(a) Additions for plant and equipment include net foreign exchange gain/losses related to the closure and rehabilitation
provisions. Refer to Note 15 Provisions.
(b) The Group has no impairment as of December 31, 2022 (ThUS$ 1,596 as of December 31, 2021).

During the years ended December 31, 2022 and 2021, the Group did not have pledged assets.

The Group has lease contracts for various items of mining equipment, power plant, motor vehicles and buildings used in its
operations. Leases of mining equipment generally have lease terms between three to seven years, power plant useful life (Kelar
plant) has a term of fifteen years, while motor vehicles and buildings generally have lease terms between three to five years. The
Group’s obligations under its leases are secured by the lessor’s title to the leased assets. Generally, the Group is restricted from
assigning and subleasing the leased assets and some contracts require the Group to maintain certain financial ratios.

The Group also has leases of assets with lease terms of 12 months or less and leases of office equipment with low value due to
the exemption permitted, they have not been included in the treatment of leases.

13. Trade and other payables

2022 2021
US$’000 US$’000

Trade and other payable, current

Trade payables 632,926 390,017
Other payables 38,386 23,294
Total trade and other payables, current 671,312 413,311

Trade and other payables, non-current

Other payables 179 276
Total trade and other payables, non-current 179 276

24 Financial Statements
14. Interest bearing liabilities
2022 2021
US$’000 US$’000

Current
Unsecured bank loans (a) 218,571 430,821
Lease liabilities 52,673 48,811
Total loans, current 271,244 479,632
Non-current

Unsecured bank loans (a) 2,241,895 1,763,752

Leases liabilities 385,522 395,803
Total loans, non-current 2,627,417 2,159,555

(a) Bank loans include the following:

i. On June 06, 2017, the Group entered into a loan agreement of ThUS$500,000, of which ThUS$300,000 was granted by JBIC
and ThUS$200,000 by a group of banks, led by The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BoTM) as the agent bank.
a. The loan payable to JBIC is due in 15 biannual payments starting in the first half of 2020 (and ending on June 01,
2027) and bears interest at USD LIBOR (180 days) + 0.475%. As of December 31, 2022, the outstanding balance loan
payable to JBIC is ThUS$180,000 (ThUS$220,000 December 31, 2021).
b. The loan payable to the group of banks led by BoTM is due in 17 biannual payments starting in December 2017
(and ending on June 01, 2024) and bears interest at a rate of USD LIBOR (180 days) + 1.350%. As of December 31, 2022,
the outstanding balance loan payable is ThUS$42,857 (ThUS$71,428 December 31, 2021).
ii. On October 11, 2018, the Group entered into a loan facility agreement of ThUS$250,000 with EDC. Under this agreement, the
Group has made two drawdowns which both bear interest at USD LIBOR (180 days) + 1.29%:
a. A ThUS$150,000 loan, drawn on October 11, 2018, which is payable in full on October 11, 2023.
b. A ThUS$100,000 loan, drawn on February 22, 2019, which is payable in full on February 22, 2024.
iii. On November 19, 2019, the Group entered into a loan facility agreement of ThUS$500,000 with a group of lenders led by
BoTM as the agent bank. Under this agreement, the Group has made two drawdowns which both bear interest at USD LIBOR
(180 days) + 1.10%:
a. A ThUS$300,000 loan, drawn on November 22, 2019, which is payable in full on November 22, 2024; and
b. A ThUS$200,000 loan, drawn on February 24, 2020, which is payable in full on November 22, 2024.
iv. On October 6, 2021, the Group entered into a loan agreement of ThUS$300,000 with a group of banks, led with Bank of Nova
Scotia as the agent bank. The loan bears interest at USD LIBOR (180 days) + 1.15% and is payable in full on October 8, 2026.
v. On March 22, 2022, the Group entered into a loan agreement of ThUS$550,000 with a group of banks led by Sumitomo Mitsui
Banking Corporation (SMBC) as the agent bank. The loan bears interest at SOFR (90 days) + 1.275% and is payable in full on
March 25, 2027.
vi. On March 22, 2022, the Group entered into a loan agreement of ThUS$300,000 with a group of lenders led by SMBC as the
agent bank. The loan was drawn in full on May 24, 2022, bears interest at SOFR (90 days) + 1.60% and is payable in full on March
22, 2029.
vii. On December 12, 2022, the Company entered into a loan agreement of ThUS$350,000 with EDC as the agent bank. The loan
with EDC will be paid on quarterly payment starting March 12, 2023 and bears interest at SOFR (90 days) + 1.60% and is payable
in full on December 12,2029.

