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Las Bambas rail transportation agreement signed

MMG Limited (MMG) is pleased to announce that Minera Las Bambas S.A (Las Bambas), its non-wholly owned subsidiary, has entered into a rail agreement with Perurail S.A. (Perurail) for the transportation of Las Bambas copper concentrates.

The agreement with Perurail provides for the transportation of concentrates by rail from Pillones transfer station to the Port of Matarani, a distance of approximately 295 kilometres. The agreement is expected to commence on 1 January 2016 for a period of 15 years with an option to renew for a further 15 years.

The estimated total consideration payable by Las Bambas for the provision of the rail services during the initial 15-year term is US$489.3 million.

MMG Chief Executive Officer Andrew Michelmore said, “Safety is our first value at MMG.

“By using rail transportation where available we will significantly reduce heavy vehicle traffic between Pillones and the Matarani Port – improving safety conditions for communities and reducing congestion.”

To ensure equipment is in place to meet the project timetable, Las Bambas has previously entered into purchase contracts for rail wagons, containers, turning equipment and locomotives. This equipment will be purchased by Perurail with the consideration (total cost US$76.1 million) payable by Perurail to Las Bambas before the initial term commences.

Truck haulage services will be separately provided by an independent third party to transport the concentrate from the Las Bambas project to the Pillones transfer station, for onwards transport by rail.

Construction of Las Bambas continues to progress to plan with the overall project 90% complete at the end of March 2015. Current activity is focused on the primary crusher, overland conveyor, concentrate processing plant, concentrate logistics and other key infrastructure.

Located in Cotabambas, Apurimac region of Peru, Las Bambas is a large, long-life copper development project. When in operation, it is expected to become one of the top three copper producing mines in the world.

Las Bambas is a joint venture project between the operator MMG and wholly owned subsidiaries of each of Guoxin International Investment Co. Ltd and CITIC Metal Co. Ltd.

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