Final Results

Antofagasta PLC
13 March 2007


                                Antofagasta plc

      Preliminary Results Announcement for the year ended 31 December 2006

13 March 2007


HIGHLIGHTS

  • Record financial results with profit before tax up 86% to US$2,859
    million (2005 - US$1,536 million). The Group benefited from record copper
    prices in 2006 with copper production above forecast at all three mines,
    molybdenum production 13% above the previous year and strong performances
    from the transport and water divisions. This helped offset the effects of
    lower molybdenum prices and expected higher operating costs due mainly to
    industry pressures. Total income tax expense in Chile (including
    corporation, mining and withholding taxes) on profits and dividends relating
    to the year amounted to US$665 million (2005 - US$308 million); these
    amounts have either been paid or are due for settlement in the first half of
    2007.

  • Total dividend for the year up 119% to 48.2 cents per share. The final
    dividend proposed for 2006 is 43 cents, comprising an ordinary dividend of 5
    cents and a special dividend of 38 cents.

  • Continued progress with key capital projects. The 140,000 tonnes per day
    plant expansion at Los Pelambres is substantially complete five months ahead
    of schedule and construction at the Mauro tailings dam is scheduled to be
    completed by the end of 2007.

  • Consolidation of existing operations. The Group now owns 100% of El
    Tesoro following the acquisition of Equatorial Mining Limited in August
    2006. This has increased attributable copper production.

  • Feasibility studies initiated in 2006 to increase Group production. The
    Esperanza study should be completed in April 2007, with expected ore
    throughput of 90,000 tonnes per day and possible start-up during 2010. A
    study was also started for the increase of throughput at Los Pelambres to
    175,000 tonnes per day.

  • Acquisition of new exploration interests outside Chile. During 2006, the
    Group established new ventures for exploration in Pakistan, Colombia and
    Ecuador.


Marcelo Awad, Chief Executive Officer of Antofagasta Minerals S.A., commented:

'We are delighted with the progress of the Group during 2006 with the record
results, record dividend and substantial progress towards the Group's objectives
in production levels, new mines and exploration potential. The copper market has
declined somewhat since mid-December, although more recently appears to have
rebalanced. We currently expect the copper and molybdenum markets to remain well
above historical levels in 2007 with the potential, through the year, for copper
prices to recover from recent weakness and molybdenum  prices to continue on
their upward trend  of recent months.  However, the exceptional average copper
price of 2006 might not be repeated and the recent volatility that has
characterised the market is likely to continue.'


Antofagasta is a Chilean-based mining group listed in the United Kingdom. In
addition to copper mining, its interests include rail and road transport
operations and water distribution.


FULL YEAR TO 31 DECEMBER                                  2006    2005  % Change
----------------------------                --------    ------  ------  --------
Group turnover                                 US$'m   3,870.0 2,445.3     58.3%
Cash flow from operations                      US$'m   2,810.1 1,647.5     70.6%
Profit before tax                              US$'m   2,859.0 1,536.3     86.1%
Earnings per share 1                           cents     137.4    73.6     86.7%
Total dividends per share 1,2                  cents      48.2    22.0    119.1%
LME copper price (per pound)                   cents     305.3   167.1     82.7%
Group copper production                  '000 tonnes     465.5   467.3    (0.4)%
Group weighted average cash costs 3 (net
of by-product credits)                         cents      40.2    13.9    189.2%
Group weighted average cash costs 3
excluding by-product credits                   cents      95.6    77.3     23.7%
Market molybdenum price (per pound)              US$      24.8    32.0   (22.5)%
Group molybdenum production              '000 tonnes       9.8     8.7     12.6%
----------------------------                --------    ------  ------  --------
                                            

1 Earnings per share and dividends per share have been restated for the effects
of the 4-for-1 bonus issue on 19 June 2006.

2 Dividends are paid in either sterling or US dollars. The conversion rate for
dividends to be paid in sterling will be set on 15 May 2007.

3 Cash cost is a method used by the mining industry to express the cost of
production in cents per pound of copper, and is further explained in Note 28(b)
(iii).


Enquiries - London : Antofagasta plc           Issued by : Bankside Consultants

Tel: [phone]                                     Tel: [phone]
www.antofagasta.co.uk                                               Keith Irons
                                                      Email: [e-mail]

Desmond O'Conor                                       
Email: [e-mail]                          Tel: [phone]
                                                                 Oliver Winters
Hussein Barma                                Email: [e-mail] 
Email: [e-mail]              

Enquiries - Santiago : Antofagasta Minerals S.A.

Tel [phone]
Alejandro Rivera
Email: [e-mail]


DIRECTORS' COMMENTS FOR THE YEAR TO 31 DECEMBER 2006

Overview

The Group has reported a set of record results, with net earnings up 86.6% to
US$1,354.3 million and cash flow from operations up 70.6% to US$2,810.1 million
compared with 2005. These results were achieved against a background of strong
metal prices combined with a sound performance from all the Group's operations.

Copper prices averaged 305.3 cents per pound in 2006, supported by strong market
fundamentals. While some weakening occurred in the fourth quarter with reduced
consumption in the United States and a prolonged de-stocking process in China,
the market more recently appears to have rebalanced. The Group currently expects
the copper market to remain well above historical levels in 2007 and 2008,
though the exceptional prices of 2006 might not be repeated and the recent
volatility that has characterised the market may continue. The copper
concentrate market has moved into sharp deficit, and should result in lower
smelting and refining charges in 2007. Molybdenum prices, while lower than 2005,
remained at very high levels throughout 2006 at an average of US$24.8 per pound,
and strong demand should continue to support prices in 2007.

All the Group's operations performed well in 2006. Group copper production was
465,500 tonnes, 5.4% ahead of the original forecast for the year of 441,500
tonnes, with all three mines ahead of target. Molybdenum production at Los
Pelambres reached a record 9,800 tonnes and both the transport and water
divisions increased volumes as new contracts with mining customers have started
to come on stream. As expected in these tight markets, cost pressures have
continued. Weighted average cash costs were 40.2 cents per pound compared with
13.9 cents per pound in 2005. This was due to a combination of higher on-site
costs as expected, increased tolling charges mainly due to price participation
with smelters, and reduced by-product credits from lower molybdenum prices.

Los Pelambres has progressed with both its capital projects. The plant expansion
to 140,000 tonnes of ore throughput per day was substantially completed five
months ahead of schedule by the end of 2006. Los Pelambres expects construction
of the Mauro tailings dam, where it believes all permits granted have been
properly applied for and issued, to be completed by the end of 2007.

During 2006, Los Pelambres also initiated a feasibility study to consider a
further expansion of the concentrator plant to 175,000 tonnes per day which
should be completed later this year. An expansion of this size is within the
scope of the existing environmental approval which was granted in 2004. The
feasibility study for Esperanza is progressing well and should be completed as
expected by April this year. This currently envisages average annual production
of 175,000 tonnes of copper and 197,000 ounces of gold based on a ore throughput
rate of 90,000 tonnes per day.

2006 was also an important year in meeting the Group's objectives for securing
new growth opportunities. The Group completed the acquisition of Tethyan Copper
Company Limited and established a joint venture with Barrick Gold Corporation
over Tethyan's mineral interests in Pakistan. It also acquired Equatorial Mining
Limited; this has increased the Group's interest in El Tesoro to 100% and has
consolidated its land position in the Sierra Gorda district in Chile's Second
Region. The agreements with AngloGold Ashanti and Ascendant Copper Corporation
have provided exploration interests in Colombia and Ecuador respectively.

In September 2006, Mr. Philip Adeane retired having served as Managing Director
from 1982 to 2005 and as a Non-Executive Director thereafter.  The Board would
like to thank him for his enormous contribution over a long period of time which
has seen the transformation of the Group into a major copper producer.  He
continues to act as a senior advisor to the Board following his retirement.  Mr.
William Hayes joined the Board as an independent Non-Executive Director in
September.  Mr. Hayes was previously a senior executive with Placer Dome Inc.
and a former president of the Consejo Minero in Chile.  He has extensive
knowledge and experience of the mining industry both in Chile and globally which
will benefit the Group in its future development.

The Board has announced a final dividend for 2006 of 43 cents per ordinary
share, comprising an ordinary dividend of 5 cents and a special dividend of 38
cents. This gives a total dividend for the year of 48.2 cents, representing a
distribution of 35% of 2006 net earnings and a 119% increase over 2005. The
Board believes this combines its desire to return cash to shareholders in a year
of strong results with the ability to develop the Group's existing opportunities
for growth. The Board will also continue to seek new opportunities globally to
secure further world class mining assets.


Review of Operations

Los Pelambres

Los Pelambres had a record year with operating profit up 64.7% to US$2,223.7
million, compared with US$1,350.4 million in 2005. Realised copper prices were
335.0 cents per pound (2005 - 189.2 cents per pound). This reflected strong LME
prices and pricing adjustments on settlement of provisional sales, although the
benefit of these adjustments were partly offset by lower copper prices in the
last quarter of the year. Realised molybdenum prices decreased to US$24.6 per
pound (2005 - US$31.4 per pound), reflecting lower market prices. Further
details of pricing adjustments are given in the Financial Commentary on page 12.

Los Pelambres produced 324,200 tonnes of payable copper (2005 - 322,800 tonnes).
This exceeded the original forecast for 2006 of 308,000 tonnes, with better than
expected ore grades of 0.81% (compared with initial estimates for the year of
0.77%) and completion of the concentrator plant expansion ahead of schedule,
which enabled the ore throughput to average 127,400 tonnes per day (despite
lower throughput in the first half when harder rock was processed) and to reach
nearly 140,000 tonnes per day in the final quarter of the year. This compared
with ore grades of 0.80% and throughput of 128,100 tonnes per day in 2005. M
olybdenum production reached 9,800 tonnes (2005 - 8,700 tonnes), an increase of
12.6% due to improved molybdenum grades in the area mined during the year by Los
Pelambres. The improved production mitigated the impact of lower molybdenum
prices in the year.

Cash costs, which are stated net of by-product credits, averaged 16.4 cents per
pound in 2006 compared with negative 17.1 cents per pound in 2005. The increase
was due to a combination of lower by-product credits, higher tolling charges and
increased on-site and shipping costs. By-product credits decreased by 12.1 cents
per pound mainly due to the lower realised molybdenum prices. Tolling charges
were 12.1 cents per pound higher mainly as a result of price participation with
smelters as the average LME copper price increased significantly in 2006.
On-site and shipping costs averaged 56.4 cents per pound in 2006, in line with
expectations but 9.3 cents per pound above 2005 mainly as a result of cost
pressures including oil, plant and machinery hire and freight costs.

During 2006, Los Pelambres further reduced its borrowings with repayments
totalling US$81.3 million. Total borrowings were US$314.8 million at 31 December
2006.

Continued progress was made with two major capital expenditure programmes, the
Mauro tailings dam project and the expansion of the concentrator plant, both of
which are being financed out of Los Pelambres' cash resources.

The Mauro tailings dam will, together with the existing Quillayes tailings dam,
provide Los Pelambres with sufficient storage capacity for its 2.1 billion
tonnes of existing ore reserves, thereby supporting its mine plan to 2047. Work
on the Mauro tailings dam began at the end of 2004 following approval of the
Environmental Impact Study earlier that year and necessary sectoral permits were
granted during 2005. In November 2006, the Court of Appeals of Santiago upheld a
challenge by claimants in the Pupio Valley against the Chilean Water Authority
(Direccion General de Aguas) in relation to the award of one of these sectoral
permits. In December, however, the Court of Appeals rejected a second request by
the claimants that work on the dam should be suspended, and confirmed that Los
Pelambres was entitled to continue construction pending a final resolution by
the Chilean Supreme Court, to whom Los Pelambres have appealed as an affected
party together with the Direccion General de Aguas. Los Pelambres continues to
believe that all the technical and legal permits it has received have been
appropriately applied for and granted and is confident that this view will be
upheld by the Chilean Supreme Court. Construction is continuing on schedule.
There are other claims at first instance currently in the Chilean courts against
third parties (either governmental authorities or former owners of land in the
El Mauro area).  These claims are not against Los Pelambres, but in some cases
the company has intervened in case an eventual judgement affects the project.
The Mauro tailings dam was 66% complete by the end of 2006 with US$323 million
spent to that date. It is expected to be completed during 2007 at a total cost
of approximately US$534 million.