The London Interbank Offered Rate (LIBOR) and other benchmark interest rates are being replaced by alternative risk-free rates
(ARR) as part of inter-bank offer rate (IBOR) reform. Sterling LIBOR ceased to be published on 1 January 2022 and USD LIBOR
will no longer be published after 30 June 2023. Effective January 2022, Libor will no longer be used to issue new loans and is
being replace by the Secured Overnight Financing Rate (SOFR). The Group has assessed the implication of IBOR reform and has
updated various policies, systems, and processes. In March 2022, The Group executed its first SOFR linked loans. Furthermore,
it is in the process of amending existing loan agreements, which mature after June 2023 to reference the Secured Overnight
Financing Rate (SOFR).

Financial Statements 25
 15. Provision
2022 2021
US$’000 US$’000

Current provisions
Employee benefits (a) 61,622 76,362
Post-retirement employee benefits (d) 8,504 7,989
Restoration and rehabilitation (c) 48,506 21,031
Other (c) 5,524 10,970
Total 124,156 116,352

Non-current provision
Post-retirement employee benefits (d) 112,411 111,321
Restoration and rehabilitation (b) 712,213 487,804
Total 824,624 599,125

(a) The expenditure associated with total employee benefits will occur in a pattern consistent with the timing that the employees
choose to exercise their entitlement to benefits.
(b) The total undiscounted amount of restoration and rehabilitation activities is ThUS$ 2,367,239 as of December 31, 2022
(ThUS$ 2,001,820 as of December 31, 2021). In accordance with Law 20.551, which regulates the closure of mine site or
facilities in Chile, the Group is obligated to submit a commitment (in the form of financial instruments that can be used as
guarantees) to the regulating authority that supports the Company’s compliance with its closure and rehabilitation
obligations in a future period. The Group’s closure obligations are based on its closure plan approved by the regulator.
(c) Other includes mainly on-going legal cases of ThUS$ 5,438 (ThUS$ 8,433 in December 31, 2021).
(d) The expense associated with total employee benefits demonstrates a consistent pattern when employees opt to exercise
their right to receive benefits and /or awards. Expenses associated with severance indemnity payments expose the Company
to actuarial risks, such as longevity, currency and interest rate risks.

The methodology used to determine the provision for all the employees adhered to collective bargaining agreements has
considered turnover rates and the mortality table RV-2014 issued by the Financial Market Commission (CMF) to calculate
the reserves of pension life insurance in Chile, in accordance with the accumulated benefit valuation or accrued benefit cost
method.

Using such method, the Company establishes the amount of benefits related to total severance indemnity payments that
should be paid to the employee or employee’s family (in the event of the death of the employee), considering the current
salary and years of service accumulated at the date of the valuation, either because of voluntary redundancy, dismissal or
death. Subsequently, the present cost of the cost forecasted using this method is calculated annually.

The Post retirement employee benefits liability has been recorded considering the parameters annual employee turnover
rate, actual increases in salaries and adjustment rate determined.

Actuarial Assumptions

The main actuarial assumptions as at the reporting date of the financial statements are detailed as follows:
2022 2021

Mortality table RV-2014 RV-2014

Actual annual interest rate 6.73% 4.90%
Incorporation of disability/accidents Not considered Not considered
Retirement age for women 60 years 60 years
Retirement age for men 65 years 65 years

Reasonably possible changes in relevant actuarial assumptions at the reporting date, to the extent that the other assumptions
remain constant, would have affected the severance indemnity payment obligation by the amounts included in the table below.

Effect in thousands of US$ 2022 2021

Increase Decrease Increase Decrease

Discount rate (change of 1%) 15,807 8,598 13,526 11,503

26 Financial Statements
15. Provision continued

Provision reconciliation.
Employee Restoration Restructuring Post-retirement Other Total
benefits and employee
rehabilitation benefits
US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

Opening balance as of January 1, 2022 76,362 508,835 58 119,310 10,912 715,477

Amount capitalised - 194,809 - - - 194,809
(Debit)/credit for the year:
Increases/ (decreases) 68,382 - - 57,104 (4,946) 120,540
Loss taken to equity including actuarial losses - - - (16,673) - (16,673)
Effect of change in discount rate - 64,226 - 7,201 - 71,427
Effect of foreign currency translation difference 3,155 - - (1,528) (500) 1,127
Payments (86,277) (7,151) - (44,499) - (137,927)
Transfer - - - - - -
Ending balance as of Dec 31, 2022 61,622 760,719 58 120,915 5,466 948,780

