Investors Corporate Responsibility Operations & Development News TSX:LUN OMX:LUMI

Home Careers Contact

Corporate Responsibility

• Performance Highlights and Objectives
• Corporate Commitment
• Governance and Ethical Conduct
• Environment
• Material Inputs
• Energy Use
• Greenhouse Gas Emissions
• Potential Financial Implications of Climate Change
• Energy Conservation
• Water Management
• Land Use & Biodiversity
• Environmental Incidents
• Waste Management
• Waste Rock
• Tailings Management
• Mine Closure
• Remediation
• Product Responsibility
• Environmental Expenditure
• Health and Safety
• Social
• Tenke Fungurume (DRC)
• Reports
• Stakeholder Feedback

Environment

Some of these impacts include land use changes, environmental degradation and population influx, offset by increased economic opportunities and development in the areas of infrastructure, health and education. We operate under the Precautionary Principle throughout the life of a mine. This involves the use of baseline assessment tools and conducting environmental and social impact assessments; evaluating how to avoid, mitigate or control potentially significant impacts; implementing appropriate monitoring and management systems; and addressing the requirements for mine closure early in the life of the mine.

The Lundin Mining HSEC Management System applies throughout the full mining cycle from exploration to closure. To ensure that any impacts relating to exploration work are recognized and minimized, the Exploration Group has prepared a HSEC Manual to be used as a practical workplace guidebook. The Guidebook contains procedures to be followed by Exploration staff to conform to the Lundin Mining Group HSEC Policy and Standards, and advice and guidance on various aspects of safety and environmental management important for exploration activities. The Guidebook draws on the advice contained in the Prospectors and Developers Association of Canada E3-Plus Framework for Responsible Exploration and represents industry leading practices.



The Exploration Guidebook includes requirements for environmental protection, such as how to manage stream crossings and protect watercourses, as well as safety requirements, e.g. safe operation of drill rigs, diamond saws and other exploration equipment. The Guidelines are shared with, and are expected to be followed by contractors.

Material Inputs

Mining and metallurgical operations consume considerable quantities of materials. Lundin Mining recognizes that material intensity is both an environmental and a financial consideration. We continuously seek ways to improve both material efficiency and the costs associated with material flows.

The principal raw material input for a mining company is the ore mined. Other major raw materials are explosives and fuel, both quantified in this report; and mill reagents.

Both Neves-Corvo and Zinkgruvan have put in place plans to lower ammonia concentrations in water discharged from the mine by using emulsion explosives instead of ANFO (Ammonium Nitrate/Fuel oil).

Mine equipment at Aguablanca

Copper concentrate

Explosives (Tonnes)
	2007	2008	2009	2010
Neves Corvo
ANFO	904	1,128	802	224
Emulsion/Gel	429	429	2,858	2,365
Zinkgruvan
ANFO	199	283	127	139
Emulsion/Gel	567	578	791	990
Aguablanca
ANFO	2,586	3,089	1,959	4,180
Emulsion/Gel	269	476	275	464
Galmoy
ANFO	-	-	-	-
Emulsion/Gel	391	421	104	83
Total
ANFO	3,689	4,500	2,887	4,543
Emulsion/Gel	1,656	1,904	4,029	3,902

Energy Use and Conservation

Lundin Mining's concern is to ensure that each of our operations has access to a secure and cost-effective supply of energy. This is crucial for the continued operation and growth of our business. The reliability and affordability of energy supply can be affected by factors beyond our control, including increased demand, political, regulatory and economic uncertainties, and problems with local generation and transmission of power.

Energy costs continue to represent one of our most significant operating expenditures and, consequently, improving energy efficiency reduces the emission of greenhouse gases and equally improves our competitive positioning in a resource-constrained environment.

In 2010, overall electricity consumption declined slightly due to introduction of more energy-efficient equipment at Neves-Corvo and Zinkgruvan, as well as the reduced production level at Aguablanca and the progressive closure at Galmoy. This was offset slightly by increased production and hoisting of ore and waste at Neves-Corvo.

Our direct energy is derived from diesel and fuel oil used on site, and diesel used in transportation of products, as tabulated above. Diesel consumption on-site increased in 2010, primarily as a result of Aguablanca hauling more than 40% more waste rock out of the pit in 2010 compared with the previous year. Zinkgruvan used more than twice the previous year's amount of heating oil in 2010. Extreme winter conditions both at the beginning and end of 2010 required the use of additional fuel to heat buildings and the mine ventilation air.

This increase was partially offset by a reduction in diesel consumed in transportation. Galmoy trucked ore to a neighbouring mine for treatment, rather than transporting concentrate to the coast and Neves-Corvo ceased hauling concentrate by road to the Port of Huelva, in Spain.