Expansion of the concentrator plant to 140,000 tpd was started in mid-2005,
through re-powering the grinding lines and installing a fifth ball mill. The
principal elements of this project were completed by November 2006 with the
start-up of the fifth ball mill, and throughput in the last quarter of 2006
reached an average of 139,100 tonnes per day. By the end of 2006 US$145 million
had been spent on this project which remains within its original budget of
US$182 million.

In July 2006, Los Pelambres initiated a feasibility study for a further
expansion of the concentrator plant, through additional infrastructure including
a third SAG mill and a sixth ball mill. This study is expected to be completed
by mid-2007. In January 2007, the Los Pelambres board approved initial
expenditure of US$113 million for the first steps in an expansion of up to
175,000 tonnes per day. This expansion is within existing environmental permits.
During 2006 Los Pelambres also started an exploration programme to identify
further reserves. Further details are given under 'Projects, exploration and new
opportunities' below.

In 2007, the ore processing level is expected to average 134,200 tpd as the
benefits of the plant expansion are partly offset by harder rock in the current
phase of the mine plan. The ore grade is expected to average 0.74%. As a result,
copper production in 2007 is expected to be around 321,000 tonnes, compared with
324,200 produced in 2006. The production level should increase in 2008 when
higher ore grades are expected. Molybdenum production in 2007 is forecast to
increase to around 11,000 tonnes (compared with 9,800 tonnes in 2006) through
the combination of the higher processing levels and marginally better grades
averaging 0.029% compared with 0.028% in 2006.

Cash costs before by-product credits are expected to increase from 96.1 cents
per pound in 2006 to approximately 100 cents per pound in 2007, as lower tolling
charges are offset by increased on-site and shipping costs, partly due to
industry pressures but also due to the effect of the lower ore grade in the
year. Nevertheless, molybdenum prices remain strong and Los Pelambres should
continue to benefit from substantial by-product credits.

El Tesoro

Operating profit at El Tesoro rose by 137.1% from US$172.9 million in 2005 to
US$409.9 million this year. Realised copper prices were 316.4 cents per pound,
compared with 175.7 cents per pound last year, reflecting the improved LME
prices, strong premiums due to the tight cathode market and pricing adjustments
on the close-out of cathode sales.

Production at El Tesoro was 94,000 tonnes (2005 - 98,100 tonnes). As expected,
lower ore grades of 1.16% (2005 - 1.23%) offset the increase in ore throughput
following the plant expansion carried out in 2005. Production was nevertheless
ahead of the original forecast for 2006 of 91,600 tonnes.

Cash costs rose in line with forecasts to 78.6 cents per pound compared with
66.1 cents in 2005. The expected increase resulted from a combination of input
cost pressures (including exchange rates and inflation) and operational factors,
including higher acid consumption due to an increased level of carbonates and
the effect of the lower ore grade on production. El Tesoro's results were also
affected by commodity hedging implemented in 2005, which reduced operating
profit in 2006 by US$44.8 million (2005 - US$24.8 million). This hedging
programme ended in December 2006.

As explained under 'Projects, exploration and new opportunities' below, the
acquisition of Equatorial Mining Limited in August of 2006 has increased the
Group's interest in El Tesoro from 61% to 100%.

During the year, El Tesoro reduced its borrowings by US$28.0 million to US$28.1
million at 31 December 2006. This included a voluntary prepayment of US$14.0
million.

In 2007, El Tesoro expects to produce approximately 90,000 tonnes of cathodes
mainly reflecting lower recoveries compared with 2006, together with a marginal
decline in the ore grade to around 1.15%. Cash costs are expected to be
approximately 100 cents per pound, reflecting the impact of lower production,
the higher waste-to-ore ratio and increased acid consumption, as well as other
cost factors including exchange rates and local inflation.

Michilla

Operating profit in 2006 increased to US$145.5 million compared with a loss of
US$31.1 million in 2005, as Michilla benefited from the strong commodity market
in 2006. Realised copper prices were 318.5 cents per pound (2005 - 177.1 cents
per pound), reflecting strong cathode premiums and positive pricing adjustments
in addition to strong LME prices. Cathode production in 2006 was 47,300 tonnes,
a 1.9% increase over the 2005 production level of 46,400 tonnes. This resulted
from increased throughput and higher recoveries, partly offset by the lower ore
grade. Production was also ahead of the original forecast for 2006 of 41,900
tonnes.

Cash costs for 2006 were 126.4 cents per pound, marginally lower than forecast
but 7.6 cents per pound higher than 2005. The increase was mainly due to the
higher cost of processing third party ore and, to a lesser extent, higher input
costs. Hedging losses at Michilla amounted to US$39.7 million (2005 - US$43.8
million) as a result of the completion of the commodity hedging programme
entered into during 2005.

Michilla completed a technical review of its resources in November 2006, and its
revised mine plan envisages a three year remaining mine life to 2009, with
average annual production of approximately 39,000 tonnes and average cash costs
of approximately 130 cents per pound. For 2007, production is expected to be
approximately 45,000 tonnes with cash costs of 136 cents per pound. In December
2006, Michilla, which is the Group's highest cost mine, hedged approximately 48%
of its expected 2007 production through min/max and futures. Further details are
given in the Financial Commentary on page 15 and in Note 4(b) to the preliminary
results announcement.

Railway and other transport services

Rail and road transport volumes in 2006 were 4.5 million tons (2005 - 4.3
million tons) and 1.5 million tons (2005 - 1.5 million tons) respectively. Rail
volumes were 3.5% above 2005 due to increases across various mines and the
start-up of the Spence copper project. Operating profit (excluding income from
associates) was US$32.6 million (2005 - US$27.4 million).

The medium to longer term prospects of the FCAB, the Chilean railway network,
remain very positive, with expected additional volumes in 2007 from contracts
with the Spence and Escondida sulphide leach projects in Chile and the San
Cristobal project in Bolivia. These three projects are expected to add
approximately one million tonnes to existing rail volumes in 2007 and a further
500,000 tonnes from 2008. In addition, in December 2006 the FCAB signed a
contract with Coldeco's Gaby project; this is expected to add approximately
600,000 tonnes in 2008 increasing to one million tonnes by 2011.

Aguas de Antofagasta

Aguas de Antofagasta had a successful year of operations. Water sales increased
by 14.3% from 33.1 million cu. m. in 2005 to 37.8 million cu. m. this year, as a
result of higher domestic consumption and increased sales to industrial
customers; this included 2.3 million cu. m. to Spence which started operations
during the second half of 2006. Aguas de Antofagasta also benefited from the
strengthening of the Chilean peso (the currency in which the majority of its
sales are denominated) against the US dollar in 2006. Accordingly, operating
profit increased to US$31.5 million compared with US$25.1 million in 2005.
During 2006, Aguas concluded four-year labour agreements with its two unions
with a real increase in wages of approximately 4% over the four years. It also
successfully completed its 5-yearly regulatory review of domestic tariffs in the
year which resulted in an anticipated average reduction in tariffs compared with
previous levels of approximately 5% from July 2006.

The prospects for Aguas de Antofagasta remain good, with total water volumes
expected to continue to increase as sales to Spence eventually reach
approximately 4.7 million cu. m. per year.


Projects, exploration and new opportunities

Esperanza

The Group's principal new project is Esperanza, located approximately five
kilometres from the El Tesoro oxide deposit. Esperanza has drill-inferred
resources of 786 million tonnes of sulphide ore with an average copper grade of
0.53%, an average gold grade of 0.20 g/t, and an average molybdenum grade of
0.012%, at a cut-off grade of 0.3% copper. It also contains a low grade oxide
deposit with a drill inferred resource of 73 million tonnes of ore with an
average copper grade of 0.42%. Pre-feasibility work, which commenced in 2004,
was completed in August 2006 at a cost of US$14.8 million, within the original
budget of US$15.3 million. This included a 2.3 kilometre exploration decline for
detailed metallurgical testing of ore.

In August 2006, Aker Kvaerner began a feasibility study. This was approximately
80% complete by February 2007 with US$12.3 million spent out of a total budget
of US$16.9 million. This is expected to be completed on schedule in April 2007
at the budgeted cost of US$16.9 million. The study currently contemplates a
concentrator plant with daily throughput of up to 90,000 tonnes per day of ore
and with average annual production of approximately 175,000 tonnes of payable
copper and 197,000 ounces of gold over the first 13 years of operation, although
production will be below this level in the earlier years when lower grades are
mined. An Environmental Impact Assessment is expected to be submitted in the
second quarter of this year and, subject to approval by the relevant
authorities, a decision to proceed with project development could be taken in
the second half of 2007 with an estimated 30-month pre-stripping programme
beginning by the end of the year, and possible start-up of operations in the
third quarter of 2010.

Reko Diq (Tethyan Copper Company Limited)

In April 2006, the Group acquired a 100% interest in Tethyan Copper Company
Limited ('Tethyan'), a company then listed on the Australian Stock Exchange with
copper-gold interests in Pakistan, for a cash consideration of US$170.4 million.
In September, it entered into a joint venture over Tethyan's mineral interests
with Barrick Gold Corporation ('Barrick Gold'), through the indirect disposal of
a 50% interest in Tethyan to Barrick Gold for a cash consideration of US$86.8
million. In November, the Group and Barrick Gold each contributed US$30 million
to extinguish a 'claw-back right' held by BHP Billiton over certain of Tethyan's
mineral interests.

Tethyan's principal assets are a 75% interest in the exploration licence
encompassing the Reko Diq prospect in the Chagai Hills region of South-West
Pakistan (in which the Government of Balochistan holds the remaining 25%)
including the Tanjeel Mineral Resource and the Western Porphyries, and a 100%
interest in certain other licences in the region. Tethyan has reported total
indicated and inferred mineral resource estimates at these properties of 2.4
billion tonnes with a copper grade of 0.51% and a gold grade of 0.27g/t.

In June 2006, an 18-month programme was initiated with a current budget of
US$30.5 million. This comprises exploration, including a drilling programme of
approximately 94,000 metres focused mainly on the Western Porphyries and, in the
later stages, initial pre-feasibility work on the prospects identified. By the
end of 2006, approximately 25,000 metres of drilling had been completed and
costs of US$7.9 million incurred. Preliminary results are encouraging and a new
resource estimate is expected to be completed by the end of this year. During
2007, Tethyan will analyse possible project scenarios and consider eventual
infrastructure requirements.

Support from both the Federal Government of Pakistan and the Government of
Balochistan for the development of a project has been strong, and discussions
are in progress to establish a foreign investment protection agreement. The
Group considers that the long-term potential of the investment in Tethyan
remains promising.

Acquisition of Equatorial Mining Limited and development of the Sierra Gorda
district

In August 2006, the Group acquired 100% of Equatorial Mining Limited, a company
then listed on the Australian Stock Exchange, at a cost of US$406.1 million (or
US$288.1 million net of cash balances acquired). Equatorial's principal asset is
a 39% interest in Minera El Tesoro in which the Group held the remaining 61%,
together with mining and water rights in the Sierra Gorda district in Chile's
Second Region. An agreement to sell Equatorial's North American interests was
reached in December 2006 and the proceeds of US$4.9 million were received in
January 2007.

The acquisition of Equatorial has consolidated the Group's position in the
Sierra Gorda district where it either wholly owns or has a 51% controlling
interest in a number of mining properties containing oxide and sulphide
resources. As was announced in 2001, these properties were part of a portfolio
acquired from the Luksic family who hold the remaining interest. During 2007,
the Group will continue examining its prospects in this area.