Employee Restoration Restructuring Post-retirement Other Total

benefits and employee
rehabilitation benefits
US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

Opening balance as of January 1, 2021 69,963 587,477 176 167,316 6,515 813,447
Amount capitalised - (103,012) - - - (103,012)
Debit/(credit) for the period:
Increases/ decreases 103,045 - - 53,986 5,385 162,416
Actuarial gains/losses taken to equity - - - (40,057) - (40,057)
Effect of discount rate - 28,011 - 7,899 - 35,910
Effect of foreign currency translation difference 2,817 - (3) (37,381) 565 (34,002)
Payments (99,463) (3,641) (115) (32,453) (1,553) (137,225)
Ending balance as of Dec 31, 2021 76,362 508,835 58 119,310 10,912 715,477

Financial Statements 27
 16. Equity

Paid-in capital is reconciled as follows:

2022 2021
US$’000 US$’000

Opening capital (a) 62,308 62,308

Capitalisation of retained earnings by public deed dated:
July 27, 1988 1,497 1,497
October 7, 1988 22,877 22,877
February 6 ,1989 6,110 6,110
April 7, 1989 6,013 6,013
March 30, 2001 161,000 161,000
December 21, 2001 196,700 196,700
October 15, 2002 (absorption of SCM Escondida) 4,597 4,597
December 19, 2002 53,400 53,400
December 30, 2003 16,700 16,700
December 30, 2004 16,700 16,700
December 30, 2005 50,000 50,000
December 30, 2006 50,000 50,000
December 30, 2009 83,340 83,340
April 26, 2013 200,000 200,000
Total 931,242 931,242

(a) The Group’s opening capital of ThUS$ 62,308 was contributed by the former partners of Minera Utah SCM de Chile Inc.
and Getty Mining (Chile) Inc., and relates to property, plant and equipment, cash advances and exploration expenses. The
subscribed capital is fully paid, which corresponds to ThUS$ 931,242 as of December 31, 2022 and 2021, corresponding to a
capital of a limited liability Group.

As at December 31, 2022 and 2021, dividend distributions are detailed as follows:

Ownership 2022 2021

% US$’000 US$’000

BHP Escondida Inc. 57.5 1,558,825 2,633,500

Rio Tinto Escondida Limited 30 813,300 1,374,000
JECO Corporation 10 271,100 458,000
JECO 2 Ltd. 2.5 67,775 114,500
Total Dividend 100 2,711,000 4,580,000

28 Financial Statements
16. Equity continued

As at December 31, 2022 and 2021, dividends distributions were approved by resolution signed by each owner as detailed
below:

Date of resolution for Date of payment of Total

payment of dividends dividend US$’000

14-Feb-22 28-Feb-22 1,061,000

16-May-22 20-Jun-22 900,000
10-Aug-22 30-Aug-22 500,000
22-Nov-22 29-Nov-22 250,000
Total 2,711,000
15-Feb-21 25-Feb-21 1,100,000
13-May-21 28-May-21 1,300,000
8-Sep-21 28-Sep-21 1,550,000
17-Nov-21 29-Nov-21 630,000
Total 4,580,000

17. Contingencies
The Group conducts a quarterly analysis of the record of pending lawsuits and the assessment of the associated outflows or
inflows using the following categories: Probable – possibilities of more than 50% of occurrence of a disbursement; Possible –
possibilities between 10% and 50% of occurrence of a disbursement; Remote – less than 10% of occurrence of a disbursement.
As of December 31, 2022, the Group does not have any material contingencies.

18. Commitments
2022 2021
US$’000 US$’000

Commitments
Expenses expiring over the next 12 months 2,352,412 2,731,862
Expenses expiring between 1 and 2 years 1,644,479 1,911,531
Expenses expiring between 2 and 3 years 1,000,764 1,065,217
Expenses expiring between 3 and 4 years 911,221 769,436
Expenses expiring between 4 and 5 years 671,587 686,072
Expenses expiring in more than 5 years 3,330,519 4,208,049
Total commitment 9,910,982 11,372,167

(a) Lease commitments

Expenses expiring over the next 12 months 83,939 79,872
Expenses expiring between 1 and 2 years 77,416 64,432
Expenses expiring between 2 and 3 years 72,072 61,884
Expenses expiring between 3 and 4 years 59,566 60,091
Expenses expiring between 4 and 5 years 59,566 59,566
Expenses expiring in more than 5 years 238,265 297,832
Total Lease commitments 590,824 623,677

(a) These commitments are primarily associated with contracts with suppliers and investment project contracts.