Diesel On Site ('000 Litres)
	2007	2008	2009	2010
Neves-Corvo	4,886	5,292	5,092	5,996
Zinkgruvan	1,479	1,573	1,705	2,562
Aguablanca	6,908	9,307	7,143	12,511
Galmoy	742	775	401	350
Total	14,015	16,947	14,341	21,419

Diesel used in Transportation of Product ('000 Litres)
	2007	2008	2009	2010
Neves-Corvo	1,234	1,414	1,560	894
Zinkgruvan	339	338	319	325
Aguablanca	291	323	337	335
Galmoy	416	466	254	2
Total	2,280	2,541	2,469	1,556

Greenhouse Gas Emissions

Lundin Mining's long-term objective is to reduce both energy and greenhouse gas (GHG) intensity through energy efficiency improvements (and, if needed, through the use of carbon credits and offsets).

In 2010, total CO2 emissions decreased by 22% compared with the previous year, partly as a result of increases in efficiency factors for electricity generation in Portugal reducing the indirect emissions from Neves-Corvo. Increased waste rock being transported out of the mines at Neves-Corvo and Aguablanca resulted in increased direct emissions.

Most of the CO2 emitted in the production of concentrate is from indirect emissions from the generation of electrical power supplied through the national grid. The major influence is the grid efficiency factor for the generation of power. For example, Zinkgruvan derives its power from electricity generated from hydro-electric sources, while the other operations derive their electrical power from fossil-fuel burning power stations. Other influences on the amount of carbon dioxide produced relate to the mining method.

Greenhouse gas intensity is calculated by measurement of fuel used in transport and production and the amount of explosive used. CO2 emissions factors are applied. For indirect emissions, nationally provided efficiency factors for electricity production are used. The amount of CO2 associated with our activities is normalized to tonnes of concentrate produced. Overall, GHG intensity increased slightly over 2009 due to fixed energy requirements.

Potential Financial Implications of Climate Change

Risks and opportunities associated with climate change (particularly those with significant potential financial implications) at our Southern European operations have been explicitly considered. The potential influence of these changes on our operations is described below.

The Neves-Corvo underground mine is located in a semi-arid region in southern Portugal. The mine has a positive water balance and during the winter months the site discharges water. While the site had previously considered the possibility of becoming a zero discharge facility, the regional changes in rainfall over the past two years has rendered this objective no longer feasible.

Reduced rainfall and increased evaporation in the summer months will likely result in a drop in water level at the Santa Clara Reservoir which is a source of clean process water for the mine. Demands on the diminished resource by other users of the reservoir may result in reduced access by Neves-Corvo. While the long-term prediction is for reduced annual rainfall in southern Portugal, heavy rainfall events are expected with increased frequency during the winter months.

The Aguablanca open-pit mine, with an estimated remaining mine life of just over 5 years, is located in an arid region of Southern Spain north of Sevilla. The mine is designed to be a zero water discharge facility. Observed changes and long-term forecasts are for significantly reduced rainfall and higher evaporation rates. This will result in greater pressure being placed on available water supplies by all users in the region, including agricultural and municipal users. This may create difficulties for the mine to ensure sufficient access to water to operate the mill. Reduced rainfall may also affect mine site restoration activities by inhibiting the growth of plant covers on reclaimed areas and waste rock piles. As with Neves-Corvo, while overall precipitation will decline, the increased frequency of extreme rainfall events in the winter months in the Iberian Peninsula may cause accumulation of water in the pit which could affect mine production. This situation was experienced in the winter of 2009/10 causing pit flooding as well as the first snowfall in the area in 50 years.

Indirect consequences of climate change or legislation designed to limit its effects, such as requirements for participation in Emissions Trading Systems or other political influences, remain uncertain at this time and are being tracked closely.

Neves-Corvo is situated in the Mediterranean Oak Forest Biome - a region where biodiversity is threatened by climate change.

Solar Panels installed at Neves-Corvo

Energy Conservation Measures

Over the course of 2010, both Neves Corvo and Galmoy achieved notable energy efficiency improvements.

Neves-Corvo

Neves-Corvo maintains an active energy conservation program. Greenhouse gas intensity increased because much of the capital work, such as the Lombador access ramp, was developmental rather than production related. However, several successful energy reduction initiatives have been introduced at the site, including: the substitution of mechanical agitators with more efficient compressed air; installation of variable speed controls on pumps and ventilation fans; and the replacement of ballasts in fluorescent lights with more efficient units. New boilers equipped with solar panels were installed in 2009, bringing about a reduction of 24,000 litres of diesel in 2010, with a corresponding reduction of 65.5 tonnes of CO2 emissions.

Zinkgruvan

Zinkgruvan has experienced increasing energy costs over the past several years due to increased production and the increasing cost of fuel and electricity. The site has plans to engage consultants in 2011 to develop an energy use reduction plan including reduction targets.