Colombia - joint venture with AngloGold Ashanti

In July 2006, the Group signed a Head of Terms agreement with AngloGold Ashanti
Limited ('AngloGold'), one of the world's largest gold producers. This sets out
the terms of the proposed Southern Colombia joint venture agreement to explore,
discover and develop copper and gold mining projects in an area of interest in
southern Colombia extending approximately 30,000 square kilometres. AngloGold
has agreed to contribute its mineral interests in the area covered by the joint
venture and Antofagasta has committed to funding US$1.3 million in exploration
costs over a period of twelve months. The agreement allows Antofagasta to fund
an additional US$6.7 million in exploration costs within four years
(representing a total contribution of US$8.0 million), in order to earn a 50%
interest in the joint venture. The Group spent US$0.9 million under this
agreement during 2006.

Ecuador - Agreement with Ascendant Copper

In November 2006 the Group signed a Letter of Agreement with Ascendant Copper
Corporation ('Ascendant'), a mining company listed on the Toronto Stock
Exchange, to acquire an interest in Ascendant's Chaucha Project. The Chaucha
Project is a copper-molybdenum prospect located in the Western Cordillera of the
Andes in southern Ecuador, approximately 70 kilometres west of the town of
Cuenca. The mineral concession covers an area of 2,544 hectares with
applications by Ascendant in progress for further mineral concessions from the
appropriate government entities. The Group has committed to fund at least US$1
million of expenditure; this includes reimbursement of prior expenditures of
approximately US$0.5 million to be made when the additional concessions have
been contributed. The Group will subsequently earn an equity interest of up to
60% in successive stages by spending a total of US$40 million over a six-year
period in four distinct phases of qualifying expenditures. These expenditures
will cover exploration and advancement costs including, in the later phases,
preparation of a feasibility study and a final payment on completion to
Ascendant.

Los Pelambres

As part of its review for possible expansion, Los Pelambres commenced a two-year
programme to identify additional deposits beyond the existing 2.9 billion tonne
resource, both by drilling the areas surrounding the current mine plan as well
as drilling the existing open pit in greater depth. During 2006, a drilling
programme of 14,500 metres was conducted at a cost of US$3.5 million. The
programme is expected to be completed in 2007.

Antucoya - Buey Muerto

In May 2006, the Group acquired the Antucoya property from Soquimich for US$8.0
million plus a future net smelter return (i.e. royalty payment). Antucoya is
estimated to contain 322 million tonnes of oxide ore with an average copper
grade of 0.4%, and is adjacent to Buey Muerto, a deposit which is estimated to
contain 138 million tonnes of oxide ore with a grade of 0.43%. The Group has a
51% interest in Buey Muerto, which was acquired on the same terms as the Sierra
Gorda properties referred to above.

The Group is currently conducting initial engineering and technical studies as
well as further drilling to examine the viability of on-site leaching of the
deposits to provide enriched solution to utilise any excess capacity at
Michilla's SX-EW plant. 19,000 metres of drilling had been completed by the end
of 2006 and the studies are expected to be concluded in the second half of 2007.

Peru - Cordillera de Las Minas S.A.

On 2 March 2007, the Group agreed to sell its 50% interest in Cordillera de Las
Minas S.A. ('CMSA') to Panoro Minerals Limited ('Panoro'), a company listed on
the TSX Venture Exchange. CMSA was the joint venture entity with Companhia Vale
Rio Doce ('CVRD') through which its interests in southern Peru were held. The
Group's share of the consideration comprises US$6 million plus 6 million shares
in Panoro. The agreement is subject to a number of conditions including
financing by Panoro and regulatory approvals. Subject to these conditions being
met, closing is expected to occur by June 2007.

Peru remains an area of focus for the Group and it will continue to look for
suitable opportunities in that country.


Dividends

Dividends per share proposed in relation to the year are as follows:

                                      US dollars              Percentage change
                                  2006      2005 1    2004 1   06 v 05   05 v 04
                                 cents     cents     cents      change    change
                              --------  --------   -------
Ordinary                           
Interim                            3.2       3.2       3.0
Final                              5.0       4.8       4.8
                              --------  --------   -------
                                   8.2       8.0       7.8       2.5%       2.6%
                              --------  --------   -------
Special                            
Interim                            2.0         -         -
Final                             38.0      14.0       8.0
                              --------  --------   -------
                                  40.0      14.0       8.0
                              --------  --------   -------
Total dividends to ordinary
shareholders                      48.2      22.0      15.8     119.1%      39.2%
                              ========  ========   =======
                                      Percentage
Dividends as a percentage of
profit attributable to
equity shareholders                35%       30%       27%
                              ========  ========   =======

1 Dividends per share have been restated for the effects of the 4-for-1 bonus
issue on 19 June 2006.

2 Further details relating to dividends are given in Note 8 to this Preliminary
Results Announcement.

The Board recommends a final dividend of 43 cents per ordinary share payable on
14 June 2007 to shareholders on the Register at the close of business on 11 May
2007. The final dividend comprises an ordinary dividend of 5 cents and a special
dividend of 38 cents. Including the interim dividend, this represents a
distribution of approximately 35% of net earnings (profit attributable to equity
holders of the Company) after taking into account withholding taxes incurred by
the Group in funding the dividend.

The Board's policy is to establish an ordinary dividend which can be maintained
or progressively increased at conservative long-term copper prices and through
the economic cycle. The Board recommends special dividends when it considers
these appropriate after taking into account the level of profits earned in the
period under review, the existing cash position of the Group and significant
known or expected funding commitments. As can be seen from the above table, the
Board has increased its recommended dividends in line with profits by means of
special dividends in these years of high copper prices.

The cost of the final dividend, including related withholding taxes, is
approximately US$541 million. This compares with a net cash position (on an
attributable basis) of US$1,363 million. The Board considers this to be an
appropriate level of distribution of profits earned in the year. In determining
this, it has taken into account its existing capital commitments, working
capital requirements and the balance of taxes (including withholding taxes)
accrued for profits earned in 2006 and to be paid in 2007. The Board has also
considered the potential future capital requirements of the Group which could
amount to approximately US$3 billion over a number of years should it proceed
with its existing portfolio of projects and opportunities; it believes these
opportunities remain attractive for the long-term development of the Group even
in an environment of lower copper prices. The Board also considers that this
provides the Group with sufficient flexibility to take advantage of new
opportunities which may arise in the future.


Current Trading Prospects

Fundamentals for the copper market remained very strong in 2006, characterised
by low inventories and high financing costs for fabricators. LME copper prices
were over 300 cents per pound for most of the year, having started at just over
200 cents per pound. The market weakened in the final quarter of the year with
reduced consumption in the United States and a prolonged de-stocking process in
China, combined with increased mine production and availability of scrap in
response to the high prices. With increasing inventory levels, LME copper prices
fell in February 2007 to around 240 cents, 40% below the peak reached in May
2006.

More recently, however, the market appears to have rebalanced, as the
de-stocking phase in China has declined or possibly ended. In 2007, demand is
expected to continue to grow as increased Chinese consumption and possible
re-stocking should help offset the effects of a moderate slowdown in the United
States. Supply is also expected to increase but remains vulnerable to declining
grades and other constraints including equipment availability, labour shortages
and power and water supplies. Most commentators expect the market in 2007 to
finish in a modest surplus, although forecasts range considerably. Total stocks
remain low at approximately 2.5 weeks' consumption, and this should help support
prices well above historical levels. For 2007, consensus estimates are for an
average copper price of above 260 cents, and around 230 cents in 2008. The
increased role of investment funds in commodity markets has made base metal
prices more sensitive to changes in sentiment, and accordingly copper prices are
expected to remain volatile.

The concentrate market moved sharply in favour of producers through 2006, as
expansion of smelter capacity has not been matched by corresponding increases in
mine capacity. With concentrate stocks at already low levels, a significant
deficit in the concentrates market is expected in both 2007 and 2008. This has
resulted in improved terms for producers with settlements for the annual
negotiations at the level of US$60 per dry metric tonne of concentrate for
smelting and 6.0 cents per pound of copper for refining with price participation
of nil, compared with US$95 and 9.5 cents respectively and price participation
at 10% above a copper price of 90 cents per pound. While this should
significantly benefit producers, the impact will be partly mitigated by the
'brick system' whereby the benchmark is often averaged over two years.

Molybdenum prices remained comparatively stable throughout 2006, averaging just
under US$25 per pound. The market is expected to remain strong, with continued
demand from the steel and catalyst sectors combined with limited supply
increases. Inventory levels for molybdenum remain low and this market also
remains vulnerable to supply disruption.

Group copper production for 2007 is expected to be approximately 456,000 tonnes,
a moderate decline of 2% from 2006 mainly as a result of minor reductions at
each of the Group's operations. Attributable copper production should
nevertheless be higher following the increase in the Group's interest in El
Tesoro to 100% during 2006. Cash costs will increase at the Group's three mines
as a result of both industry pressures and mine specific factors, although these
will be partly offset by lower tolling charges and strong by-product credits. In
2008, Group copper production is expected to increase as ore grades recover at
Los Pelambres.

2006 has been a very successful year for the Group. The excellent results
achieved have been supported by strong market conditions and sound operating
performances by all divisions. The Group has progressed well with its capital
projects, and its growth opportunities have been enhanced through its
acquisitions and the new ventures established. It intends to build on these in
2007, a year in which it currently expects to be supported by favourable market
conditions. The Group believes it has a number of prospects that could
substantially enhance its current production profile in the medium to longer
term, and it intends to use its sound financial position to advance its existing
assets and properties while continuing to seek opportunities globally to secure
further world-class mining assets.



FINANCIAL COMMENTARY FOR THE YEAR TO 31 DECEMBER 2006

Results

Turnover

Group turnover increased by 58.3% to US$3,870.0 million, compared with
US$2,445.3 million in 2005. The increase was mainly due to very strong LME
copper prices which increased to an average of 305.3 cents per pound, 82.7%
above the 2005 financial year. The Group also benefited from improved molybdenum
volumes and higher sales at the transport and water divisions. These factors
were partly offset by increased tolling charges for copper concentrate and lower
molybdenum prices.

Turnover from copper concentrate and copper cathodes

Turnover from copper concentrate and copper cathode sales from the Group's three
mines increased by 83.5% to US$3,144.7 million, compared with US$1,713.4 million
in 2005. The Group's average realised copper price was 329.5 cents per pound
(2005 - 185.2 cents). Realised copper prices are determined by comparing
turnover (gross of tolling charges for concentrate sales) with sales volumes in
the period.

Realised copper prices in 2006 exceeded LME prices because, in line with
industry practice, concentrate and cathode sales generally provide for
provisional pricing at the time of shipment with final pricing based on the
average market price for future periods (normally 30 days after delivery to the
customer in the case of cathode sales and up to 180 days after delivery to the
customer in the case of concentrate sales). The strong improvement in copper
prices in the first nine months of the year resulted in significant positive
pricing adjustments, although this was partly offset by weakening copper prices
in the final quarter.

In the case of Los Pelambres, pricing adjustments added US$223.5 million in 2006
to initially invoiced sales (before adjusting for tolling charges), comprising
US$136.0 million in respect of sales invoiced in 2005 (net of the reversal of
mark-to-market adjustments made at the end of 2005) which were finally priced in
2006 and US$87.5 million in respect of sales invoiced in 2006 (net of a
mark-to-market provision for open sales at the end of the year of US$110.1
million when the copper price weakened). Pricing adjustments in 2006 at El
Tesoro and Michilla (which relate almost entirely to sales invoiced in the year)
added US$11.7 million and US$8.9 million respectively. El Tesoro and Michilla
also continued to benefit from strong cathode premiums reflecting tight market
conditions in the year. Further details are given in Note 4(a) to the
preliminary results announcement.

Turnover also benefited from a 1.6% increase in copper sales volumes from
460,500 tonnes in 2005 to 467,800 tonnes this year. The increase was mainly due
to timing differences in shipment and loading schedules which resulted in minor
reductions in inventory levels, offsetting the marginal 0.4% decrease in 2006
production to 465,500 tonnes (2005 - 467,300 tonnes).

Tolling charges for copper concentrate at Los Pelambres increased from US$166.9
million in 2005 to US$254.0 million in 2006, mainly as a result of the effect of
the higher copper price on price participation with smelters. Tolling charges
are deducted from concentrate sales in reporting turnover and hence partly
offset the effect of improved copper prices.

