2010 Sustainable Development Report

Resolution Copper continued to make progress toward developing the world’s third largest undeveloped copper resource. In the process, we made strong contributions to our host communities, including adding in excess of $14 million to the local economy through jobs, hiring local contractors and purchasing materials, goods and services. We also invested in our host communities in ways that our stakeholders say are important to them, including support of area schools to help develop the science, technology, engineering and math skills required of our future workforce.

The dewatering process of the former Magma Mine progressed and in 2010 we treated and transported more than one billion gallons of reclaimed water for use by Arizona farmers for crop irrigation. Here’s a look at specific successes and challenges in 2010:

Health & Safety

The safety of our employees and contractors is our highest priority.

Resolution Copper received a Sentinels of Safety award for the second year in a row from the US Department of Labor’s Mine Safety and Health Administration and the National Mining Association. We qualified for this recognition by working 65,375 employee-hours in 2009 without a lost-time injury.

The Office of the Arizona State Mine Inspector recognized Resolution Copper for completing 2009 without a single lost-time injury.

Our contractors worked 589,360 hours in conjunction with our employees without a lost-time injury.

We completed a Semi-Quantitative Risk Assessment (SQRA) for the Resolution Copper site. This process allows us to develop action plans to reduce the risk potential of known hazards. The estimated overall critical risk score was one fatality every 50 years. When we implement control actions identified in the SQRA process, the risk score will be reduced by 37.2 percent, or one fatality every 80 years.

We completed 31 Level 2 risk assessments in the East and West plants, necessary for potentially hazardous equipment and activities.

We completed three Milestone Implementation Plans for Shaft 10, including safety and health guidelines for this proposed exploration shaft. The plans cover blind-sinking activities to sink the shaft from 1,900 feet to 3,000 feet below the surface.

Community Involvement

We invested $80,000 in 2010 in schools and students in the Copper Triangle area. We partner with schools to promote interest and excellence in math, science technology and engineering—all critical skills for our future workforce.

We increased our communication via social media in 2010 as part of our ongoing efforts to reach stakeholders wherever they seek and receive information. This included blogs, Facebook, Twitter and YouTube along with interactive options on SecureArizonasFuture.com, our website dedicated to educating stakeholders about the Resolution project.

We commissioned telephone surveys of residents in Congressional District 1 and the Copper Triangle area to learn what’s important to our stakeholders. Results showed strong and increasing support for our project, and that jobs, economic revitalization and education are of critical concern to our stakeholders.

We hosted two community information sessions and various other events on topics of concern to local stakeholders. These sessions were well received and well attended.

We launched an Education Advisory Committee to ensure the ongoing success of our education initiatives and to identify education programs and opportunities at elementary, secondary, trade and university levels that support the development of a sustainable workforce.

We renewed a five-year partnership to support development of the Arizona Trail. This renewed partnership focuses on construction of the Legends of the Superior Trail (LOST), part of the Arizona Trail.

Environment

By year end 2010, we delivered more than 1.14 billion gallons of treated reclaimed water from the closed Magma Mine to the New Magma Irrigation and Drainage District for crop irrigation.

We received a prestigious Crescordia award for environmental excellence from Valley Forward for our water treatment and recovery system.

We continued regional hydrology studies and additional work to develop a sustainable water plan.

To help us preserve and protect Arizona’s ecological resources, we began development of a detailed biodiversity strategy and management plan. Developing the plan involves studying the area’s biodiversity, assessing how historic mining operations have affected plant and animal species, studying the likely effects of our project on the natural ecology and identifying ways to manage any risks.

We maintained ISO 14000:2004 certification and regulatory compliance through independent audits and inspections.

We continued our involvement with organizations that protect and preserve the environment and the species that populate Superior-area lands, including Arizona Trail Association, Audubon Arizona, Boyce Thompson Arboretum and Lower San Pedro Working Group.

We enhanced our Health, Safety and Environmental Management System (HSE MS). It features a new methodology and a structure consistent with common international standards. Our HSE MS was successfully audited in 2010 to ensure conformity with Rio Tinto’s practices.

We recycled 45 tons of material and sponsored and participated in community-wide cleanup events.

Socio-Economic

Wages and salaries totaled $7.5 million in 2010.

We spent approximately $89.8 million on materials, goods and services, including $6.9 million in Superior and the surrounding areas.

We contributed $239,950 in support of our host communities and partnerships, including $80,000 toward educational efforts.

Land Exchange

Passage of the land exchange legislation is critical to the advancement of the Resolution Copper project. We are committed to securing passage to ensure that local and regional communities and the state do not lose the full economic and social benefits the project will provide.

The legislation will give Arizonans more than 5,500 acres of environmentally valuable land in exchange for the land Resolution Copper needs to move forward with the mine.

It is a powerful job stimulus bill, ensuring thousands of new jobs with no incentives or taxpayer investment.

On March 18, 2010, Congresswomen Ann Kirkpatrick introduced complementary legislation HR 4880 into the House of Representatives. The revised legislation reflects changes agreed to by bipartisan members of the Senate Committee on Energy and Natural Resources. This followed the introduction of S 409 in December 2009.

While Congress has not yet approved the land exchange legislation, we still made progress and maintained stakeholder support in 2010.

2010 Challenges

We experienced several minor safety incidents in 2010. Nothing is more important to our project than the safety and well-being of our workforce. We continue to steadfastly maintain and improve our safety procedures and safeguards to prevent further incidents.

Our local hire rate was 23 percent in 2010. We did not achieve our 40 percent local hiring goal due to the need for highly specialized workers for our pre-feasibility work and environmental testing.

One of our highest priorities is the passage of the land exchange legislation. While we are disappointed that the legislation did not pass in 2010, we continue to work closely with Arizona’s congressional delegation toward passage in 2011.