Galmoy

In late 2009, a project task team was formed involving all departments at Galmoy Mine to focus on energy saving throughout the site.

The project commenced with the installation of an energy monitoring system which recorded real-time energy consumption capable of discriminating between underground and surface area power use which enabled high consumption areas to be identified as priorities for action.

Underground energy-saving initiatives were shown to present the highest cost savings opportunities. Most of the energy used underground goes to ventilate the mine workings and to pump water from the mine. The main extraction fans ventilating the working ore bodies were turned off during weekends and non-shift times and auxiliary fans were only used when required. Surveys were completed on underground satellite water pumping installations; pumps were replaced with lower power consumption units and pumping systems were configured to be more efficient.

Energy saving projects were completed at minimal cost in the surface processing area by focusing on more efficient use of lighting, including isolating areas requiring illumination and installing switches so that lights could be on only when required by operators in the area.

As the chart at top right illustrates, Galmoy has been successful in reducing power consumption for mining operations, achieving a 40% drop in power used while mine production reduced only 21%. The energy saving project is continuing through 2011 and will continue to focus on further reductions and improved efficiency.

Water Management: Availability, Use, Recycling and Discharge

Large volumes of water are used in the extraction and processing of minerals and metals. A key operational issue is the design and planning of facilities to provide sufficient water to support our mining operations. Water is scarce and competition among users for access to water is significant in the regions in which we mine in Portugal and Spain. At Lundin Mining, we plan in order to balance our operational needs with the needs of local communities, while recognizing potential impacts on sensitive ecosystems.

Water Availability

Water management has become an increasingly important concern for our Southern European operations. For the past two winters we have experienced considerably greater rainfall than has been usual. We must consider that this trend may continue. The table, below, showing rainfall at Aquablanca in each of the seasons since 2005, demonstrates the extreme rainfall conditions that have been experienced in Southern Europe in the winters of the past two years. The consequences of this increased rainfall were that Neves-Corvo pumped considerably more water from the mine and ran out of storage space on surface, requiring a controlled discharge. At Aquablanca, very high rainfall in the winter resulted in the pit flooding and the failure of the main ramp.
Changing regional weather patterns have required Sites to reconsider their water management plans including the objective at Neves-Corvo to become a zero-discharge facility.

Water Use and Recycling

In 2010, our fresh water use totaled an estimated 4.4 million cubic metres, a decrease of 10% from 2009. Our Sites used between 44% and 70% of recycled water in their mill and concentrator processes in 2010 -- very similar to the levels in 2009.

Water Use Intensity

Water use intensity (measured as Litres of water used per tonne of concentrate produced) shows an overall increase in 2010, attributable to increased mine de-watering and reduced levels of concentrate production.

Water Discharges

Our environmental management systems are designed to protect natural water sources. We actively monitor water quality to ensure that any offsite discharges do not adversely affect the environment. We additionally treat waste water to remove potentially harmful substances, such as metals, nitrogen compounds, sulphates or suspended solids.

Treated mine effluent from Neves-Corvo is discharged into the Oeiras River. The discharge is suspended between the beginning of June and the end of November, when there is a very low flow, or no flow in the River. There were occasionally, exceedances in pH, total nitrogen, total suspended solids and nitrites. Impact by sulphates and occasionally suspended solids has been observed at the point of discharge but the water quality quickly recovers. While these permit limits were exceeded at Neves-Corvo, biological effects monitoring in the Oeiras River shows that there has not been an adverse effect on the environment. This has been helped by the mine's practice of not discharging during the low flows of the summer months.

As a consequence of abnormally high rainfall experienced in the winter months in the past two years Galmoy experienced difficulty coping with the volume of discharge of mine water and with the management of water onsite. Discharge from the tailings management facility (TMF) was stopped because of high nitrite and ammonia levels in the water in the tailings. The high levels were the result of the mill (that reduced nitrite levels) being taken out of operation and also possibly a result of decomposition of compost in the tailings cover.

The decision not to release water to the environment resulted in the freeboard in the TMF becoming reduced to the point where there was a need to discharge to ensure overtopping did not occur. The completion of the cap on the tailings dam as part of the mine site reclamation will alleviate this problem in the future.

The high rainfall in Southern Europe resulted in Neves Corvo also having to discharge water, although the discharge was carried out with the approval of the regulator. Neither of these unplanned discharges resulted in environmental damage.

The change from ANFO to emulsion explosives in the mines has been effective in reducing the amount of nitrate discharged to the environment from mine water, as demonstrated by the chart below showing discharge of nitrate from Neves-Corvo.

