SUSTAINABILITY

Aclara’s Penco Module is in an area that has been highly impacted in the last forty years.

The main environmental impacts around Penco have been caused by the industrialization of forestry activities and the urban development of the cities and towns around the project. This has generated several indirect impacts, such as the opening of the city's landfill. These activities have resulted in the deforestation of native forests, which now only exist near the creeks, where they have been naturally hidden.

Aclara is here to return the environmental and social value to this area. Our project will not affect the remaining native forests.
Moreover, Aclara will also help regrow and rehabilitate native protected species such as Queule, Pitao and Naranjillo.

Our goal and main contribution to the community is to save one of the most vulnerable ecosystems in Chile.

HISTORICAL ENVIRONMENTAL IMPACT

Penco city has exponentially grown in the last 15 years, especially since the opening of the Penco By Pass in 2008; a highway that cuts through the Bio Bio region of Chile, starting and ending in Penco.  

Aclara owns a property of approximately 540 hectares that has been highly intervened for decades by different industrial activities, the main ones being forestry, oil, real estate, as well as road builders and sanitation industries.

Main sources of environmental impact in the area:

· Sanitary Landfill: attached to the northeast area of ​​the property is the Cemarc Waste Management Center, the main sanitary landfill of Concepción and other localities, which came into operation in October 2006 and is undergoing a process to extend operations for at least 20 years longer.

· Penco Real Estate Development: In the vicinity of the property, a strong real estate activity has been developed during the last 5 years, which has included the development of apartment buildings and houses for the locals of Penco, Concepción and neighboring towns.

· Oil Pipeline: the National Oil Company (ENAP) owns the oil pipeline that runs between the Bío Bío Refinery, in the Hualpén commune (13 km from the center of Penco), and the city of San Fernando (355 km from Penco). Part of the pipeline crosses the property owned by Aclara.

· Itata Highway: The highway, which began construction in 1995, and is one of the most modern in the country, crossing a large part of the property owned by Aclara.

Penco landfill
Soil excavations to cover Penco landfill

Forest logging area

It should be noted that Aclara's Penco Module property is not close to protected areas or priority sites for the conservation of biodiversity. The closest reserve is the Nonguén National Reserve, located more than 15 km south of our project.

OUR VISION

Aclara has proposed and designed a series of steps to achieve a sustainable operation:

(1) Adaptation of the Extraction Zone to promote the preservation of the Biological Corridor: Aclara proposes a design with six Extraction Zones. The proposed Alexandra zone features a biological corridor that cuts through the zone. This proposal, which reduces the surface of extraction by approximately 8%, focuses on achieving a biological connection between the species in the Conservation Category, between the upper and lower part of the stream. The company also proposes further conservation efforts in this area through the planting of native species along this ravine.

The Alexandra zone features a biological corridor connecting species in the upper and lower part of the stream to promote conservation efforts in the area.

(2) Safety Buffer to keep the habitat of the Native Preservation Forest and/or any Species in the Conservation Category untouched: Among the most threatened endemic forest species that still exist in Chilean territory, two stand out: the Queule (Gomortega keule) and the Pitao (Pitavia punctata). Aclara commits to safeguard these species. Studies suggest that the safe area to avoid affecting the species in the conservation category is 30 meters, to ensure their survival and to avoid affecting the reproduction of the trees in this category. However, the project is conservatively adding an extra 10-meter buffer, totaling 40 meters of distance, in which no type of activity would be carried out. Further environmental studies are underway to provide additional evidence to support this safety distance, ahead of a new Environmental Impact Assessment submission.

(3) Reforestation of native species: Aclara pledges to take actions that go beyond regulatory compliance. An example of this is the proposal to reforest 130 hectares, with accompanying native species of the Queule and the Pitao. Each time the operation of an Extraction Zone is completed, it will be revegetated, allowing the enrichment of surfaces. It is important to note though, that the species under the Conservation Category are found only at the bottom of the creeks in the area, not in the project lands.

(4) Voluntary Environmental Protection Commitments

· Protection and Monitoring of the Native Preservation Forest: The goal is to train and inform about the existence and care of the preservation forests adjacent to the Project's area of ​​influence (AOI). It includes the monitoring of the area to guarantee that the native preservation forest and/or species in the conservation category will not be affected by the development of the Project.

· Rescue and Conservation of the Queule and Pitao trees:  Aclara proposes to plant these species in the reforestation areas for the project, not only where they are currently present, extending their habitat.

· Multipurpose Rehabilitation Area: Aclara would like to build an area close to the commercial plant that would act as a multipurpose rehabilitation area, where reconversion to native forests and/or native preservation forests is promoted through passive and active actions. Additionally, in order to encourage environmental education activities, the company proposes adding a trail, stairs, railings, walkways and signage in this area. This pledge would invite the participation of local non-governmental organizations, such as foundations linked to the conservation of endangered plant species.

· Fauna Reproduction Center: The center would focus on the Southern Pudú species due to its importance at the regional and national levels. The southern pudu is characterized by being the second smallest deer in the world. Pudús have been classified as an 'endangered' species due to the destruction of their rain forest habitat for cattle ranching and increased human activity.

