Due to the extended strike at Cananea and its severe consequences for both the local residents and the Company, it was decided to undertake a social initiative. The Company contracted a consulting group (Grupo Encuentro) who, using novel and original ideas for community participation approached local groups, and helped to improve relations between the Company and the local population.

Grupo Encuentro involved mothers and fathers, children, seniors, workers, religious, teachers, traders and other actors in society in the experience of the workshops and the activities at Cananea, all of them benefited with the lessons learned from of these experiences and emotions.

During 2008, operations started in the community centers of the mining units of Santa Eulalia, Santa Barbara and Planta de Nueva Rosita, Coahuila. Activities offered in each of these centers benefits more than 600 people, including women, men, children and older adults. At present, workshops and talks are being presented on dance, computers, carpentry, tailoring, baking, manual works and bijouterie, all of which has generated a large degree of community participation.

IMMSA, in collaboration with the Secretariat of the State of Coahuila, provided training for 22 people at the following locations; Rosita, Palau and Sabinas Coahuila, to work in area production projects. As a result of the efforts of the Secretariat and the National Fund for Support to Solidarity Enterprises (Fondo Nacional de Apoyo a las Empresas de Solidaridad -FONAES) three of the 22 projects are underway: a carpentry shop, a grocery, a cibercoffee and pancake store. All of them have been successful. It is hoped that these type of projects can benefit more people in the community and could help generating self-employment.

In order to promote safety and health at work among the personnel, their families and the community at large, we carried out a “Safety and Health Week 2008” at Planta de Cobre, Units Santa Barbara, Charcas and Taller Central.

In San Luis Potosi 8 health fairs were conducted, with 6,300 participants. These fairs focused on the detection, promotion and appropriate channeling of chronic degenerative diseases. Ten lectures were conducted on preventive medicine with the participation of over 300 people from the neighboring community. Issues such as oral hygiene, breast cancer, diabetes and hypertension, cervical cancer, nutrition and sexuality were presented and discussed at these lectures.

The programs of “Literacy Adviser, Elementary and Secondary open for Adults”, organized by the Community Development Center of San Luis, in coordination with the State Institute for Adult Education, benefited over 400 people, and delivered 53 elementary certificates and 150 secondary certificates.

Southern Copper promotes sustainable development projects in the communities of Tacna, Moquegua and Arequipa, which are located close to our principal operating facilities. This support is from voluntary contributions made by our Company to the “Asociacion Civil Ayuda del Cobre” (Civil Aid Copper Association) under an agreement signed with the Peruvian government.

The projects within this program work in partnership with local public and nongovernmental organizations to achieve the benefit from the participation of the neighboring communities; thereby taking into account the historical and cultural characteristics of each locality.

Minor irrigation infrastructure work continued in partnership with the irrigation committees in Candarave, with an investment of $205,741.63, and the construction of the Tacalaya-Camilaca’s hydraulic canal ($205,058.00). Both works are part of the general irrigation system which relates ito the Cularjahuira Dike (a geotechnical study, conducted by the Company, which will make possible the construction of a new dike).

Southern Copper and the National Engineering University signed an agreement for the Callazas Dam’s feasibility study. This project is considered essential for the agricultural development in the region, and it is included in the Development Plan of Tacna, the “Plan Basadre” sponsored by the regional government of Tacna and the Peruvian government. The Company will invest, through the Civil Aid Copper Association, about $700,000.00. The project will include three components: the design of the Callazas dam, the study for the improvement of major irrigation infrastructure and the study of environmental and social impact. This project will ensure optimal and rational use of water resources for agricultural activity during the dry season.

Also, with an investment of $87,658.90, a geotechnical study for the Cularjahuira Dike was completed. The dike is expected to benefit the approximately 1,900 inhabitants of the districts of Camilaca and Candarave. This study determined the feasibility of building a new dam downstream.

Agronomy.- The Weeds Control Program was carried out in the districts of Cairani, Huanuara and Quilahuani, in Candarave, with the participation of local governments. The program led to the formation of a control network, formed by the people benefited from each locality. By means of this program, there was a decrease in the presence of “kikuyu”, an invading plant, along 120 kilometers of channels and 30 hectares of alfalfa cultivation. The total investment in the program was $42,033.15.

A Biological Control Campaign in the Tambo’s Valley, in partnership with the National Service of Agrarian Health (Servicio Nacional de Sanidad Agraria – SENASA) and the User´s Board, eradicated the plague of ‘barreno’ –a type of damaging worm– in rice crops in the districts of Cocachacra and Punta de Bombon (Arequipa Region). The eradication was done with the release of controlled wasps in a total area of 400 hectares. According to SENASA assessments, in 350 hectares, the damage to the rice crops by attack of the borer was reduced to less than 5%, thus the program will continue.

Diseases were controlled in the production of oregano, a higher quality product in the area. The use of guano (natural fertilizer from sea birds) was promoted among the oregano producer’s associations of the province. Additionally, the producers’ association should also benefit from the agreement Strengthening Competitive Capacity of the Oregano Producers, signed with the non-governmental organization “El Taller” and the municipalities of Cairani, Huanuara y Quilahuani, in Candarave. The project requires a total investment of $135,018.11.