Land Use and Biodiversity

Maintaining or enhancing biodiversity has taken on increasing importance in recent years. The world is witnessing an unprecedented loss of biodiversity in ecosystems around the globe. Some 10-30% of all mammal, bird, and amphibian species are threatened with extinction. Natural environments are under pressure from urban expansion, deforestation and agricultural practices, particularly the move to industrial scale monoculture. The changes in rainfall, runoff and temperature, amongst others associated with climate change, induce additional stresses on ecosystems and affect their viability, persistence and resilience.

Lundin Mining operates in a wide variety of environments in the European Union with varying degrees of ecological sensitivity. Before beginning to operate in a new area or making major changes to existing operations, baseline surveys are conducted to identify and record the existing biodiversity of the site and determine whether any threatened species, including species listed on the International Union for the Conservation of Nature (IUCN) Red List, or vulnerable ecosystems are present.

Some of our current operations are located in biodiversity-rich areas that contain endemic and threatened species. In such instances, the Company aims to avoid net losses or degradation of natural habitats, biodiversity and landscape functions such as watershed and microclimate management. It is also committed to rehabilitating and restoring landscapes once mining and exploration activities have ceased.

Land disturbance is an unavoidable consequence of mining. This consequence has the potential to have a negative impact on biodiversity if activities are not planned and executed in a thoughtful and responsible manner. Lundin Mining Corporation recognizes this need and has committed to assess the environmental effects of its activities and integrate these considerations into the Company's planning, operational decisions and processes throughout the life of our mines. Inevitably, exploration and mining will have some effect on landscapes. Impacts are minimized by removing as little topsoil and vegetation as possible and by rehabilitating sites (or part of a site) as soon as possible after activity has ceased. Waste rock dumps are covered and contoured to reduce the likelihood of acid rock drainage and to match local topography.In particular, care and thought has been given to enhancing biodiversity in our mine closure activities.

Lundin Mining strives to be a responsible steward of the lands that we manage. In total, we own, lease, or manage 3,276 hectares of land. As of year-end 2010, our footprint of disturbed and not yet rehabilitated land consisted of 1,237 hectares.

Land Management (Hectares)
	Neves-Corvo	Zinkgruvan	Aguablanca	Galmoy	Total
Total amount of land owned or managed	1,619	1,048	364	245	3,276
Total land disturbed and not yet rehabilitated	788	144	104	44	1,080
Total amount of land newly disturbed within the reporting period	--	--	205	5	210
Total amount of land newly rehabilitated within the reporting period to the agreed upon end use	--	--	45	8	53
Total land disturbed and not yet rehabilitated	788	144	264	41	1,237

Biodiversity Action Plans

Biodiversity plans are required at all Lundin Mining managed operations to protect and, where possible, enhance local ecology.

Neves-Corvo
The Neves-Corvo Biodiversity action plan is focused on increasing biodiversity in the vicinity of the mine by supporting neighbouring protected areas and efforts to reintroduce threatened bird species such as the Great Bustard.

Neves-Corvo participates in, and supports, several studies on the biological health and biodiversity of the Oeiras River which flows adjacent to the mine site. Although the river flows only during the wetter months, it is considered ecologically important. The site is permitted a discharge of treated water to the river during periods of high water flow and Neves-Corvo implements a rigid water quality control program as well as biological effects monitoring to ensure no adverse impacts are occurring.

Biomonitoring of the Oeiras River includes an evaluation of the riverside flora and a bird capture program including blood monitoring to see if they demonstrate any heavy metals uptake. Seepage or overflow ponds along the margins of tailings facilities creates local wetland habitat providing refuge for birds, insects and amphibia.

Bio-monitoring of the Oeiras River, is undertaken annually by the University of Coimbra, and shows that while the general biological health of the river is good there is some evidence that the effluent causes localized negative impacts on flora and fauna immediately downstream of the mine's discharge. To mitigate adverse impacts the mine stops discharge during the summer months, when there is little or no flow in the river. A new reservoir will increase water reuse on site, reducing discharge to the environment. Studies are underway to further reduce sulphate loadings.

The main biodiversity activities in which Neves-Corvo participated in 2010 were:

• In partnership with the Castro Verde League for the Protection of Nature, a conservation project for open grassland birds, including the Great Bustard, Little Bustard and Lesser Kestrel in the arable grasslands of the Biaxo Alentejo regioin.
• The development of a biodiversity management plan for the Guadiana Valley at the invitation of the Institute of Nature and Biodiversity Conservation.
• Working in cooperation with the Foundation of the Faculty of Sciences of the University of Lisbon, the evaluation of the biodiversity of lichens and vascular plants in the area surrounding the Neves-Corvo mine.
• The Saramugo minnow conservation project with the Institute of Nature and Biodiversity Conservation. This minnow is found in Spain and Portugal and has been Red Listed by the IUCN as endangered.
• Working with wildlife experts from the Guadiana Valley Natural Park, Neves-Corvo established artificial setts to provide a safe area for badgers which were abandoned by their parents during the construction of the paste project facility. Not only were the badgers successfully re-settled into the wild, but others have joined them. It is expected that a thriving colony will be established in the vicinity of the tailings area.