Turnover from by-products

Turnover from by-products at Los Pelambres decreased by 5.0% to US$556.3 million
in 2006 compared with US$585.7 million in 2005, mainly due to lower molybdenum
market prices. The realised molybdenum price averaged US$24.6 per pound (2005 -
US$31.4 per pound). Molybdenum prices are also subject to provisional pricing
but as prices remained steady through the year, the realised price did not
differ significantly from the average market price of US$24.8 per pound (2005 -
US$32.0 per pound). Lower molybdenum prices were partly offset by better sales
volumes which increased by 16.5% to 9,900 tonnes as a result of higher
production and, to a lesser extent, lower inventory levels due to shipment
timings. Gold and silver by-product revenues increased significantly to US$42.5
million (2005 - US$22.9 million) due to higher metal prices and increased
volumes.

Turnover from the transport and water divisions

Turnover from the transport division (FCAB) increased by US$12.8 million or
13.8% to US$105.3 million, reflecting increased rail volumes and higher tariffs
in 2006. Tariffs are indexed to cost factors including inflation, the Chilean
peso-US dollar exchange rate and fuel costs.

Turnover at Aguas de Antofagasta, which operates the Group's water business,
increased by US$10.0 million or 18.6% to US$63.7 million in 2006, mainly due to
increased volumes as a result of both higher domestic and industrial
consumption.

Operating profit from subsidiaries and joint ventures and EBITDA

Operating profit from subsidiaries and joint ventures increased by 86.1% from
US$1,506.4 million in 2005 to US$2,804.1 million in 2006.

Operating profit at the mining division increased by 88.5% from US$1,453.9
million to US$2,740.0 million, due to significantly improved turnover as
explained above (resulting mainly from higher copper prices and improved
molybdenum volumes), partly offset by increased operating costs. Excluding
by-product credits (which are reported as part of turnover) and tolling charges
for concentrates (which are deducted from turnover), weighted average cash costs
for the Group (comprising on-site and shipping costs in the case of Los
Pelambres and cash costs in the case of the other two operations) increased from
58.3 cents per pound in 2005 to 68.0 cents per pound. This reflected the impact
of higher input costs at all three mines as well as lower grades and recoveries
at El Tesoro and lower grades at Michilla. Operating profits were also affected
by losses on commodity derivatives (including net mark-to-market adjustments) of
US$84.5 million at Michilla and El Tesoro, compared with a loss of US$68.6
million in 2005. These mainly resulted from commodity derivatives entered into
in 2005 which matured in 2006. Exploration and corporate costs did not change
significantly in 2006 compared with 2005.

Operating profit (excluding income from associate) at the transport division
increased by US$5.2 million to US$32.6 million, reflecting the improved rail
tariffs and higher rail volumes. Aguas de Antofagasta (whose revenues and costs
are mainly denominated in Chilean pesos) contributed US$31.5 million compared to
US$25.1 million last year, benefiting from higher sales and the stronger
exchange rate.

EBITDA (earnings before interest, depreciation, tax and amortisation) in 2006
was US$2,957.3 million, compared with US$1,674.1 million in 2005, up 76.7%. This
is calculated by adding back to operating profit from subsidiaries and joint
ventures, depreciation and amortisation of US$145.0 million (2005 - US$128.0
million), losses on disposals of property, plant and equipment of US$8.2 million
(2005 - US$9.7 million) and in 2005 the impairment provision at Michilla of
US$30.0 million.

The Group's share of net profit from its 30% investment in Antofagasta Terminal
Internacional S.A. ('ATI') was US$1.1 million (2005 - US$0.9 million).


Net finance income

Net finance income in 2006 was US$53.8 million, compared with US$29.0 million in
2005.

Interest receivable increased from US$39.7 million in 2005 to US$78.3 million in
2006, due to the higher level of cash and deposit balances and higher market
interest rates compared with 2005. Interest expense (excluding the
mark-to-market effect of interest rate derivatives) increased slightly from
US$26.0 million in 2005 to US$26.4 million, reflecting the increase in market
interest rates, which offset the effect of the decrease in the level of
borrowings through loan repayments during the year.

Foreign exchange gains included in finance items were US$1.6 million in 2006,
compared with US$13.3 million in the previous year. The 2005 results benefited
from retranslation of peso-denominated inter-company receivables and cash
balances due to stronger period end exchange rates. Mark-to-market gains on
interest rate and exchange derivatives were US$0.3 million in 2006 compared with
US$2.0 million in 2005.

Profit before tax

The resulting profit before tax for the period was US$2,859.0 million compared
to US$1,536.3 million in 2005, reflecting the improved operating results and
increased finance income.

Income tax expense

The rate of first category (i.e. corporation) tax in Chile was 17% for both 2006
and 2005. New tax legislation on Chilean mining companies was passed into law
with effect from 1 January 2006. This legislation established an additional tax
of up to 5% of tax-adjusted operating profit, with the option for mining
companies to elect for a lower rate of 4% by entering into a tax stability
regime for a period of 12 years, after which the rate of 5% will apply. For 2006
and 2007, 50% of the new mining tax can be offset against first category tax and
the remaining 50% is tax deductible (i.e. an allowable expense in determining
liability to first category tax). From 2008, when the ability to offset will no
longer be available, 100% of the new mining tax will be tax deductible. Los
Pelambres, El Tesoro and Michilla opted in 2005 to enter into this new tax
stability agreement, and hence the effect of the legislation is to increase the
effective tax rate of these three operations (before taking into account
deductibility against corporation tax) by approximately 2% in 2006 and 2007 and
4% thereafter. In addition to first category tax and the new mining tax, the
Group incurs withholding taxes on the remittance of profits from Chile.
Withholding tax is levied on remittances of profits from Chile at 35% less first
category tax already paid. Accordingly, the effective tax rate of withholding
tax for the purpose of paying dividends to Group shareholders is approximately
18% of the amount remitted or expected to be remitted.

Tax (including deferred tax) amounted to US$664.9 million (2005 - US$308.1
million), mainly reflecting the increased profit for the year. Including both
current and deferred taxes, this comprised corporate tax of US$476.6 million
(2005 - US$267.9 million), the new Chilean mining tax of US$56.6 million (2005 -
US$0.5 million relating to initial deferred tax charges) and withholding tax
charges of US$134.1 million (2005 - US$59.9 million). This was partly offset by
exchange gains on corporate tax balances of US$2.4 million (2005 - US$20.2
million).

As a result of these factors, the effective tax rate for the Group in 2006 was
23.3% (2005 - 20.1%), compared with the Chilean statutory tax rate of 17%.

Minority interests

Profit for the financial year attributable to minority shareholders was US$839.8
million, compared with US$502.4 million in 2005. The increase mainly resulted
from the improvement in Group profit after tax from US$1,228.2 million in 2005
to US$2,194.1 million in 2006.

As a percentage of Group profit after tax, minority interests represented 38.3%
in 2006 compared with 40.9% in 2005. The decrease was mainly due to the
elimination of the minority interest in El Tesoro through the acquisition of
Equatorial Mining Limited in August 2006.

Earnings per share

As a result of the factors set out above, profit for the 2006 financial year
attributable to equity shareholders of the Company was US$1,354.3 million
compared with US$725.8 million in 2005.

Accordingly, basic earnings per share were 137.4 cents in 2006 compared with
73.6 cents for 2005, an increase of 86.7%. Earnings per share have been restated
to reflect the impact of the 4-for-1 bonus issue on 19 June 2006.

Derivative financial instruments

The Group occasionally uses derivative financial instruments to reduce exposure
to commodity price, interest rate and foreign exchange movements. The Group does
not use such derivative instruments for speculative trading purposes and it did
not apply the hedge accounting provisions of IAS 39 'Financial Instruments:
Recognition and Measurement' in either 2005 or 2006. Accordingly, derivatives
have been measured at fair value through the income statement in both financial
years, in either other operating income or expense (in the case of commodity
derivatives) or finance income or finance cost (in the case of interest and
foreign exchange derivatives).

The hedge accounting provisions of IAS 39 will be applied from 1 January 2007
and changes in the fair value of derivative financial instruments that are
designated and effective as hedges of future cash flows will be recognised
directly in equity, with such amounts subsequently recognised in the income
statement in the period when the hedged item affects profit or loss.

At 31 December 2006 Michilla, which is the Group's highest cost operation, had
min/max instruments for 12,000 tonnes of copper production, with a weighted
average floor of 281.2 cents per pound and a weighted average cap of 337.9 cents
per pound. These instruments had an average duration of 6.5 months and a maximum
duration of one year. Michilla also had futures for 9,600 tonnes of copper
production with an average price of 306.9 cents, a weighted average duration of
6.5 months and a maximum duration of twelve months. These investments represent
50% of Michilla's forecast production for 2007. From a cash flow perspective the
Group's exposure to the copper price during 2007 will be reduced by the extent
of these instruments.

Details of the mark-to-market position of these instruments, together with
details of interest and commodity derivatives held by the Group, are given in
Note 4(b) to this preliminary results announcement.


Commodity price sensitivities

Based on 2006 amounts and without taking into account the effects of provisional
pricing and any hedging activity, a one-cent change in the average copper price
would affect turnover and profit before tax by US$10.3 million and earnings per
share by 0.5 cents. Similarly, a one-dollar change in the average molybdenum
price would affect turnover and profit before tax by US$21.6 million and
earnings per share by 1.1 cents.


Acquisitions and disposals

The Group acquired a 100% interest in Tethyan Copper Company Limited ('Tethyan')
on 20 April 2006 for cash consideration (including transaction costs) of
US$170.4 million, following a recommended cash offer first made on 14 February
2006. On 14 February, the Group also separately entered into an agreement with
BHP Billiton whereby BHP Billiton's right to claw-back a material interest in
certain of Tethyan's mineral interests ('Claw-Back Right') would be extinguished
for a consideration of US$60 million. On 22 September 2006, the Group entered
into a joint venture agreement with Barrick Gold Corporation ('Barrick Gold') to
establish a 50:50 joint venture over Tethyan's mineral interests in Pakistan.
This was achieved through the indirect sale of a 50% interest in Tethyan for a
cash consideration of US$86.8 million. The Group and Barrick Gold each
contributed US$30 million to Tethyan to enable it to extinguish BHP Billiton's
Claw-Back Right on 22 November 2006.

The Group also acquired a 100% interest in Equatorial Mining Limited
('Equatorial') for a cash consideration (including transaction costs) of
US$406.1 million. Equatorial's principal asset was a 39% interest in El Tesoro,
the remaining 61% of which was already owned by the Group. There is currently a
claim going through the Australian Courts against Equatorial in relation to
certain of Equatorial's assets. The claim is being defended and its effect is
unlikely to be material to the Group. On 11 December 2006, the Group entered
into an agreement to sell Equatorial's North American interests through the sale
of Equatorial North America Inc. to Idaho General Mines Inc. for a cash
consideration for US$4.9 million (which was received in January 2007) and
further contingent consideration of US$6.0 million will be receivable should
certain conditions be met (see Note 22(b) to this preliminary results
announcement).


Cash flows, cash and debt

Cash flows from operations were US$2,810.1 million in 2006 compared with
US$1,647.5 million last year, reflecting the improved operating results adjusted
for depreciation, amortisation and working capital movements. A dividend of
US$0.4 million was received from the Group's investment in ATI.

Cash tax payments in the year were US$498.2 million (2005 - US$343.8 million),
comprising corporation tax of US$426.5 million, mining tax of US$9.9 million and
withholding tax of US$61.8 million. These amounts differ from the current tax
charge in the consolidated income statement of US$592.2 million (2005 - US$285.0
million) because cash tax payments partly comprise monthly payments on account
in respect of current year profits and partly comprise the settlement of the
outstanding balance for the previous year. The increased payments reflect higher
profits in each successive year from 2004 (thereby increasing both monthly
payments on account for the current year as well as settlement of the
outstanding balance for the previous year), higher withholding tax payments and,
to a lesser extent, monthly payments on account in 2006 for the new mining tax.

Net cash outflow from acquisitions amounted to US$487.5 million; this amount is
stated net of cash balances acquired of US$119.0 million. The net cash outflow
comprised US$199.4 million in respect of Tethyan (net of cash balances acquired
of US$1.0 million) and US$288.1 million in respect of Equatorial (net of cash
balances acquired of US$118.0 million).

