At Grupo México, we work in sectors that are essential in the fight against climate change and in driving overall sustainable development.

Our Mining Division primarily produces copper, which is essential in the manufacturing of technological solutions that, collectively, have the potential to significantly reduce greenhouse gas emissions around the world. For example, electrically powered vehicles contain almost four times more copper than vehicles with internal combustion engines. Also, as a 100% recyclable metal that does not lose its properties when recycled. Copper facilitates the circular economy and helps preserve the environment.

Our Transportation and Infrastructure divisions provide rail freight transportation solutions that generate nearly four times less emissions than trucking, and we are developing clean and renewable energy, engineering and construction projects.

To transition to a low-carbon operation, we need to make substantial and sustained reductions in the greenhouse gas emissions produced by our various operations.

In this area, in 2022, we prepared a roadmap comprising the following areas:

• Investment in renewable energy
• Electrically powered mine trucks
• Fuel substitution in freight locomotives and electrically powered yard locomotives
• Energy efficiency in our operations
• Nature-based solutions
• Emissions reductions in our value chain

Also in 2022, our renewable energy projects and energy efficiency prevented the emission of approximately 758,000 tons CO₂e, projects like our El Retiro Wind Farm, and cogeneration projects and purchase hydroelectric power.

Additionally, our reforestation programs have contributed to reducing our carbon footprint, reforesting approximately 4,084 acres (1,653 hectares) with native plants.

Energy Management Program

In the Infrastructure Division, we established the Energy Efficiency department pursuing the optimization of our site’s consumption patterns. Our commitment to shaping a sustainable business environment nourishes the importance of the projects evaluated by this team in the consolidation of Grupo México’s Decarbonization Strategy.

We have developed and implemented an energy efficiency tool across several segments of our businesses. This tool aims to establish baselines on which we measure, verify, and report the progress of energy, cost, and emissions savings projects. In this initial phase, we monitor electrical consumption in our operations to then explain their behavior with variables such as their production or occupancy and thus identify specific areas of opportunity for continuous improvement. Analyzing these measured values also allows us to standardize energy consumption KPIs, while information repositories are created within the tool to facilitate consultation from any interested area.

Energy Efficiency team evaluates, proposes, and ensures the execution of projects in coordination with Maintenance, Operation, and Climate Change departments. Currently, we have begun prospecting initiatives in Real Estate, Electricity Generation, O&G Platforms, Highways, and Mining operations. Energy efficiency solutions proposed for these lines of business include options for correcting low Power Factor, foster on-site renewable generation, reduce thermal load inefficiencies, equipment start-stop optimization, and awareness campaigns for the responsible use of our resources. For example, in collaboration with the Mining Division, we developed a project to replace diesel with solar energy in our electro-winning (SX-EW) operations at La Caridad mine (see page 257 of our 2023 sustainability report).

As a next step, we will incorporate the management of other energy resources, such as fossil fuels, to further contribute to our decarbonization goals. This approach will allow us to extend our Energy Management System across all Grupo México operations.

One of the key actions to strengthen the resilience of the Grupo México business model is to identify and manage the risks and opportunities related to climate change by analyzing climate scenarios, which we have been doing since 2020. As a result, we are incorporating factors related to climate change into our business decisions involving either risks (e.g., carbon taxes, increased costs related to climate management, physical impacts on operations) or opportunities (e.g., increased demand for copper, substitution of fossil fuels, implementation of low or zero emission technologies).

The scenarios were selected based on the 2017 guidelines of the Task Force on Climate-Related Financial Disclosures (TCFD).

We have also been building on recent efforts to understand, prevent and better address the risks associated with water management, both at our facilities and in the watersheds where we operate. In this regard, we regularly review and update our inventory of water-related risks, and also our plans to prevent and address these issues.

As a result, we have invested US$193.00 million in water management projects and others to mitigate incidents that could result from extreme rainfall. For example, we have been working on upgrading the water distribution network in cities near our operations, and we have designed, built and put into operation water treatment plants to optimize this resource. Additionally, our Buenavista del Cobre mine has designed a tailings storage facility that will support an extreme storm that would produce 20 million cubic meters (over 5 billion gallons) of water, which will prevent flooding and impacts downstream.

In 2023, we will be revising our analysis to consider the most recent scenarios recommended by the Intergovernmental Panel on Climate Change (IPCC) in their report (AR6).

The results of this new analysis will inform the calculations of potential financial impacts on our operations and our value chain in the medium and long term, and will also ensure we are meeting the increased market demand and, particularly, the new requirements expected from the Securities and Exchange Commission (SEC) on climate disclosures.

We have strengthened our practices and reporting to provide our stakeholders with reliable quality information to objectively assess our contribution and performance:

• We adjusted the calculation of our carbon footprint in 2019 to include the emissions produced by our value chain, the results of which are independently audited.
• Our 2022 Sustainable Development Report reports our performance in greater detail, including also content aligned with the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD).
• Our 2022 Sustainable Development Report sets new short and medium term emissions reduction and energy consumption targets .
• We are committed to zero net emissions by 2050.
• We are part of the Global Copper Decarbonization Roadmap working group of the International Copper Association (ICA), which aims to set GHG emissions reduction targets for the copper industry and define the actions to take to achieve these targets.
• Grupo México maintained its “B” rating on the Carbon Disclosure Project (CDP) climate change assessment in 2022. We have also been participating in the S&P Global Corporate Sustainability Assessment (CSA) since 2020, and since then, our climate strategy score has increased from 56 to 64 for Grupo México and from 60 to 67 for Southern Copper Corporation, for the 2022 reporting period.