SMI: Investing in a Sustainable Future

Mining Philippines 201016 September 2010

Mark Williams

General Manager

The Tampakan Copper-Gold Project

• One of the largest undeveloped copper-gold deposits in Southeast Asia

• Potential to become the largest mine in the Philippines and the fifth largest copper mine in the world

• Capital investment for mine and related infrastructure in excess of USD5B

• 20+ years mine life

Proposed Project Location

Current Progress: ESIA

Milestones 2009 2010 2011

Mine ESIA

Power station, port and filter plant ESIA

Concentrate pipeline,electricity transmission system and access roads ESIA

GDP impact of the Tampakan Copper-Gold Project

• Revenue stream to the Philippine economy is estimated at USD40 billion over the life of the mine

• Potential to increase the country’s gross domestic product (GDP) by an average of 1% per year for 25 years

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034

% o

f P

hilip

pine

s G

DP

Other (tax)

Other VA

Mining VA

Investment

Data Source: Centre for International Economics, July 2010 (Based on MPFS assumptions of April 2010)

Opportunities for Business and Employment

• Potential to create 10,000 jobs during the construction, and over 2,000 when the mine starts to operate

• USD5.8 billion in taxes and duties would be remitted to the Philippine government

• USD881 million to be spent on goods and services -- in the Philippines alone -- during the construction period

• USD892 million to be spent on Philippines goods and services over the initial operations phase

49%

21%

19%

4%7%

Local

Wages

Catering

Limestone

Contractors

Maintenance

and Others

Breakdown of economic opportunities

Opportunities and Challenges

• Passage of the South Cotabato Environment Code with a ban on open pit mining methods in the province remains a major concern

• SMI values the continuing stakeholder support to SMI and the Project

• RDC XII’s declaration of Tampakan as flagship mining project of the region

• South Cotabato IP Community

• Host communities

Opportunities and Challenges

• Stakeholders’ better understanding of the project and how it may affect their lives

• Timely resolution on the opposing views regarding open pit mining methods through a continuing open and transparent engagement and dialogue with all parties concerned

• Heightened communication and engagement activities to enable stakeholders arrive at an informed decision on the Project

Foundations for Investment

• Public-Private Partnership Policy of the Government

• Six priority areas pinpointed by NEDA to spur growth and development:

• housing

• mining

• electronics

• business process outsourcing

• tourism

• agri-business

• 2010-2014 Philippine Investments Promotion Plan (PIPP) drawn up by the Department of Trade and Industry focuses on eight key sectors included Mining

Moving Forward

• Submission of ESIA for proposed mining operation in 1H 2011

• Finalization of ESIAs for supporting infrastructure and facilities in 2H 2011

• Securing Free and Prior Informed Consent from host Indigenous communities

• Community consultations for resettlement

Our Commitment to Sustainable Development

• We balance social, environmental and economic considerations in how we manage our business

• In 2009, SMI contributed more than PHP 1.3 billion to the Philippine economy and invested more than PHP 79 million on community development initiatives

• SMI publicly reports on its SD performance

• SD reports published annual and preparedin accordance with the Global Reporting Initiative (GRI) guidelines

Thank You