Net cash inflow from disposals amounted to US$84.3 million; this is stated net
of cash balances disposed of US$2.5 million. The net cash inflow comprised
US$85.7 million (net of cash balances disposed of US$1.1 million) on the
disposal of 50% of Tethyan to Barrick Gold less an outflow of cash balances of
US$1.4 million when Equatorial Mining North America Inc. was sold; the proceeds
of US$4.9 million for this latter disposal were received in January 2007.

Capital expenditure in 2006 was US$506.6 million compared with US$223.0 million
in 2005. This included expenditure of US$256.9 million (on a cash basis)
relating to the Mauro tailings dam project (2005 - US$90.0 million) and US$134.0
million relating to the plant expansion at Los Pelambres (2005 - US$10.7
million).

Dividends (including special dividends) paid to ordinary shareholders of the
Company this year were US$236.6 million (2005 - US$155.4 million), which related
to the final dividend declared in respect of the previous year and the interim
dividend in respect of the current year, and reflected the increased dividend
per share paid in 2006 compared with 2005. Dividends paid by subsidiaries to
minority shareholders were US$630.6 million (2005 - US$385.6 million),
principally due to increased distributions by Los Pelambres and El Tesoro.

Repayments of borrowings and finance leasing obligations in 2006, mainly at Los
Pelambres and El Tesoro, were US$111.4 million, which included voluntary
prepayments of US$14.0 million at El Tesoro. In 2005, the repayment of
borrowings amounted to US$139.6 million, which included voluntary prepayments of
US$36.2 million at El Tesoro. New borrowings in the period amounted to US$3.8
million (2005 - US$0.2 million).

Details of other cash inflows and outflows in the period are contained in the
Consolidated Cash Flow Statement.

At 31 December 2006, the Group had cash and cash equivalents of US$1,805.5
million (2005 - US$1,316.8 million). Excluding the minority share in each
partly-owned operation, the Group's attributable share of total cash and cash
equivalents was US$1,592.7 million (2005 - US$1,085.8 million).

Total Group borrowings at 31 December 2006 were US$358.7 million (2005 -
US$465.3 million). Of this, US$230.0 million (2005 - US$283.6 million) is
proportionally attributable to the Group after excluding the minority
shareholdings in partly-owned operations. The decrease in debt is mainly due to
further principal repayments at Los Pelambres and El Tesoro as explained above.

Balance Sheet

Net equity (i.e. equity attributable to ordinary shareholders of the Company)
increased from US$2,041.7 million at 1 January 2006 to US$3,155.1 million at 31
December 2006, relating mainly to profit after tax and minority interests for
the period less ordinary dividends declared and paid in the year.

Minority interests increased from US$721.3 million at 1 January 2006 to US$793.0
million at 31 December 2006, principally reflecting the minority's share of
profit after tax, less the minority's share of the dividends paid by
subsidiaries in the year and the elimination of the minority interest in El
Tesoro through the acquisition of Equatorial Mining Limited.


Consolidated Income Statement
                                               Year ended  Year ended
                                                 31.12.06    31.12.05
                                        Notes       US$'m       US$'m

Group turnover                           2,3      3,870.0     2,445.3

Total operating costs                           (1,065.9)     (938.9)
                                                 --------   ---------
Operating profit from subsidiaries and
joint ventures                           2,3      2,804.1     1,506.4

Share of income from associate            12          1.1         0.9
                                                 --------   ---------
Total profit from operations and          2       2,805.2     1,507.3
associates
                                                 --------   ---------
Investment income                                    78.3        39.7
Interest expense                                   (26.4)      (26.0)
Other finance items                                   1.9        15.3
                                                 --------   ---------

Net finance income                        5          53.8        29.0
                                                 --------   ---------
Profit before tax                                 2,859.0     1,536.3

Income tax expense                        6       (664.9)     (308.1)
                                                 --------   ---------
Profit for the financial year                     2,194.1     1,228.2
                                                 ========   =========

Attributable to:
                                                 --------   ---------
Minority interests                                  839.8       502.4

Equity holders of the Company (net                1,354.3       725.8
earnings)                                        --------   ---------

                                                 US cents    US cents
                                                             Restated
                                                                  (*)
Basic earnings per share                  7         137.4        73.6
                                                 ========   =========

Dividends to ordinary shareholders of
the Company

Per share                                        US cents    US cents
                                                             Restated
Dividends per share proposed in                                   (*)
relation to the year                      8                  
                                                             
- ordinary dividend (interim)                         3.2         3.2
- ordinary dividend (final)                           5.0         4.8
- special dividend (interim)                          2.0           -
- special dividend (final)                           38.0        14.0
                                                 --------   ---------
                                                     48.2        22.0
                                                 ========   =========
Dividends per share paid in the year
and deducted from net equity
- ordinary dividend (interim)                         3.2         3.2
- ordinary dividend (final)                           4.8         4.8
- special dividend (interim)                          2.0           -
- special dividend (final)                           14.0         8.0
                                                 --------   ---------
                                                     24.0        16.0
                                                 ========   =========

In aggregate                                        US$'m       US$'m

Dividends proposed in relation to the     8         475.2       216.9
year                                             ========   =========

Dividends paid in the year and deducted
from net equity                                     236.6       157.7
                                                 ========   =========

Turnover and operating profit are derived from continuing operations.

(*) Earnings per share and dividends per share have been restated for the effect
of the 4-for-1 bonus issue on 19 June 2006. There was no potential dilution of
earnings per share in any period set out above.


Consolidated Balance Sheet
                                                          At        At
                                                    31.12.06  31.12.05
                                  Notes                US$'m     US$'m
Non-current assets

Intangible assets                   9                  205.3      97.7
Property, plant and equipment      10                2,373.7   1,820.0
Investment property                11                    3.2       3.4
Investment in associate            12                    3.5       2.8
Available for sale investments     13                    6.2       0.1
Deferred tax assets                18                    3.1       6.6
                                                    --------  --------
                                                     2,595.0   1,930.6
                                                    --------  --------
Current assets

Inventories                        14                  120.3      98.8
Trade and other receivables                            549.4     428.1
Current tax assets                                       7.5       5.3
Derivative financial instruments    4                    7.3         -
Cash and cash equivalents          21                1,805.5   1,316.8
                                                    --------  --------
                                                     2,490.0   1,849.0
                                                    --------  --------

Total assets                                         5,085.0   3,779.6
                                                    ========  ========

Current liabilities

Short-term borrowings              15                 (97.6)    (97.2)
Derivative financial instruments    4                      -    (40.3)
Trade and other payables                             (211.5)   (142.9)
Current tax liabilities                              (204.8)   (108.7)
                                                    --------  --------
                                                     (513.9)   (389.1)
                                                    --------  --------
Non-current liabilities

Medium and long term borrowings    15                (261.1)   (368.1)
Trade and other payables                               (4.8)     (3.5)
Post-employment benefit            16                 (24.1)    (20.6)
obligations
Long-term provisions               17                  (9.8)     (9.8)
Deferred tax liabilities           18                (323.2)   (225.5)
                                                    --------  --------
                                                     (623.0)   (627.5)
                                                    --------  --------

Total liabilities                                  (1,136.9) (1,016.6)
                                                    ========  ========

Net assets                                           3,948.1   2,763.0
                                                    ========  ========

Equity

Share capital                                           89.8      16.6
Share premium                                          199.2     272.4
Translation reserves                                    12.3      16.6
Retained earnings                                    2,853.8   1,736.1
                                                    --------  --------
Net equity attributable to equity
holders of the Company                               3,155.1   2,041.7

Minority interests                                     793.0     721.3
                                                    --------  --------
Total equity                                         3,948.1   2,763.0
                                                    ========  ========


The preliminary information was approved by the Board of Directors on 12 March
2007.


Consolidated Cash Flow Statement

                                                   Year ended Year ended
                                                     31.12.06   31.12.05
                                           Notes        US$'m      US$'m

Cash flows from operations                  20        2,810.1    1,647.5
Interest paid                                          (24.6)     (23.3)
Dividends from associate                    12            0.4        1.0
Income tax paid                                       (498.2)    (343.8)
                                                     --------   --------
Net cash from operating activities                    2,287.7    1,281.4
                                                     --------   --------

Investing activities
Acquisition of subsidiary                   22        (487.5)          -
Disposal and part-disposal of subsidiaries  23           84.3          -
Recovery of Chilean VAT paid on
purchase of water concession                              8.7        7.7
Purchases of property, plant and equipment            (506.6)    (223.0)
Proceeds from sale of property,
plant and equipment                                         -        4.1
Interest received                                        77.6       37.9
                                                     --------   --------
Net cash used in investing activities                 (823.5)    (173.3)
                                                     --------   --------

Financing activities
Dividends paid to equity holders of the Company       (236.6)    (155.4)
Dividends paid to preference
shareholders of the Company                             (0.2)      (0.2)
Dividends paid to minority interests                  (630.6)    (385.6)
Net proceeds from issue of new borrowings                 3.8        0.2
Repayments of borrowings                              (109.6)    (126.2)
Repayments of obligations under finance leases          (1.8)     (13.4)
                                                     --------   --------
Net cash used in financing activities                 (975.0)    (680.6)
                                                     --------   --------

Net increase in cash and cash equivalents               489.2      427.5
                                                     ========   ========

Cash and cash equivalents at
beginning of the year                                 1,316.8      881.4
Net increase in cash and cash equivalents               489.2      427.5
Effect of foreign exchange rate changes                 (0.5)        7.9
                                                     --------   --------
Cash and cash equivalents at end of the year  21      1,805.5    1,316.8
                                                     ========   ========



Consolidated Statement of Changes in Equity

For the years ended 31 December 2005 and 2006



                                Share   Share Translation Retained       Net  Minority   Total
                              capital premium    reserves earnings    equity interests
                                US$'m   US$'m       US$'m    US$'m     US$'m     US$'m   US$'m

Balance at 1 January 2005        16.6   272.4         8.5  1,168.0   1,465.5     604.5 2,070.0

Profit for the financial year       -       -           -    725.8     725.8     502.4 1,228.2
Currency translation adjustment     -       -         8.1        -       8.1         -     8.1
Dividends paid                      -       -           -  (157.7)   (157.7)   (385.6) (543.3)
                               ------  ------     -------  -------    ------   ------- -------
Balance at 31 December 2005                  
and 1 January 2006               16.6   272.4        16.6  1,736.1   2,041.7     721.3 2,763.0

Profit for the  financial year      -       -           -  1,354.3   1,354.3     839.8 2,194.1
Currency translation adjustment     -       -       (4.3)        -     (4.3)         -   (4.3)
Capitalisation of share
premium on bonus issue of 
ordinary shares (see Note 19)    73.2  (73.2)           -        -         -         -       -
Acquisition of minority
interest (see Note 22(b))           -       -           -        -         -   (137.5) (137.5)
Dividends paid                      -       -           -  (236.6)   (236.6)   (630.6) (867.2)
                               ------  ------     -------  -------    ------   ------- -------
Balance at 31 December 2006      89.8   199.2        12.3  2,853.8   3,155.1     793.0 3,948.1
                               ======  ======     =======  =======    ======   ======= =======


There were no items of recognised income and expense in either year other than
the profit for the financial year and the currency translation adjustment.


Notes


1.      General information and accounting policies

a) General information

This preliminary results announcement is for the year ended 31 December 2006.
While the financial information contained in this preliminary results
announcement has been computed in accordance with International Financial
Reporting Standards ('IFRS'), this announcement does not itself contain
sufficient information to comply with IFRS. For these purposes, IFRS comprise
the Standards issued by the International Accounting Standards Board ('IASB')
and Interpretations issued by the International Financial Reporting
Interpretations Committee ('IFRIC') that have been endorsed by the European
Union.

This preliminary results announcement does not constitute the Group's statutory
accounts as defined in section 240 of the Companies Act 1985. The statutory
accounts for the year ended 31 December 2006 will be approved by the Board in
April 2007 and, with the exception of the information contained in Notes 28 to
30, will be reported on by the auditors and subsequently filed with the
Registrar of Companies. Accordingly, the financial information included in this
preliminary results announcement for 2006 is unaudited.