Financial Statements 29
 19. Cash and cash equivalents
(a) As of December 31, 2022 and 2021, cash and cash equivalents consist of the following:
2022 2021
US$’000 US$’000

Cash and cash equivalents

Bank balances 385,994 571,155
Short-term deposits - 300,000
Total cash and cash equivalents 385,994 871,155

Cash and cash equivalents consist of bank balance and short-term deposits with an initial term of less than one month in term
deposits and financial instruments issued by commercial institutions. For the purpose of the statement of cash flows, the Group
considers all highly liquid fixed income instruments with original maturities of three months or less to be cash equivalents.

(b) The details of cash and cash equivalents by type of currency is as follows:

2022 2021
US$’000 US$’000

Cash and cash equivalents Ch$ 35,563 13,069

Cash and cash equivalents US$ 350,431 858,086
Total cash and cash equivalents 385,994 871,155

There is no restriction on any cash and cash equivalents.

30 Financial Statements
20. Financial risk management

The Group is exposed to the following financial risks:

• Market risk
• Liquidity risk
• Credit risk

Risk management framework

The Management of Escondida is responsible for supervising the risk management framework. The Board of Directors is
responsible for developing and monitoring the Group’s risk management policies.

The Group has risk policies focused on identifying and analysing risks to which it is exposed, setting limits and risk controls
to monitor risks and compliance. Risk management policies and systems are reviewed on a regular basis to ensure that they
reflect changes in market conditions and the Group’s activities. The Group, through its management standards and procedures,
supports a disciplined and constructive control environment in which all employees understand their roles and obligations.

Market risk
Market risk is the risk that changes in market prices; e.g., market interest rates, commodity prices and foreign exchange rates
will affect the Group’s income or the value of its holdings of financial instruments.

The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while
optimising the return.

Interest rate risk

The Group is exposed to interest rate risk on its outstanding borrowings from the possibility that changes in interest rates will
affect future cash flows or the fair value of variable interest rate financial instruments.

On the basis of the net debt position as of December 31, 2022, it is estimated that one percentage point increase in the SOFR
interest rate would decrease the Group’s profit after taxation and equity by ThUS$ 21,229 (as of December 31, 2021: ThUS$
22,536). This assumes that the change in interest rates is effective from the beginning of the financial year and the fixed/floating
mix and the balances are constant over the year.

The detail of the effect of the variation of 1% in the rate for loans in 2022 and 2021 is as follows:

2022 2021
US$’000 US$’000

1% rate variation effect

Loans - international banks 21,229 22,078
Other loans - 458
Total variation 21,229 22,536

Foreign currency risk

The US dollar is the functional currency of the Group’s operations and as a result, currency exposure arises from transactions
and balances in currencies other than the US dollar. The Group’s potential currency exposures comprise transactional exposure
in respect of non-functional currency monetary items and expenditure.

The following table shows the foreign currency risk on the assets and liabilities of the Group’s operations denominated in
currencies other than the functional currency of the operations as of December 31, 2022 and 2021:

2022 2021
US$’000 US$’000

Functional currency - US dollar

Cash and cash equivalents 35,563 31,492
Trade and other receivables, current 95,298 49,429
Trade and other receivables, non-current 8,222 7,585
Trade receivables due from related parties, current 9,711 24,149
Trade and other payables, current (375,354) (273,926)
Trade payables due to related parties, current (2,084) (57,904)
Provisions, current (42,300) (51,802)
Provisions, non-current (710,152) (578,451)
Total (981,096) (849,428)

Financial Statements 31
 20. Financial risk management continued

The Group’s foreign currency risk is managed as part of the portfolio risk management strategy.