Electro-fishing to determine fish populations in the Oeiras River

Badgers reintroduced into the wild at Neves-Corvo

Zinkgruvan

The primary focus of Zinkgruvan's biodiversity activities has been on the biological health of Lake Vattern which, had historically, been used by previous mine owners to dump tailings from the mine. While this practice ceased decades ago, Zinkgruvan continues monitoring the lake for water quality.

An ecosystem inventory was undertaken in areas where Zinkgruvan plans to build a new tailings pond in 2017.The inventory identified four red-listed species, including a fungus that grows under tall trees, a fungus that lives on dead wood, lichen that grow on spruce branches and three varieties of moss. These findings will be considered in the tailings design process.



Aguablanca

The priority in the Aguablanca biodiversity action plan is a restoration plan for forest areas disturbed by mining. The objective of the plan is to re-establish a cover of native vegetation with major elements being Holm Oak (Quercus ilex) and Cork Oak (Quercus suber), both typical trees of Mediterranean Forest. Progressive rehabilitation of waste rock dumps affords an opportunity to revegetate them with local wildflowers or other vegetation providing habitat for songbirds and insects.

A nursery was created in 2004 as part of the commitments made in the mine's environmental impact assessment. Oak trees required for the mine's restoration plan are grown here from acorns. The nursery is run in partnership with a day centre, located in the town of Extramadura, which strives to integrate mentally handicapped people into society. The mine plans to plant 2,000 oaks on its remediated land.

Annually, the mine commissions a wildlife biodiversity study and a study of the fish and invertebrate life in the adjacent Cala River. No Red List species have been identified in the wildlife study, An annual report of possible effects on natural parks provides assurance that the operations of the mine are not having a negative impact on nearby national parks. The presence of Otter and Freshwater Mussels in the Cala River attest to the water quality in the river.

Aguablanca has sponsored the construction of nest boxes for Peregrine Falcons on the pylons supporting the power line into the site in the Sierra de Aracena y Picos de Aroche Nature Reserve. A field guide to the birds of the reserve has been produced in collaboration with park authorities.



Galmoy

The central element of Galmoy's biodiversity action plan is the creation of diversified habitat and land use post-closure.

The discharge from the Galmoy mine goes into the Goul River. An ecological assessment was conducted before mining commenced and has been repeated annually for over 15 years to assess the health of aquatic fauna such as salmonid fish, freshwater crayfish, insect communities as well as aquatic plants. The water and sediment chemistry has also been assessed annually to detect any contamination providing a possible route of bioaccumulation by plants and other organisms living in the rivers.

The annual monitoring conducted in relation to the mining activities over the past 15 years provides extensive ecological information on how the discharge may have affected these important aquatic habitats.

It is clear from long-term trends that there has been an accumulation of heavy metals in the sediments at the discharge point and downstream, and that these are elevated in comparison to baseline and control sites. However, there is no discernable impact on the fauna and flora of the sites. The fish populations remain healthy, and invertebrate populations, important indicators of
water quality, have remained largely the same.

As part of its Biodiversity Action Plan, Galmoy conducts a regular survey of birds found on and around its tailings impoundments. The tailings provide a variety of habitats not commonly found in the interior of Ireland and which attract bird communities, especially as resting areas during spring and autumn migrations.

The importance of this extraordinary diversity of birdlife has been considered in the closure plan for the tailings facility. The tailings will support pasture, in keeping with the local land use pattern. The pasture will be broken up by hedgerows made up of local species which will provide habitat for birds and small mammals. A water catchment area will be retained adjacent to the tailings area which is expected to be attractive to waders and wildfowl.

Curlew, an IUCN Global Red List species roosting at the Galmoy tailings dam.

Wildfowl roosting on the tailings flats at Galmoy.

Environmental Incidents

Lundin Mining maintains a reporting system for environmental incidents. These are classified on a fivepoint severity scale that takes account of impact on the environment, regulatory non-compliance, or potential concern to communities. Incidents of sufficient concern to rate a Level III ranking or above, are reported to the Board of Directors. Examples of incidents that are reported to the Board of Directors would include; loss of containment of a hazardous material causing offsite environmental impact or non-compliance with permit conditions that could result in prosecution.

There was one reportable incident in 2010; a discharge of excess water from the tailings impoundment at Galmoy due to unusually heavy rainfall which did not result in environmental damage. The site has taken measures to ensure there is not a repetition, including blocking off
disused sections of the mine and continuing work on covering the on tailing area.

No fines were incurred for environmental offences at any of our operations.