The information contained in this announcement for the year ended 31 December
2005 also does not constitute statutory accounts. A copy of the statutory
accounts for that year has been delivered to the Registrar of Companies. The
auditors' report on those accounts was unqualified and did not contain
statements under section 237(2) of the Companies Act 1985 (regarding adequacy of
accounting records and returns) or under section 237(3) (regarding provision of
necessary information and explanations). The comparative information contained
in Notes 28 to 30 of this preliminary results announcement is not derived from
the statutory accounts for the year ended 31 December 2005 and is accordingly
not covered by the auditors' report.

b) Accounting policies

The preliminary results announcement has been prepared on the basis of
accounting policies consistent with those applied in the financial statements
for the year ended 31 December 2005 except in relation to jointly controlled
entities. The Group's previously stated policy was to account for jointly
controlled entities under the equity method. Under the Group's revised policy,
jointly controlled entities are accounted for under the proportionate
consolidation method, which is the preferred benchmark under IAS 31 'Interests
in Joint Ventures'. This change does not have any effect on the financial
statements for prior periods and therefore no restatement of prior period
information is required.

c) Changes in estimates

Previously mining properties, including capitalised financing costs, were
depreciated in proportion to the volume of ore extracted in the year compared
with total proven, probable and possible reserves at the beginning of the year.
From 1 January 2006, such depreciation is based on comparison with proven and
probable reserves only at the beginning of the year. The effect of this change
is to increase the depreciation charge in the year ended 31 December 2006 by
US$1.6 million. As a change in estimates, prior year comparatives have not been
restated, but the effect would have been to increase the depreciation charge by
US$2.4 million in 2005.

d) Restatement of comparative amounts for bonus issue

Comparatives for earnings per share and dividend per share have been restated
for the effect of the 4-for-1 bonus issue of ordinary shares on 19 June 2006
(see Note 19).



2.      Total profit from operations and associates
                                                                  Year      Year
                                                                 ended     ended
                                                              31.12.06  31.12.05
                                                                 US$'m     US$'m

Turnover                                                       3,870.0   2,445.3
Cost of sales                                                  (805.1)   (685.6)
                                                              --------  --------
Gross profit                                                   3,064.9   1,759.7
Administrative expenses                                        (152.6)   (132.0)
Closure provision                                                (0.6)       3.4
Severance charges                                                (7.7)     (3.9)
Exploration costs                                               (21.5)    (22.4)
Other operating income                                            10.3       5.4
Other operating expenses                                        (88.7)   (103.8)
                                                              --------  --------
Operating profit from subsidiaries and joint ventures          2,804.1   1,506.4
Share of income from associate                                     1.1       0.9
                                                              --------  --------
Total profit from operations and associates                    2,805.2   1,507.3
                                                              ========  ========

3.      Segmental analysis

Based on risks and returns, the Directors consider the primary reporting format
is by business segment and the secondary reporting format is by geographical
segment. The Group considers its business segments to be Los Pelambres, El
Tesoro, Michilla, Exploration, Railway and other transport services and the
Water concession. Corporate and other items principally relate to the costs
incurred by the Company and Antofagasta Minerals S.A. (the Group's mining
corporate centre), which are not allocated to any individual business segment.
The classification reflects the Group's management structure. The amounts
presented for each business segment exclude any amounts relating to the
investment in Antofagasta Terminal Internacional S.A., an associate which is
held through the Railway and other transport services segment.

a) Turnover, EBITDA and operating profit /(loss) from subsidiaries and
joint ventures analysed by business segment

                                                          Operating profit /(loss)
                                                          ------------------------
                                                             from subsidiaries
                                                            -------------------
                          Turnover           EBITDA          and joint ventures
                         ----------         --------        --------------------
                          Year     Year     Year     Year         Year        Year
                         ended    ended    ended    ended        ended       ended
                      31.12.06 31.12.05 31.12.06 31.12.05     31.12.06    31.12.05
                         US$'m    US$'m    US$'m    US$'m        US$'m       US$'m

Los Pelambres          2,701.3  1,749.8  2,297.0  1,420.5      2,223.7     1,350.4
El Tesoro                664.8    372.2    456.0    203.2        409.9       172.9
Michilla                 334.9    177.1    158.4     16.3        145.5      (31.1)
Exploration                  -        -   (21.5)   (22.4)       (21.5)      (22.4)
Corporate and 
other items                  -        -   (16.9)   (15.6)       (17.6)      (15.9)
                      -------- -------- -------- --------     --------    --------
Mining                 3,701.0  2,299.1  2,873.0  1,602.0      2,740.0     1,453.9
Railway and other 
transport services       105.3     92.5     42.9     38.2         32.6        27.4
Water concession          63.7     53.7     41.4     33.9         31.5        25.1
                      ======== ======== ======== ========     ========    ========
Group turnover
(segment revenue),
EBITDA and operating 
profit from 
subsidiaries and 
joint ventures
(segment result)       3,870.0  2,445.3  2,957.3  1,674.1      2,804.1     1,506.4
                      ======== ======== ======== ========     ========    ========

Notes to turnover by business segment (segment revenue)


(i) Turnover by business segment equates to segment revenue as defined by IAS 14. 
Turnover from Railway and other transport services is stated after eliminating 
inter-segmental sales to the mining division of US$9.6 million
(2005 - US$8.8 million).


(ii)                 Turnover includes the effect of both final pricing and
mark-to-market adjustments to provisionally priced sales of copper and
molybdenum concentrates and copper cathodes. Further details of such adjustments
are given in Note 4(a).


(iii)               Turnover does not include the effect of gains and losses on
commodity derivatives, which are included as part of operating profit in other
operating income or expense. Further details of such gains or losses are given
in Note 4(b).

(iv)               Los Pelambres produces and sells copper and molybdenum
concentrates. It is also credited for the gold and silver content in the copper
concentrate it sells. Turnover by type of metal is analysed below to show
separately the amounts prior to deduction of tolling charges, the tolling
charges involved and the net amounts included in turnover. El Tesoro and
Michilla do not generate by-products from their copper cathode operations.


(v)                 On a Group basis, total copper revenues amounted to
US$3,144.7 million (2005 - US$1,713.4 million) comprising copper concentrate
sales at Los Pelambres of US$2,145.0 million (2005 - US$1,164.1 million) and
copper cathode sales at El Tesoro and Michilla of US$999.7 million (2005 -
US$549.3 million).


Notes to EBITDA and operating profit/(loss) from subsidiaries and joint ventures
by business segment (segment result)


(vi)               Operating profit for the separate businesses equates to
segment result as defined by IAS 14. This excludes the share of income from
associate of US$1.1 million (2005 - US$0.9 million).


(vii)              EBITDA is calculated by adding back depreciation,
amortisation and disposals of plant, property and equipment and impairment
charges (see Note 3(b)) to operating profit from subsidiaries.


(viii)            EBITDA and operating profit are stated after deducting losses
on commodity derivatives (including both losses realised in each period and
period-end mark-to-market adjustments) at El Tesoro of US$44.8 million (2005 -
US$24.8 million) and Michilla of US$39.7 million (2005 - US$43.8 million).
Further details are given in Note 4(b).


(ix)                Operating profit in 2005 is also stated after deducting an
impairment charge against the carrying value of property, plant and equipment at
Michilla of US$30.0 million. There was no comparable impairment charge (see Note
3(b)) in the year ended 31 December 2006.


Turnover at Los Pelambres by mineral

                      Before deducting tolling  
                              charges            Tolling charges   Net of tolling charges
                      ------------------------ ----------------- ------------------------
                       Year ended   Year ended     Year     Year  Year ended   Year ended
                         31.12.06     31.12.05    ended    ended    31.12.06     31.12.05
                                               31.12.06 31.12.05
                            US$'m        US$'m    US$'m    US$'m       US$'m        US$'m

Copper                    2,399.0      1,331.0  (254.0)  (166.9)     2,145.0      1,164.1
Molybdenum                  536.4        588.4   (22.6)   (25.6)       513.8        562.8
Gold and silver              43.1         23.4    (0.6)    (0.5)        42.5         22.9
                          -------      -------  -------  -------     -------      -------
Los Pelambres             2,978.5      1,942.8  (277.2)  (193.0)     2,701.3      1,749.8
                          =======      =======  =======  =======     =======      =======


b)  Depreciation and amortisation, loss on disposal of property, plant and 
equipment and impairment charges by operation

                         Depreciation and       
                           amortisation         Loss on disposals     Impairment charge
                     ------------------------ --------------------- ---------------------
                      Year ended   Year ended Year ended Year ended Year ended Year ended
                        31.12.06     31.12.05   31.12.06   31.12.05   31.12.06   31.12.05
                           US$'m        US$'m      US$'m      US$'m      US$'m      US$'m

Los Pelambres               72.8         66.6        0.5        3.5          -          -
El Tesoro                   43.4         29.1        2.7        1.2          -          -
Michilla                    10.4         13.8        2.5        3.6          -       30.0
Corporate and other items    0.3          0.3        0.4          -          -          -
                         -------      -------    -------    -------    -------    -------
Mining                     126.9        109.8        6.1        8.3          -       30.0
Railway and other
transport services           8.4          9.5        1.9        1.3          -          -
Water concession             9.7          8.7        0.2        0.1          -          -
                         -------      -------    -------    -------    -------    -------
                           145.0        128.0        8.2        9.7          -       30.0
                         =======      =======    =======    =======    =======    =======

Other non-cash expenses relate to severance and closure costs and are disclosed
for the Group in Note 2.

c) Capital expenditure by business segment

                                          Year      Year
                                         ended     ended
                                      31.12.06  31.12.05
                                         US$'m     US$'m

Los Pelambres                            463.5     101.4
El Tesoro                                 16.3      39.6
Michilla                                   7.7      18.7
Corporate and other items                 20.5       1.6
                                      --------  --------
Mining                                   508.0     161.3
Railway and other transport services      25.2      23.2
Water concession                           5.8       1.8
                                      --------  --------
                                         539.0     186.3
                                      ========  ========

Capital expenditure represents purchases of property, plant and equipment stated
on an accruals basis (see Note 10) and may therefore differ from the amount
included in the cash flow statement.


d) Assets and liabilities by business segment

                            Segment assets   Segment liabilities   Segment net assets
                           ----------------  -------------------- --------------------
                               Year     Year      Year       Year      Year       Year
                              ended    ended     ended      ended     ended      ended
                           31.12.06 31.12.05  31.12.06   31.12.05  31.12.06   31.12.05
                              US$'m    US$'m     US$'m      US$'m     US$'m      US$'m
Los Pelambres               2,103.4  1,648.2   (125.5)     (72.5)   1,977.9    1,575.7
El Tesoro                     591.8    392.6    (53.3)     (56.5)     537.8      336.1
Michilla                       67.2     61.6    (24.8)     (47.5)      42.4       14.1
Corporate and other items     145.8      8.5    (12.3)     (11.4)     133.5      (2.9)
                            -------  -------   -------    -------   -------     ------
Mining                      2,908.2  2,110.9   (215.9)    (187.9)   2,691.6    1,923.0
Railway and other 
transport services            158.8    133.8    (25.2)     (21.7)     133.6      112.1
Water concession              181.7    199.9     (9.1)      (7.5)     172.6      192.4
                            -------  -------   -------    -------   -------     ------
                            3,248.7  2,444.6   (250.2)    (217.1)   2,997.8    2,227.5
                            =======  =======   =======    =======   =======     ======

Assets and liabilities of Tethyan Copper Company Limited (see Note 22) have been
included within Corporate and other items.