The principal non-functional currency to which the Group is exposed to is the Chilean peso. On the basis of the Group’s net
financial assets and liabilities, as of December 31, 2022 and 2021, a weakening/strengthening of the United States dollar against
this currency as shown in the table below, holding other inputs constant, could affect post-tax profit and equity as follows:

Currency movement 2022 2021

US$’000 US$’000
Post-tax profit Equity Post-tax profit Equity

Variation of + $10 8,028 8,028 6,956 6,956

Variation of - $10 (8,218) (8,218) (7,124) (7,124)

The foreign exchange rate used as of December 31, 2022 was Ch$855.86 per US$1 (Ch$844,69 per US$1 as of December 31,
2021).

Commodity price risk

Contracts for the sale and physical delivery of commodities are executed whenever possible on a pricing basis intended to
achieve a relevant index target. While the Group has succeeded in transitioning substantially all of the Group commodity
production sales to market-based index pricing terms, derivative commodity contracts may from time to time be used to align
realised prices with the relevant index. Contracts for the physical delivery of commodities are not typically financial instruments
and are carried in the balance sheet at cost (typically at US$ nil); they are therefore excluded from the fair value and sensitivity
analysis. Accordingly, the financial instrument exposures set out below do not represent all of the commodity price risks
managed according to the Group’s objectives. Movements in the fair value of contracts included are offset by movements in the
fair value of the physical contracts; however, only the former movement is recognised in the Group’s income statement prior to
settlement. The risk associated with commodity prices is managed as part of the portfolio risk management strategy.

Provisionally priced commodity sales and purchases contracts

Provisionally priced sales or purchases volumes are those for which price finalisation, referenced to the relevant index, is
outstanding at the reporting date. Provisional pricing mechanisms embedded within these sales and purchases arrangements
have the character of a commodity derivative and are carried at fair value through profit and loss as part of trade receivables or
trade payables. The Group’s exposure at 31 December 2022 to the impact of movements in commodity prices upon provisionally
invoiced sales and purchases volumes was predominately around copper.

The Group had 319 thousand tonnes of copper exposure at 31 December 2022 (2021: 291 thousand tonnes) that was
provisionally priced. The final price of these sales or purchases will be determined during the first half of the 2023 calendar year.
A 10 per cent change in the price of copper realised on the provisionally priced sales, with all other factors held constant, would
increase or decrease profit after taxation by US$59 million (2021: US$197 million). The relationship between commodity prices
and foreign currencies is complex and movements in foreign exchange rates can impact commodity prices. The sensitivities
should therefore be used with care.

Liquidity risk
The Group’s liquidity risk arises from the possibility that it may not be able to settle or meet its obligations as they fall due and
is managed as part of the Group’s Financial Funding Framework. Operational and capital requirements are considered in the
management of liquidity risk, in conjunction with short-term and long-term forecast information.

Recognising the cyclical volatility of operating cash flows, the Group has defined minimum target cash and liquidity buffers to
be maintained to mitigate liquidity risk and support operations through the cycle.

The Group’s strong credit profile, diversified funding sources, its minimum cash buffer and its committed credit facilities ensure
that sufficient liquid funds are maintained to meet its daily cash requirements. Only counterparties of an investment grade
standing are used for the investment of any excess cash.

Moody’s maintained their credit rating of Baa1 with a stable outlook.

There were no defaults on the Group’s liabilities during the year.

The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the
impact of netting agreements as of December 31, 2022 and 2021.

32 Financial Statements
2022 Bank loans and other loans Future interest Other liabilities Total
US$’000 payments US$’000 US$’000 US$’000

Maturity date
in 1 year or less (62,896) (87,130) (671,312) (821,338)
1 - 2 years (349,448) (175,100) (179) (524,727)
2 - 3 years (573,322) (163,728) - (737,050)
3 - 4 years (75,961) (119,233) - (195,194)
4 - 5 years (931,883) (114,230) - (1,046,113)
Over 5 years (853,435) (161,963) - (1,015,398)
Total (2,846,945) (821,384) (671,491) (4,339,820)
Balance as of Dec 31, 2022 (2,846,945) (821,384) (671,491) (4,339,820)

2021 Bank loans and other loans Future interest Other liabilities Total
US$’000 payments US$’000 US$’000 US$’000

Maturity date
in 1 year or less (41,962) (100,079) (413,311) (555,352)
1 - 2 years (463,328) (58,631) (276) (522,235)
2 - 3 years (905,082) (53,126) - (958,208)
3 - 4 years (963,806) (40,700) - (1,004,506)
4 - 5 years (55,961) (25,078) - (81,039)
Over 5 years (284,127) (52,971) - (337,098)
Total (2,714,266) (330,585) (413,587) (3,458,438)
Balance as of Dec 31, 2022 (2,714,266) (330,585) (413,587) (3,458,438)

It is not expected that the cash flows included in the maturity analysis will occur significantly earlier, or significantly later than
the settlement date.