Air Emissions and Noise

Mine sites conduct regular monitoring of ambient air quality and meet permitted guidelines. Neves-Corvo, Zinkgruvan and Aguablanca have exceeded emission limits in the past with dust blowing from tailings facilities and from piles of concentrate at the mine sites and
ports. Programs and processes are now in place to reduce these emissions to well below permitted limits.

Neves-Corvo is the only site with significant NOx/SOx air emissions, however, these are in full compliance with permit limits. Neves-Corvo regularly monitors airborne dust from its operations that might impact neighbouring communities. Particulate matter (PM10) values in the villages of Graça, Corvo and Neves were all inside the legal limits.

Zinkgruvan has received concerns from neighbours regarding noise from a surface crusher and dust from ore stockpiles. Short term and long term engineering solutions are being sought to resolve these problems. A neighbour's concern regarding noise from a ventilation shaft prompted the mine to design and construct noise barriers around the fans to bring the noise levels well
below permitted levels.

A complaint respecting blasting vibration was received at Galmoy. Larger-than-usual blasts had been carried out in the mine but independent assessments demonstrate that the shock velocities through the rock remain well within the permitted range.

Waste Management

Our operations have waste management plans that describe how to handle hazardous waste, nonhazardous waste and mine-specific waste and specify which contractor to contact for disposal. Plans also include actions for minimizing waste and improving recycling.

The main classes of hazardous waste produced at our operations include used oil and oil filters, grease, used reagents, other chemical products such as paints and laboratory reagents, used batteries and worn tires from mobile equipment.

Mine-specific waste includes used mining equipment and resin plastic. Some waste is kept underground but all hazardous waste, municipal waste and organic waste is brought to surface and disposed of or recycled in accordance with waste regulations and site waste management plans.

The amount of waste produced in 2010 was lower than 2009 but site clean-up programs to improve safety and productivity at the mines, particularly Neves-Corvo, continued to generate significant amounts of nonhazardous
waste.

Waste Rock

Waste rock, along with tailings, account for the majority of waste by volume generated by mining operations. Waste quantities in this category cannot be reduced without reducing production volumes. It is therefore necessary to ensure that these wastes are managed to reduce the site's environmental impact as much as possible.

At Neves-Corvo and Aguablanca, waste rock is stockpiled. The waste rock piles at Neves-Corvo are temporary structures and the rock will ultimately be used in the tailings management facility for construction of dykes and cell covers, or used inside the mine. The present storage area will be cleaned and recovered.

Aguablanca is progressively restoring rock piles by re-vegetating them with local plant species.

Zinkgruvan and Galmoy do not maintain waste rock piles - all waste rock is returned underground to stabilize worked-out stopes. With the decline in mining activity at Galmoy, 93,000 tonnes of waste rock was imported into the mine to provide rockfill to stabilize mined areas.

Neves-Corvo Production
	Ore '000 Tonne/Yr	Waste Rock '000 Tonne/Yr	Tailings* '000 Tonne/Yr
2007	2,583	372	1,630
2008	2,803	572	1,938
2009	2,506	546	1,789
2010	2,612	777	1,806

Zinkgruvan Production
	Ore '000 Tonne/Yr	Waste Rock '000 Tonne/Yr	Tailings* '000 Tonne/Yr
2007	876	276	708
2008	895	466	736
2009	1,028	280	869
2010	1,023	608	839

Aguablanca Production
	Ore '000 Tonne/Yr	Waste Rock '000 Tonne/Yr	Tailings* '000 Tonne/Yr
2007	1,703	13,623	1,578
2008	1,752	19,771	1,710
2009	1,442	11,294	1,786
2010	1,349	20,092	1,331

Galmoy Production
	Ore '000 Tonne/Yr	Waste Rock '000 Tonne/Yr	Tailings* '000 Tonne/Yr
2007	454	13	342
2008	509	33	389
2009	195	2	128
2010	156	5	-

* Note that 'tonnes of tailings' represents material sent to the tailings management facility. Additional material is used underground as fill.

Tailings Management

Active tailings impoundments represent one of the larger environmental risks for the mining industry and, in keeping with better practice, Lundin Mining takes considerable care to ensure tailings facilities are well designed, built to exacting standards, are well maintained and are monitored carefully. Tailings facilities are managed in accordance with international standards and standards in the national jurisdiction.

Neves-Corvo

At Neves-Corvo, the Tailings Management System incorporates requirements from the EU Mine Safety Directive, International Commission of Large Dams (ICOLD) and Portuguese national legislation.

Neves-Corvo is employing innovative paste tailings technology to manage its tailings. Paste tailings are tailings that have been significantly dewatered and can be stacked so that they take up significantly less volume in the tailings management facility. The tailings disposal system at Neves-Corvo has provided safe and reliable storage of tailings, but based on life-of-mine plans, the tailings facility only has capacity for continued subaqueous deposition until the first quarter of 2011. The solution to the capacity problem was to develop and implement innovative paste tailings technology.