Segment assets and liabilities are reconciled to entity assets and liabilities
through unallocated items as follows:

                           Segment assets    Segment liabilities   Segment net assets
                          ----------------  --------------------  --------------------
                              Year     Year       Year       Year      Year       Year
                             ended    ended      ended      ended     ended      ended
                          31.12.06 31.12.05   31.12.06   31.12.05  31.12.06   31.12.05
                             US$'m    US$'m      US$'m      US$'m     US$'m      US$'m
Segment
assets/(liabilities)       3,248.7  2,444.6    (250.2)    (217.1)   2,997.8    2,227.5
Investment property            3.2      3.4          -          -       3.2        3.4
Investment in associate        3.5      2.8          -          -       3.5        2.8
Available for sale 
investment                     6.2      0.1          -          -       6.2        0.1
Derivative financial
instruments                    7.3        -          -          -       7.3          -
Deferred tax
assets/(liabilities)           3.1      6.6    (323.2)    (225.5)   (319.4)    (218.9)
Current tax
assets/(liabilities)           7.5      5.3    (204.8)    (108.7)   (197.3)    (103.4)
Cash and cash
equivalents/(borrowings)   1,805.5  1,316.8    (358.7)    (465.3)   1,446.8      851.5
                           -------  -------    -------    -------   -------     ------
Entity 
assets/(liabilities)       5,085.0  3,779.6  (1,136.9)  (1,016.6)   3,948.1    2,763.0
                           =======  =======    =======    =======   =======     ======




e)  Geographical analysis of turnover by location of customer (geographical segment)

                                   Sales
                                  -------
                                 Year     Year
                                ended    ended
                             31.12.06 31.12.05
                                US$'m    US$'m
Europe
- United Kingdom                  8.1     34.2
- Switzerland                   396.5    148.4
- Rest of Europe                877.1    527.2

Latin America
- Chile                         407.5    326.6
- Rest of Latin America         165.2     87.8

North America                   472.7    471.3

Asia
- Japan                       1,008.2    425.9
- Rest of Asia                  534.7    423.9
                              -------  -------
                              3,870.0  2,445.3
                              =======  =======


4.      Derivatives and embedded derivatives

a)        Embedded derivatives - provisionally priced sales


Copper and molybdenum concentrate sale agreements and copper cathode sale
agreements generally provide for provisional pricing of sales at the time of
shipment, with final pricing being based on the monthly average London Metal
Exchange copper price or monthly average molybdenum price for specified future
periods. This normally ranges from 30 to 180 days after delivery to the
customer.


Under IFRS, both gains and losses from the marking-to-market of open sales are
recognised through adjustments to turnover in the income statement and to trade
debtors in the balance sheet. The Group determines mark-to-market prices using
forward prices at each period end for copper concentrate and cathode sales, and
period-end month average prices for molybdenum concentrate sales due to the
absence of a futures market for that commodity.


The mark-to-market adjustments at the end of each period and the effect on
turnover in the income statement for each period are as follows:



                                                            Balance sheet
                                                           ---------------
                                                      net mark to market effect
                                                        ----------------------
                                                              on debtors
                                                             ------------
                                                                At          At 
                                                          31.12.06    31.12.05
                                                             US$'m       US$'m

Los Pelambres - copper concentrate                         (110.1)        33.2
Los Pelambres - tolling charges for                            
copper concentrates                                            7.6           -
Los Pelambres - molybdenum concentrate                       (3.9)      (12.6)
El Tesoro - copper cathodes                                    1.3         0.2
Michilla - copper cathodes                                   (0.6)       (0.1)
                                                           -------     -------
                                                           (105.7)        20.7
                                                           =======     =======


(i) Copper sales
                                     Year     Year     Year        Year     Year     Year
                                    ended    ended    ended       ended    ended    ended
                                 31.12.06 31.12.06 31.12.06    31.12.05 31.12.05 31.12.05
                                    US$'m    US$'m    US$'m       US$'m    US$'m    US$'m
                                      Los       El                  Los       El 
                                Pelambres   Tesoro Michilla   Pelambres   Tesoro Michilla
                                   Copper   Copper   Copper      Copper   Copper   Copper
                              concentrate cathodes cathodes concentrate cathodes cathodes
Provisionally
invoiced gross sales              2,175.5    653.1    326.0     1,176.5    362.7    173.5

Effects of pricing adjustments 
to previous year invoices      
                                   ------   ------   ------      ------   ------   ------
Reversal of mark-to-market
adjustments at the end of the 
previous year                      (33.2)    (0.2)      0.1      (18.6)    (0.8)    (0.4)
Settlement of copper sales
invoiced in the previous year       169.2      2.0      0.6        41.4      0.2    (0.1)
                                   ------   ------   ------      ------   ------   ------
Total effect of adjustments
to previous year invoices
in the current period               136.0      1.8      0.7        22.8    (0.6)    (0.5)

Effects of pricing adjustments 
to current year invoices       
                                   ------   ------   ------      ------   ------   ------
Settlement of copper sales
invoiced in the current year        197.6      8.6      8.8        98.5      9.9      4.2
Mark-to-market adjustments at
the end of the current year       (110.1)      1.3    (0.6)        33.2      0.2    (0.1)
                                   ------   ------   ------      ------   ------   ------
Total effect of adjustments
to current year invoices             87.5      9.9      8.2       131.7     10.1      4.1
                                   ------   ------   ------      ------   ------   ------
Turnover before
deducting tolling charges         2,399.0    664.8    334.9     1,331.0    372.2    177.1
Tolling charges                   (254.0)        -        -     (166.9)        -        -
                                   ------   ------   ------      ------   ------   ------
Turnover net of tolling charges   2,145.0    664.8    334.9     1,164.1    372.2    177.1
                                   ======   ======   ======      ======   ======   ======



Copper concentrate


Copper concentrate sales at Los Pelambres have an average settlement period of
approximately four months from shipment date. At 31 December 2006, sales
totalling 127,100 tonnes remained open as to price, with an average
mark-to-market price of 287.0 cents per pound compared with an average
provisional invoice price of 326.3 cents per pound. At 31 December 2005, copper
concentrate sales totalling 114,500 tonnes remained open as to price, with an
average mark-to-market price of 201.4 cents per pound compared with an average
provisional invoice price of 189.5 cents per pound.


Tolling charges include a mark-to-market gain for copper concentrate sales open
as to price at 31 December 2006 of US$7.6 million (31 December 2005 -
mark-to-market loss of US$1.7 million).


Copper cathodes


Copper cathode sales at El Tesoro and Michilla have an average settlement period
of approximately one month from shipment date. At 31 December 2006, sales
totalling 11,600 tonnes remained open as to price, with an average
mark-to-market price of 286.6 cents per pound compared with an average
provisional invoice price of 294.0 cents per pound. At 31 December 2005, sales
totalling 10,300 tonnes remained open as to price with an average mark-to-market
price of 205.8 cents per pound compared with an average provisional invoice
price of 205.4 cents per pound.


(ii) Molybdenum sales                           Year        Year
                                               ended       ended
                                            31.12.06    31.12.05
                                               US$'m       US$'m
                                                 Los         Los
                                           Pelambres   Pelambres
                                          Molybdenum  Molybdenum
                                         concentrate concentrate

Provisionally invoiced gross sales             547.8       611.1

Effects of pricing adjustments to
previous year invoices                   
                                             -------     -------
Reversal of mark-to-market adjustments 
at the end of the previous year                 12.6      (32.9)
Settlement of molybdenum
sales invoiced in the previous year           (27.5)        32.9
                                             -------     -------
Total effect of adjustments
to previous year invoices in
the current period                            (14.9)           -

Effects of pricing adjustments to
current year invoices                    
                                             -------     -------
Settlement of molybdenum
sales invoiced in the current year               5.9      (10.1)
Mark-to-market adjustments
at the end of the current year                 (2.4)      (12.6)
                                             -------     -------
Total effect of adjustments
to current year invoices                         3.5      (22.7)
                                             -------     -------
Turnover before deducting tolling charges      536.4       588.4
Tolling charges                               (22.6)      (25.6)
                                             -------     -------
Turnover net of tolling charges                513.8       562.8
                                             =======     =======


Molybdenum sales at Los Pelambres have an average settlement period of
approximately three months after shipment date. At 31 December 2006, sales
totalling 2,100 tonnes remained open as to price, with an average mark-to-market
price of US$25.0 per pound compared with an average provisional invoice price of
US$25.5 per pound. At 31 December 2005 sales totalling 1,400 tonnes remained
open as to price, with an average mark-to-market price of US$27.4 per pound
compared with an average provisional invoice price of US$31.2 per pound.


b)       Derivative financial instruments


The Group uses derivative financial instruments to reduce exposure to foreign
exchange, interest rate and commodity price movements. The Group does not use
such derivative instruments for speculative trading purposes. The Group did not
adopt the hedge accounting provisions of IAS 39 'Financial Instruments:
Recognition and Measurement' in the year ended 31 December 2006. Accordingly,
derivatives are measured at each balance sheet date at fair value. Gains and
losses arising from changes in fair value are included in the income statement
for the year, within operating profit from subsidiaries and joint ventures for
commodity derivatives and within net finance costs for exchange and interest
derivatives.


The mark-to-market adjustments at the end of each year and the effect on
operating profit and net finance costs in the income statement for each year are
as follows:

                                     Balance sheet
                                    ---------------
                                   net mark to market
                                       effect on
                                ------------------------
                                  debtors/(creditors)
                                 ---------------------

                                At 31.12.06  At 31.12.05
                                      US$'m        US$'m

Current assets - derivative
financial instruments                   7.3            -
Current liabilities -
derivative financial instruments          -       (40.3)
                                   --------     --------
                                        7.3       (40.3)
                                   ========     ========


                                                          Income statement
                                                          ------------------
                                                      total effect (including
                                                      ------------------------
                                Balance sheet            mark to market and
                               ---------------          --------------------
                         net mark to market effect on   realised amounts on
                         ----------------------------  ---------------------
                             debtors/(creditors)      operating profit/finance cost
                            ---------------------     ------------------------

                           At 31.12.06    At 31.12.05  Year ended   Year ended
                                                         31.12.06     31.12.05
                                 US$'m          US$'m       US$'m        US$'m

Commodity                          7.3         (40.0)      (84.5)       (68.6)
Interest                             -          (0.3)       (0.3)        (0.3)
Exchange                             -              -           -        (0.3)
                              --------      ---------    --------     --------
                                   7.3         (40.3)      (84.8)       (69.2)
                              ========      =========    ========     ========



Commodity derivatives

The Group periodically uses commodity derivatives to reduce its exposure to the
market price of copper. During 2006, the amount charged to operating profit on
commodity derivatives was US$84.5 million, comprising US$44.8 million at El
Tesoro and US$39.7 million at Michilla (2005 - US$68.6 million, comprising
US$24.8 million at El Tesoro and US$43.8 million at Michilla). This comprised
losses on derivatives which matured in 2006 of US$136.3 million (2005 - US$24.1
million) offset by mark-to-market gains outstanding at 31 December 2006 of
US$7.3 million (2005 - US$44.5 million) and reversal of opening mark-to-market
losses of US$44.5 million (2005 - nil). Net of margin calls of US$4.5 million,
this resulted in a net balance sheet position at 31 December 2005 of US$40.0
million. There were no margin calls at 31 December 2006.

At 31 December 2006, the Group had min/max instruments at Michilla for 12,000
tonnes of copper production (2005 - 42,000 tonnes), with a weighted average
floor of 281.2 cents per pound and a weighted average cap of 337.9 cents per
pound (2005 - weighted average floor 115.7 cents per pound; weighted average cap
146.7 cents per pound). These instruments had a weighted average duration of 6.5
months and a maximum duration of one year (2005 - weighted average 5 months and
a maximum duration of one year).

At 31 December 2006, the Group also had futures at Michilla for 9,600 tonnes of
copper production with an average price of 306.9 cents, a weighted average
duration of 6.5 months and a maximum duration of twelve months. It also had
futures to both buy and sell copper production at El Tesoro, with the effect of
swapping COMEX prices for LME prices without eliminating underlying market price
exposure. These have a weighted average price of 286.6 cents, a weighted average
duration of 6.5 months and a maximum duration of one year.


Interest derivatives

The Group did not have any interest derivatives outstanding at 31 December 2006.

At 31 December 2005, the Group had interest rate collars with a notional
principal amount of US$108.7 million, with a weighted average floor of 5.02% and
a weighted average cap of 6.00%. These instruments had a weighted average
duration of seven months. The mark to market loss at 31 December 2005 was US$0.3
million, and the effect on the income statement is included within other finance
items.