Amounts disclosed in the above table include the undiscounted contractual payments and accordingly, they will not always
reconcile to the amounts presented in the statement of financial position.

Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading
to a financial loss. The Group is exposed to credit risk from its operating activities (primarily from customer receivables) and
from its financing activities, including deposits with banks and financial institution.

Credit risk can arise from the non-performance by counterparties of their contractual financial obligations towards the
company. The majority of sales year on year are from a relatively small group of customers, which increases the Group’s
exposure to concentration of credit risk. However, to manage credit risk, the company maintains procedures and policies to
mitigate this risk including, but not limited to, the application for credit approvals, granting and renewal of counterparty limits,
proactive monitoring of exposures against these limits and requirements triggering secured payment terms. As part of these
processes, the credit exposures with all counterparties are regularly monitored and assessed. The credit quality of the Group’s
customers is reviewed and the solvency of each debtor and their ability to pay on the receivable is considered in assessing
receivables for impairment.

(a) Counterparties
The Group’s credit risk exposures are categorised according to transactions with the following main types of counterparties:

• Receivables counterparties – the terms of payment on the sales to the Group’s customers are generally limited to 30 days.
• Derivative counterparties – counterparties to derivative contracts consist of a diverse number of financial institutions and
industrial counterparties in the relevant markets.
• Cash investment counterparties – the Group holds short-term cash investment with approved financial institutions.

The Group has no significant concentration of credit risk with any single counterparty or group of counterparties.

The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer.

Financial Statements 33
 20. Financial risk management continued

Each new customer is analysed individually for creditworthiness before the Group’s standard payment and delivery terms and
conditions are offered. The review includes external ratings, when available, and in some cases bank references. Purchase limits
are established for each customer, which represent the maximum open amount. These limits are reviewed regularly. Customers
that fail to meet the benchmark creditworthiness may transact only on a prepayment basis.

Goods are sold subject to retention of title clauses, so that in the event of non-payment security is retained. The Group does not
require collateral in respect of trade and other receivables.

The balances of the trade receivables as of December 31, 2022 and 2021 include the provisional invoices issued for copper
concentrate and copper cathode shipments. Such invoices are based on the weight measured by the Group and on the tests
subject to review and final agreement by the customers. According to the terms and conditions of the sales contracts, the final
price received will also be dependent on the copper prices quoted on independent metal exchanges, including the LME, during
the future quoting periods applicable to each delivery. As of December 31, 2022 and 2021, provisional invoicing agreement sales
have been valued according to the future prices.

There is also an embedded derivative regarding refining treatment price participation clauses (included in certain contracts) in
the concentrate mineral sales contracts which does not qualify for hedge accounting.
The Group’s maximum exposure to credit risk at the reporting date and the ageing of current and non- current receivables at the
reporting date is as follows:

2022 Gross amount Not past due Less than 30 days Aging of receivables
US$’000 US$’000 US$’000 31 - 60 days 61 - 90 days Over 90 days
US$’000 US$’000 US$’000

Trade receivables 901,572 901,572 - - - -

Other receivables 267,942 182,525 80,949 (340) 1,509 3,299
Total 1,169,514 1,084,097 80,949 (340) 1,509 3,299

2021 Gross amount Not past due Less than 30 days Aging of receivables
US$’000 US$’000 US$’000 31 - 60 days 61 - 90 days Over 90 days
US$’000 US$’000 US$’000

Trade receivables 716,240 716,240 - - - -

Other receivables 219,243 213,755 - 57 195 5,236
Total 935,483 929,995 - 57 195 5,236

The expected credit loss on the Group’s trade and other receivables is immaterial as at December 31, 2022.

During 2022 and 2021 no renegotiation of the terms and conditions of receivables has occurred.

Fair value
All financial assets and financial liabilities, other than derivatives, are initially recognised at the fair value of the consideration
paid or received, net of transaction costs applicable and, subsequently at fair value or amortised cost, as indicated in the tables
below.

Derivatives are initially recognised at fair value at the date in which the contract is entered into and subsequently measured at
fair value.

Financial assets and financial liabilities are presented by type in the tables below at their carrying amount, which, in general,
approximates their fair value.