Paste tailings, therefore obviate the need to raise the height of the dam, create a more secure tailings facility and reduce the environmental footprint of the mine. The thickened and dewatered tailings provide a more stable material that can be piled on top of the existing tailings deposits. The mounds of paste tailings are retained by berms inside the tailings basin constructed of mine waste rock.

The Tailings dam at Neves-Corvo is equipped with a considerable amount of monitoring instrumentation to check its stability and performance.

Internal berms are constructed of waste rock to retain paste tailings.

Paste Tailings Have a Number of Environmental Advantages:

• Water that would have been disposed of in the tailings pond can be redirected as process water, reducing water use intensity.
• Water storage and retaining ponds can be reduced or even eliminated.
• Tailings may be deposited at higher slope angles which reduces the footprint of the facility for the same volume of material.
• There is a reduced risk of environmental damage as there is little or no water to aid the transport of the tailings if an embankment breach should occur.
• Seepage of contaminated water from the stored paste tailings is reduced or eliminated. The volume of tailings that needs to be stored is further reduced by removing as much as possible underground to use as paste backfill to support worked out areas of the mine.

Zinkgruvan

At Zinkgruvan, the tailings management program is based on the SveMin Dam Safety Guidelines which incorporate cross-audit by SveMin member companies to ensure that standards are applied. Dams are inspected at least annually by independent, expert consultants on dam design to ensure their continuing integrity and to ensure that rigorous programs of ongoing monitoring are in place at all sites.

Galmoy

At Galmoy, the closed tailings facilities are undergoing remediation and are being covered to create land for grazing. Planting hedgerows and local species of grasses and wildflowers will create a sustainable, mixed environment which will increase the biodiversity in the area. The tailings facility is inspected annually by an external expert and extensive monitoring programs are in place.

Acid Rock Drainage (ARD)

An important environmental consideration for mines is the generation of acid when metal sulphides, such as pyrite, are exposed to moisture and air. These acidic discharges, known as acid rock drainage, or ARD, can adversely affect waterways or groundwater by lowering the pH or by leaching out metals and other chemicals that may be environmentally toxic.

At Neves-Corvo, waste rock has been tested for ARD and the results obtained show that generally the waste is "likely ARD generating." Tailings contain pyrite, a
sulphide mineral, and are ARD generating. These are deposited sub-aqueously. The new paste disposal facility will accommodate waste rock and tailings in the same area as part of a comprehensive Waste Management plan which will mitigate the risks imposed by ARD.

Zinkgruvan has tested its wastes for ARD and these have been found to pose no immediate or long-term acid generating potential, owing to their low sulphide content and high pH buffering from calcareous minerals. This low ARD potential has also been demonstrated in the historic Åmmeberg tailings.

Waste rock at Aguablanca has not yet been tested but with relatively low sulphide concentrations in the rock, a semiarid climate for most of the year and no water courses in the immediate vicinity of the rock piles, ARD discharge is not considered to be a significant issue of concern.

At Galmoy, the host rock is carboniferous limestone, with the calcium carbonate providing significant buffering potential. Acid-Base Accounting of tailings material demonstrates that ARD is not a concern.

Mine Closure

Planning for mine closure starts at the earliest stages of developing a new mine. All Lundin Mining mine sites have a closure plan that includes financial provision for mine closure and site restoration. Closure plans are updated periodically, usually every five years, to reflect changes in mining methods or sequencing and developments in closure technology. Details concerning closure related provisioning and accruals are provided in Lundin Mining's latest web-posted Annual Financial Report.

Wherever possible, reclamation is carried out while mining is still active. For example, waste rock is used underground at Zinkgruvan and Neves-Corvo to fill mined out stopes. At Aguablanca, waste rock piles are covered and revegetated as soon as a section has reached capacity.

Lundin Mining is currently managing two closed mines. The Storliden Mine in Northern Sweden was closed in 2008. In 2009, all waste rock was disposed of underground, the drift sealed and surface structures removed clean-up of the surface areas and some revegetation were undertaken in 2010. The last stage in the remediation program is to reforest the mine site and the area surrounding the vent shaft. This was originally planned for the spring of 2010 but a prolonged winter and the consequent late thaw necessitated a postponement to 2011.

The Las Vueltas Mine in Honduras was acquired by Lundin Mining as part of the Rio Narcea purchase in July 2007. This open pit, heap leach gold mine operated between 2001 and 2004. Some remediation work had been done prior to the acquisition of the site by Lundin Mining but further work was required.

A closure plan was presented to the Honduran Government in late 2010. The plan includes drainage and covering of process ponds and the construction of a new passive water treatment system to manage acid rock drainage from the pit. The waste rock dumps will be re-contoured to improve stability and will be covered with soil mixed with carbonate rock to assist with acid neutralization. Work is expected to proceed in 2011 once final regulatory approval is received.

