Ricardo Porto, President & CEO,

NEXA RESOURCES PERU

"We managed to achieve our third best quarterly result ever in Q1 2021, in part due to high metals prices, but also due to a process of restructuring the company has undergone since before the pandemic."

How did Nexa Resources’ perform in Peru in Q4 2020 and Q1 2021?

The results from Q4 2020 and Q1 2021 were very positive. After lockdown, the strict protocols required to operate in Peru resulted in an adaptation period where no underground mining operation was able to return to 100% capacity. However, we managed to achieve our third best quarterly result ever in Q1 2021, in part due to high metals prices, but also due to a process of restructuring the company has undergone since before the pandemic. This includes the introduction of new technology and revision of mining processes that have resulted in lower costs and higher productivit

Can you explain Nexa’s philosophy with regard to incorporating new technologies into its operations?

This is a continuous process to create a more feasible and sustainable mining industry. When we look at the risks in our sector, including the use of water, tailings management, safety and building a social license, all of these aspects can be strengthened using the right technologies. Through Nexa’s MiningLab innovation platform, we look to establish partnerships with technology-focused companies that can make a difference to our operations. We currently have five startups working with us, one of which is Peruvian that helps with our social programs. 70% of Nexa’s innovation is incremental, so we are improving processes rather than replacing them.

What is the status of the Magistral copper development project, and its timeline for development?

There is a lot of talk about a commodities supercycle, and the one commodity that is indisputably linked to this cycle is copper, which forms the basis of infrastructure development and will play a large role in the electrification transition. Considering this macro outlook, Nexa has a lot of interest in increasing its participation in the copper space, with Magistral being our most advanced project

We finished the detailed engineering and design of the open-pit mine at the end of Q1 2021. We are now in the final permitting phase, and hope to make a construction decision by the end of the year.

What are your views on the current drivers of the zinc market?

I believe the fundamentals of the zinc market have never been this strong. The priced peaked in 2017 due to a temporary supply shortage, but this was not backed up by the level of demand we are seeing now. Normally demand is concentrated into certain regions at different times, but for the first time we are seeing large volumes being requested globally, including in Latin America. 70% of the demand for zinc comes from infrastructure, and governments around the world have pledged to increase infrastructure spending in the wake of the pandemic, so the outlook remains robust for the rest of 2021.

What is Nexa’s strategy regarding the sustainable development of communities surrounding its operations?

Regardless of where you operate, you need to establish the sustainable development of local communities, and this has to be done by training a base of local talent which understands the culture. In some ways, Covid presented an opportunity to showcase what the mining industry can do for communities in terms of providing PPE, oxygen, food and health supplies at a critical time. However, the core of Nexa’s strategy is forming partnerships with local stakeholders so they can work with us and become part of a project.

Can you elaborate on Nexa’s focus to promote workforce diversity and increase the participation of women in the mining industry?

Nexa is considerably above the industry average when it comes to workforce diversity, but there is still a lot of progress to be made. As a company, it is hard to communicate with society if you do not mirror society. Therefore we need more Peruvians, more workers from local communites, and certainly more women. Having a majority male workforce from a metropolitan area not only narrows your viewpoint, but also narrows the talent pool you are hiring from.

Nexa’s Empodera Group has highlighted issues that have resulted in a number of organizational changes, including increasing maternity leave to six months in Peru, with flexibility to work the final two months part time. We are also running training programs at Cerro Lindo and the Cajamarquilla smelter to train female operators, and have readapted mine site infrastructure to create a more adequate working environment. For the mining sector to become more competitive, we have to attract more diverse talent.