34 Financial Statements
Financial assets and liabilities
IFRS 9 2022 2021
Classification US$’000 US$’000

Fair value hierarchy1

Cash and cash equivalents Amortised cost 385,994 871,155
Trade and other receivables2 Amortised cost 129,132 87,239
Trade and other receivables due from related parties Amortised cost 9,013 23,863
Provisionally price trade receivables Fair value through profit and loss 901,572 716,240
Total financial assets 1,425,711 1,698,497
Non-financial assets 13,122,745 12,710,626
Total assets 14,548,456 14,409,123
Current other financial liabilities 5
69,871 68,425
Non-current other financial liabilities 5
434,674 498,721
Total other financial liabilities 504,545 567,146
Trade and other payables3 Amortised cost 670,363 413,585
Trade and other payables due to related parties Amortised cost 124,011 192,405
Interest bearing liabilities - Bank loans 2
Amortised cost 2,460,467 2,194,574
Interest bearing liabilities - Leases liabilities Amortised cost 438,196 444,613
Total financial liabilities 4,197,582 3,812,323
Non-financial liabilities 2,342,672 2,786,236
Total liabilities 6,540,254 6,598,559

(1) All of the Group’s financial assets and financial liabilities recognised at fair value were valued using market observable inputs
(2) Excludes input taxes of ThUS$138,810(31 December 2021: ThUS$132,004) included in other receivables - see note 10 Trade and other receivables.
(3) Excludes input taxes of ThUS$1,128 (31 December 2021: ThUS$2) included in other payables - see Note 15 Trade and other payables.
(4) All interest bearing liabilities, excluding leases liabilities, are unsecured.
(5) Other financial liabilities related to settlement of all liabilities associated with Power Purchase Agreement (PPA) with Angamos plant payable in nine
annual payment commencing in August 2021.

Capital management
The Group’s capital management policy is exclusively restricted by the covenants established in the loan agreements with
foreign banks. The net worth of the Group may not be less than ThUS$ 900,000, measured upon completing the corresponding
12-month calendar period.

The return on capital is measured regularly and its interpretation is according to the market scenario, production restrictions
and LME copper prices, among other variables.

The dividend policy is analysed by Management according to the profitability of the periods and cash flow requirements.
These requirements are strongly impacted by the Group’s capital projects, normal debt to creditors and taxes. Additionally,
precautions must be adopted before any eventual commodity price drops and their possible impact on a negative cash flow
outcome that might force payments to customers.

The financial debt/equity ratio, calculated by the Group at the end of the balance period is detailed as follows:

2022 2021
US$’000 US$’000

Total liabilities 6,540,254 6,598,559

Less: Cash and cash equivalents (385,994) (871,155)
Net debt 6,154,260 5,727,404
Net equity 8,008,202 7,810,564
Financial debt / equity ratio 77% 73%

Financial Statements 35
 21. Other financial liabilities

2022 2021
US$’000 US$’000

Current
Angamos early term settlement 69,871 68,425
Total other financial liabilities - current 69,871 68,425

Non-current
Angamos early term settlement 434,674 498,721
Total other financial liabilities - non-current 434,674 498,721

22. Compensation of key management personnel

2022 2021
US$’000 US$’000

Payroll and bonuses (short-term employee benefits) 6,772 7,387

Total 6,772 7,387

Compensation of key management personnel in relation to share based payments ThUS$792 as at 31 December 2022
(ThUS$778 as of December 31, 2021) a recharge in total from the parent entity.

23. Guarantees
(a) Guarantees granted
The guarantees granted by the Group as of December 31, 2022 amounted to ThUS$ 568,972, which mainly relate to bank
guarantee required by National Service of Geology and Mining (SERNAGEOMIN) for closure of mining works to comply with
the requirement established in Law Nº20.551. The other guarantees, different from closure guarantees, are mainly issued in
favour of the Government, to cover potential environment issues that may arise in the construction of certain projects under
development.

(b) Guarantees received

The guarantee received as of December 31, 2022 amounted to ThUS$ 21,406 which are intended to ensure compliance of the
conditions agree with the supplies.

24. Subsequent events

During the period between January 1, 2023 and the date of issuance of these financial statements, no significant events have
occurred that require adjustments or additional disclosures to the financial statements.

36 Financial Statements
Consolidated
Financial Statements
Minera Escondida Ltda.
Santiago, Chile
As of December 31,
2022 and 2021