Active reclamation is also underway at Galmoy where mining activity continues (although the process plant has been closed and dismantled). In 2008 Galmoy Mines Ltd entered into discussions with all stakeholders including government ministries, local councils and environmental groups to agree a planned and comprehensive closure of the mine guided by a non-statutory Mine Closure Committee. The mine closure and restoration work at Galmoy is progressing well and the closure plan is currently being considered by regulatory authorities with an expectation that approval will be provided in mid-2011.

Closure plans also consider social concerns. For example, at Galmoy considerable effort has been taken to find closure solutions that attempt to maintain employment in the area and that provide useful land use for the local community. Part of the Site will be productive agricultural land and the mine has donated land and infrastructure for use as a regional sports facility. The Site has entered into an arrangement with Laois Gaelic Athletic Association to donate some of the company's infrastructure and land for use as a sports training facility. This will form a "centre of excellence" for Irish national sports such as Hurling and Gaelic Football.

Aguablanca maintains a nursery to grow oak trees to be used in Site restoration on closure

A Closure Plan for the Las Vueltas Mine in Honduras is awaiting the approval of the Government Authorities

Remediation of Zinkgruvan's Legacy Tailings

Mining has been conducted for more than 150 years at Zinkgruvan. The original ore processing facilities were not at the mine site as they are today, but were located at Åmmeberg, situated on Lake Vättern, the second largest lake in Sweden. Tailings were pumped directly into Kärrafjärden, an arm of Lake Vättern.

In 1977, the concentrator at Åmmeberg was closed and discussions commenced with the authorities on the preferred approach for the restoration of the old disposal area. The result, after many years work, is a thriving vacation community, including a golf course and a popular marina which provides employment opportunities for local residents. Lundin Mining continues monitoring and investigating the environmental effects in Kärrafjärden Bay. These studies show that the water quality in the northern section of Lake Vättern has not been subject to any major negative impact; the fish population has not been adversely affected and is suitable for human consumption. The Company is currently seeking the best way to address a localized zone of elevated zinc on the old mill property. During 2010 studies were carried out to develop a more complete understanding of the affected area; to determine the volume of material involved, water flow rates from the area and water quality. Zinkgruvan is in discussions with the Swedish environmental authorities to determine the optimum way to remediate this metal contaminated material.

Product Responsibility

Marketing initiatives focus on being the supplier of choice by providing quality products, technical and marketing support and dependable on-time delivery at competitive prices. The Company generally deals directly with its customers. Concentrates are sold and transported in accordance with EU regulations and shipments are always accompanied by appropriate documentation.

Health and Safety impacts are evaluated for production of raw materials and base metal ores to ensure that the health of employees is not affected. Assessments continue with an evaluation of risks associated with beneficiation and with transportation of concentrates. In 2010, a detailed chemical and mineralogical analysis was carried out for of all of the concentrates we produce in order to be able to conduct an assessment of the environmental and health and safety risks that they may pose. Concentrates were classified according to the criteria of the UN Globally Harmonised System and any toxic ingredients were registered with EU authorities. Material Safety Data Sheets were prepared in accordance with the new reporting requirements and are made available both to customers and those shipping our products.

Concentrates are moved by truck and rail car to ports close to the mines where they are exported to smelters within the European Union or to Asian and South American markets.

Trucks and railcars used for transporting concentrate are covered to prevent dust being released and are washed down before leaving the mine site.

The port facility at Setúbal in southern Portugal is owned and operated by Lundin Mining. Ports at Otterbäcken in Sweden and Huelva in southern Spain are operated under contract. Regular audits, including HSEC aspects, are carried out at ports that are used for shipping concentrates.

Emerging regulatory requirements are reviewed routinely and updated as part of the Company's HSEC Issues Management process. There have been no incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services. Similarly, there have been no complaints regarding breaches of customer privacy or losses of customer data. There have also been no fines for noncompliance with laws and regulations concerning the provision and use of our products.

Environmental Expenditure

The Company spent in excess of €11 million on environmental management in 2010. Exact amounts spent on environmental management are difficult to calculate because environmental management is intrinsic to operating a mine effectively and many environmental costs are included in operational budgets. Different budgeting practices at the mines and different environmental issues that need to be managed also make it difficult to make direct comparisons on environmental expenditure between the sites.

Tailings management was a major environmental investment for our operations, with more than €6 million being spent to maintain, improve and monitor tailings impoundments. Upgrades related to site water management required an additional investment of €4.4 million.

2010 Environmental Expenditures* (€)
Neves-Corvo	6,405,098
Zinkgruvan	2,047,197
Aguablanca	915,051
Galmoy	2,237,200
Total	11,604,546