· Roads: The Project will give priority to the use of existing roads, thus minimizing new roads, and consequently, the effect on fauna. The Project will not enable any new roads to pass through the Native Preservation Forest units.  In addition, dust suppressants will be applied to the surface of the roads to increase their longevity and decrease maintenance costs.

CLIMATE SMART MINING

Aclara is fully aligned with The World Bank’s Climate Smart Mining initiative, which aims to help resource-rich developing countries benefit from the increasing demand for minerals and metals, while ensuring the mining sector is managed in a way that minimizes the environmental and climate footprint. As described on the World Bank’s website; “Without Climate-Smart Mining practices, negative impacts from mining activities will increase, affecting already-vulnerable communities in developing countries, as well as the environment in which they operate. The Climate-Smart Mining approach has been developed in concert with the broader UN Sustainable Development Goals to ensure the decarbonization of the mining and energy sectors also benefits resource-rich countries that host these strategic minerals and the communities directly impacted by their extraction.”


Climate-Smart Mining Building Blocks:


These are some of the ways in which Aclara aligns to these pillars:

Climate Mitigation

1) Integration of renewable energy: Aclara aims to supply the world with rare earths critical for green technologies such as wind energy and electric vehicles

2) Innovation: Our unique process, called Circular Mineral Harvesting, extracts rare earths without harming the environment, and protecting endangered species

3) Energy Efficiency: Our process will use a low amount of energy because it will not require any crushing or milling

Climate Adaptation

1) Forest Smart Mining: Preserving native conservation forests, revegetation of 100% impacted areas with native forests, and working by zone rotation so only one zone is impacted at a time

2) Resource Efficiency: Water used will come from a recycled source, and 95% will be recycled during our process, and 99% of our main reagent (a fertilizer) will be recycled

3) Innovative Waste Solutions: Our process will have no liquid residues, and processed clays will be sent back to the site, ready to be revegetated

ENVIRONMENTAL IMPACT STATEMENT

Aclara has been focusing on advancing the environmental permitting process. As part of the Environmental Impact Assessment (“EIA”) of the Penco Module initiated in 2018, and on January 31, 2022 the company filed a third Addendum to the Environmental Assessment Service (“SEA”). Aclara's management team expected an evaluation report to be issued by the SEA by April 2022, as a requirement to the decision-making process of the relevant environmental permitting evaluation committee. Although over the course of the Original EIA approval process, the company addressed many key aspects relating to the Penco Module, the company was unable to satisfy the SEA in relation to two technical aspects, related to the protection of local flora and fauna within the mandated regulatory timetable relating to the Original EIA process. In light of follow-up discussions between representatives of Aclara and the SEA to better understand the outstanding issues and consultations with technical and other advisors, on March 24, 2022, the company withdrew its application for the Original EIA so that it could fully address the topics raised during the late stages of the application process.

Aclara has already started the preparation of the supplementary information, including the development of new baselines for flora and fauna studies that will provide the basis for a revised EIA application (“Revised EIA”). Management’s current expectations, based on preliminary discussions with its technical consultants and other advisors, is that the Revised EIA approval process, could take between 12 months and 18 months from the filing date. The revised EIA application is projected to be filed in Q2, 2023.

FREQUENTLY ASKED QUESTIONS

What is the Environmental Impact Statement?

EIA is an information gathering exercise which follows a prescribed, well established methodology carried out by the developer and which enables a local planning authority to understand the environmental effects of a development before deciding whether it should go ahead. The EIA is significant because it puts emphasis on using  objective information, and it requires developers to compile information in a systematic, holistic and robust way. In theory, a properly researched and objective EIA submission should allow the whole community to properly understand the true impact of the proposed development.

How will Aclara look after the local fauna?

The company aims to set up a Reproduction Center for the Pudu species, given its vulnerable conservation status in the country. The center's research will contribute to a better knowledge of this species.

In addition to this, the species identified in the project area will be subject to strict rescue plans, to be relocated in areas with the same characteristics as those of their original habitats.

How will the project affect the community?

We estimate that the Penco Module will generate more than 800 jobs through job creation and additional services employed during the project’s lifetime.

Within our Voluntary Environmental Commitments, we will consider a Local Labor Recruitment Plan, where positions will be filled by Penco and Concepcion locals.

Has the community had a chance to share their opinions about the project?

During the environmental evaluation of the project, Aclara participated in two processes of Citizen Participation (PAC), where the company responded to more than 1,500 queries and observations. Additionally, the company has established communication channels with various community organizations. For example, there have been multiple site visits to the project areas, and there were 14 meetings with community participants held in 2021.

Since the year 2020 Aclara has discussed the project with over 100 organizations from Penco and Concepcion. More than 200 community representatives have participated, and over 1,500 questions from the community have been answered during the first workshops. Additionally, we have participated in over 25 site visits to educate the community about our project.

How much water will the project use?

At Aclara, we use water efficiently. We will process rare earths through a closed circuit that reuses up to 95% of the water source. This process will not generate industrial waste liquids. Our operation guarantees the availability and responsible use of water resources through supply and management controls. We calculate approximately 11.7 m3/h of fresh water use at the processing plant.