In Candarave, the cultivation of thyme, a product used as condiment and in the pharmaceutical industry, was promoted as a alternative product for exportation. A field installation of canola, a seed that contains Omega 3 and Omega 6 and which produces vegetable oil, was successfully completed in alliance with the governmental program Exporting Mountain (Sierra Exportadora).

In addition, plantations of cereals such as oats and corn were promoted, through an agreement signed with the Foundation for Agrarian Development (Fundacion para el Desarrollo Agrario – FDA) and the National Fund for Job Training and Employment Promotion (FONDOEMPLEO).

Stockbreeding.- The Emergency Cattle Care Program was instituted to take care of Candarave producers cattle, affected by the drought period, through the delivery of hay and concentrate at low cost. This action reduced the shortage of feed for cattle and helped to maintain levels of cattle productivity. A contingency fund has been established set by employees of the Company to assist producers in dealing with emergencies, which will be used to reduce risks to the productive local activity. A good part of the production of forage acquired by the program is from local producers, to whom it generates economic benefits. The amount of investment is $66,455.91 and the participants in this program are over 800 families.

The Animal Health Program continues providing veterinary technical assistance to producers from 17 communities located in districts of Cairani, Candarave and Quilahuani, in the province of Candarave.

Preventive medicines and treatment for prevalent diseases in the high Andean zone were distributed. Also developed was the Hampshire Sheep Genetic Improvement

Project. It took place in 5 communities in the Candarave province, through the use of registered breeders of high genetic quality in local sheep herds from groups of engaged producers.

On the other hand, the implementation of the Agricultural Fair in Tacna, like the Farming Fair of Candarave (in terms of organization, logistics and awards), event in which the exhibition of the best specimens of the various breeds of cattle, alpacas, sheep and Peruvian Paso horses took place. Also, contribute to farming fairs in Huaytire and Tacalaya.

Nutrition.- The Nutrition Program called “Southern Forming Healthy Communities” (PRONUT) was successfully launched through field work in communities in the Tacna Region. The program’s objective is to determine baseline statistics to establish or re-initiate goals of the program and measure the social impact on beneficiaries. These activities included the registration of the potential benefits, an activity performed by a team of nutritionists and medical laboratory technicians, who, in parallel, tested the nutritional status in children under 5 years old, pregnant women and nursing mothers in Candarave.

The main goal of PRONUT is to significantly reduce the levels of chronic malnutrition and anemia in children and women, so that they can increase their medium and long term educational and/or professional potential. Concrete actions of the program include the implementation of healthy baths, upgraded kitchens, family orchards and ecologic bathrooms, small animal farming and continuous training to ensure the sustainability of the program.

Strengthening of Productive Capacities

The Alpaca Genetic Improvement Project continues in the community of Huaytire, in the province of Candarave. The project uses modern techniques for selection, care and breeding species for genetic improvement in the medium term, which will benefit the production chain and the potential for exportation. For this purpose, different activities were performed, including the registration of available animals, the acquisition of top quality breeders and the construction of infrastructure for breeding. This construction is based on the standardized design of the National Institute for Agrarian Innovation. It’s built in an area of 180 square meters with capacity to hold up to 900 alpacas.

In addition, the Alpaca Producers Cluster continues in the community of Tacalaya, which, with an initial investment of $79,015.72, aims for a mass production of fur hats and alpaca fiber and by-products, with the purpose of offering them in the local market and for export. This program includes the development of fur, yarn and textile projects, and process improvements in the manufacture of hats and the packaging of oregano products.

The participation of women stands out, taking advantage of their craftsmanship. They will bring in to the family an extra income from textile workshops, like the one built with the support of the Company in community of Santa Cruz (specialized equipment and tools were bought for such activities).

It also highlights the project of strengthening the Torata User Board´s capacities, which will allow s for optimizing the management of water use among farmers of the district in Moquegua, thereby maximizing the potential of the sub basins of Torata and Chujulay rivers.

• Education.- The rehabilitation and construction of educational infrastructure of 56 schools was concluded. It is a process initiated in 2007 through the construction and/or rehabilitation of classrooms, toilets, laboratories, perimeter fences and sport grounds. During 2008, the schools from Cairani, Camilaca, Candarave, Huanuara and Huaytire, in Candarave were provided with furniture, blackboards, libraries and computer equipment, which will benefit local students. Other districts of the Moquegua Region also received benefits.
  
  
• Health.- The construction and rehabilitation of 27 health centers was concluded, in the regions of Tacna (Cairani, Camilaca, Candarave, Huanuara and Quilahuani districts) and Moquegua (Mariscal Nieto and General Sanchez Cerro provinces, Carumas, Cuchumbaya, Ichuña, Samegua, San Cristobal and Torata districts). Southern Copper promotes the sustainable development of communities located within its area of influence, through the Civil Aid Copper Association, which manages and invests in social projects for sustainable development funds of the Voluntary Contribution program. During 2008, the Company established a local fund of $3’664,490.94 and a regional fund of $14’657,963.74, to benefit the regions of Tacna and Moquegua.