Exchange derivatives

The Group did not enter into any exchange derivative instruments during 2006 and
accordingly the effect on the income statement was nil.

During 2005, the Group entered into exchange derivative instruments to buy or
sell Chilean pesos using US dollars with a net notional value of US$33.0
million. The average duration of these derivatives was one month and the net
loss was US$0.3 million. There were no outstanding instruments at 31 December
2005 and the effect on the income statement is included within other finance
items.



5.      Net finance income
                                            Year      Year
                                           ended     ended
                                        31.12.06  31.12.05
                                           US$'m     US$'m

Investment income
Interest receivable                         78.3      39.7
                                        --------  --------

Interest expense
Interest payable                          (24.6)    (23.8)
Amortisation of deferred finance costs     (0.4)     (0.4)
Discount charge relating to provisions     (1.2)     (1.6)
Preference dividends                       (0.2)     (0.2)
                                        --------  --------
                                          (26.4)    (26.0)
                                        --------  --------

Other finance items
Mark-to-market effect of derivatives         0.3       2.0
Foreign exchange                             1.6      13.3
                                        --------  --------
                                             1.9      15.3
                                        --------  --------
                                        --------  --------
Net finance income                          53.8      29.0
                                        ========  ========


6.      Taxation

The tax charge for the year comprised the following:

                                             Year     Year
                                            ended    ended
                                         31.12.06 31.12.05
                                            US$'m    US$'m

Current tax charge
Corporate tax (principally first
category tax in Chile)                     (474.2)  (296.6)
Mining tax (Royalty)                        (58.5)        -
Withholding tax provision                   (61.9)    (8.6)
Foreign exchange gains on                      
corporate tax balances                         2.4     20.2
                                           -------  -------
                                           (592.2)  (285.0)
                                           -------  -------

Deferred tax charge
Corporate tax (principally first
category tax in Chile)                       (2.4)     28.7
Mining tax (Royalty)                           1.9    (0.5)
Withholding tax provision                   (72.2)   (51.3)
                                           -------  -------
                                            (72.7)   (23.1)
                                           -------  -------
Total tax charge (Income tax expense)      (664.9)  (308.1)
                                           =======  =======


Current tax is based on taxable profit for the year. Deferred tax is the tax
expected to be payable or recoverable on temporary differences (i.e. differences
between the carrying amount of assets and liabilities in the financial
statements and the corresponding tax basis used in the computation of taxable
profit). Deferred tax is accounted for using the balance sheet liability method
and is provided on all temporary differences with certain limited exceptions.
The Group incurs withholding taxes on the remittance of profits from Chile and
the other countries in which it operates and deferred tax is provided on
undistributed earnings to the extent that remittance is probable in the
foreseeable future.


The rate of first category (i.e. corporation) tax in Chile was 17% for both 2006
and 2005. During 2005, new tax legislation on Chilean mining companies was
passed into law with effect from 1 January 2006. This legislation sets an
additional tax of up to 5% of tax-adjusted operating profit, with the option for
mining companies to elect for a lower rate of 4% by entering into a tax
stability regime for a period of 12 years, after which the rate of 5% will
apply. For 2006 and 2007, 50% of the new mining tax can be offset against first
category tax and the remaining 50% is tax deductible (i.e. an allowable expense
in determining liability to first category tax). From 2008, when the ability to
offset will no longer be available, 100% of the new mining tax will be tax
deductible. Los Pelambres, El Tesoro and Michilla opted to enter into this new
tax stability agreement during 2005, and hence the effect of the legislation is
to increase the effective tax rate of these three operations (before taking into
account deductibility against corporation tax) by approximately 2% in 2006 and
2007 and 4% thereafter.


The effective tax rate for 2006 was 23.3%, compared with the Chilean statutory
tax rate of 17.0%. This was principally due to the provision of withholding tax
of US$134.1 million, and the effect of the new mining tax, which resulted in a
charge of US$56.6 million. In 2005, the effective tax rate was 20.1%,
principally due to the provision of withholding tax of US$59.9 million, partly
offset by exchange gains of US$20.2 million on Chilean peso-denominated tax
receivable balances during the year.


7.      Basic earnings per share

Basic earnings per share is calculated on profit after tax and minority interest
giving net earnings of US$1,354.3 million (2005 - US$725.8 million) and based on
985,856,695 ordinary shares, being the number of ordinary shares following the
4-for-1 bonus issue on 19 June 2006 (see Note 19). Comparative amounts for basic
earnings per share have been restated for the effects of the bonus issue.


There were no other changes in ordinary shares in issue, nor was there any
potential dilution of ordinary shares in any period.


8.      Dividends

The Board will recommend a final dividend of 43.0 cents per ordinary share,
which comprises an ordinary dividend of 5.0 cents per share and a special
dividend of 38.0 cents per share. The interim dividend of 5.2 cents per share,
which comprised an ordinary dividend of 3.2 cents per share and a special
dividend of 2.0 cents per share, was paid on 12 October 2006. Together, this
gives total dividends proposed in relation to 2006 of 48.2 cents per share.


The final dividend proposed in relation to 2005 was 18.8 cents, which comprised
an ordinary dividend of 4.8 cents per share and a special dividend of 14 cents
per share. Together with the interim dividend that year of 3.2 cents per share,
this gave total dividends proposed in relation to 2005 of 22 cents per share.


Dividends per share actually paid in the year and recognised as a deduction from
net equity under IFRS were 24 cents (2005 - 16 cents) being the interim dividend
for the year and the final dividend proposed in respect of the previous year.


Comparative amounts for dividends per share have been restated for the effects
of the 4-for-1 bonus issue on 19 June 2006 (see Note 19).


The final dividend will be paid on 14 June 2007 to shareholders on the register
at the close of business on 11 May 2007. Dividends are declared and paid gross.
The conversion rate for the final dividend of 43.0 cents to be paid in sterling
will be set on 15 May 2007.


Dividends are declared in US dollars but may be paid in either dollars or
sterling. Shareholders on the register of members with an address in the United
Kingdom receive dividend payments in sterling, unless they elect to be paid in
dollars. All other shareholders are paid by cheque in dollars, unless they have
previously instructed the Company's registrar to pay dividends by bank transfer
to a sterling bank account, or they elect for payment by cheque in sterling. The
Company's registrar must receive any such election before the record date of 11
May 2007.


9.      Intangible assets

                                                      Year     Year
                          Concession Exploration     ended    ended
                               right    licences  31.12.06 31.12.05
                               US$'m       US$'m     US$'m    US$'m

Balance at the
beginning of the period         97.7           -      97.7     93.2
Acquisition (see Note 22)          -       230.0     230.0        -
Disposal (see Note 23)             -     (115.0)   (115.0)        -
Amortisation                   (4.0)           -     (4.0)    (3.4)
Foreign currency
exchange difference            (3.4)           -     (3.4)      7.9
                            --------    --------  --------  -------
Balance at the end of
the period                      90.3       115.0     205.3     97.7
                            ========    ========  ========  =======

The concession right relates to the 30-year concession to operate the water
rights and facilities in the Antofagasta Region of Chile which the Group's
wholly-owned subsidiary, Aguas de Antofagasta S.A., acquired in December 2003.
The intangible asset is being amortised on a straight-line basis over the life
of the concession.

The exploration licences relate to the value attributed to the rights acquired
on the purchase of Tethyan Copper Company Limited (see Note 22).

10.  Property, plant and equipment

                                Mining   Railway      Water      Year      Year
                                       and other concession     ended     ended
                                       transport             31.12.06  31.12.05
                                 US$'m     US$'m      US$'m     US$'m     US$'m

Balance at the beginning 
of the year                    1,638.3     110.4       71.3   1,820.0   1,796.1
Additions                        508.0      25.2        5.8     539.0     186.3
Acquisition (see Note 22)        171.6         -          -     171.6         -
Transfers and reclassifications      -         -          -         -     (0.8)
Depreciation                   (126.9)     (8.4)      (5.7)   (141.0)   (124.6)
Asset disposals                  (6.1)     (1.9)      (0.2)     (8.2)         -
Disposals (see Note 23)          (4.7)         -          -     (4.7)    (13.8)
Impairment charge                    -         -          -         -    (30.0)
Foreign currency exchange
difference                           -     (0.4)      (2.6)     (3.0)       6.8
                              --------  --------   --------  --------  --------
Balance at the end of the year 2,180.2     124.9       68.6   2,373.7   1,820.0
                              ========  ========   ========  ========  ========


11.  Investment property
                                           Year      Year
                                          ended     ended
                                       31.12.06  31.12.05
                                          US$'m     US$'m

Balance at the beginning of the year        3.4       3.2
Foreign currency exchange difference      (0.2)       0.2
                                       --------  --------
Balance at the end of the year              3.2       3.4
                                       ========  ========

Investment property represents the Group's forestry properties, which are held
for long-term potential and accordingly classified as investment property held
at cost.



12.  Investment in associate

                                           Year      Year
                                          ended     ended
                                       31.12.06  31.12.05
                                          US$'m     US$'m

Balance at the beginning of the year        2.8       2.9
Share of profit before tax                  1.3       1.1
Share of tax                              (0.2)     (0.2)
Dividends received                        (0.4)     (1.0)
                                       --------  --------
Balance at the end of the year              3.5       2.8
                                        ========  ========

The investment in associate refers to the Group's 30% interest in Antofagasta
Terminal Internacional S.A. ('ATI'), which operates a concession to manage
installations in the port of Antofagasta.


13.  Available for sale investments


                                          Year      Year
                                         ended     ended
                                      31.12.06  31.12.05
                                         US$'m     US$'m

Balance at the beginning of the year       0.1       0.1
Acquisition (see Note 22)                  5.6         -
Movements in fair value                    0.5         -
                                      --------  --------
Balance at the end of the year             6.2       0.1
                                      ========  ========


Available for sale investments represent those investments which are not
subsidiaries, associates or joint ventures and are not held for trading
purposes.


14.  Inventories
                                     Year     Year
                                    ended    ended
                                 31.12.06 31.12.05
                                    US$'m    US$'m

Raw materials and consumables        36.6     32.8
Work in progress                     68.6     45.1
Finished goods                       15.1     20.9
                                  -------  -------
                                    120.3     98.8
                                  =======  =======

Work in progress includes US$25.3 million related to high carbonate ore
inventories at El Tesoro which are expected to be processed more than twelve
months after the balance sheet date.

15.  Borrowings
                                At        At
                          31.12.06  31.12.05
                             US$'m     US$'m

Los Pelambres
Corporate loans            (305.3)   (381.5)
Other loans                  (9.5)    (14.3)
El Tesoro
Corporate loans             (27.9)    (55.8)
Finance leases               (0.2)     (0.3)
Michilla
Finance leases               (0.9)     (2.6)
Railway and other
transport services
Loans                       (10.8)     (7.2)
Other
Preference shares            (4.1)     (3.6)
                          --------  --------
Total (see Note 21)        (358.7)   (465.3)
                          ========  ========


Loans at 31 December 2006 are shown net of deferred financing costs of US$1.5
million (2005 - US$2.0 million). The amount in relation to Los Pelambres was
US$1.4 million (2005 - US$1.7 million). The amount in relation to El Tesoro was
US$0.1 million (2005 - US$0.3 million).

Maturity of borrowings
                                At        At
                          31.12.06  31.12.05
                             US$'m     US$'m
Short-term borrowings       (97.6)    (97.2)
Medium and long-term       (261.1)   (368.1)
borrowings                --------  --------
Total (see Note 21)        (358.7)   (465.3)
                          ========  ========


Loans are predominantly floating rate. However the Group periodically enters
into interest rate derivative contracts to manage its exposure to interest
rates. Details of any derivative instruments held by the Group are given in Note
4 (b).


16.  Post-employment benefit obligation

                                           Year      Year
                                          ended     ended
                                       31.12.06  31.12.05
                                          US$'m     US$'m

Balance at the beginning of the year     (20.6)    (16.2)
Charge to operating profit in the year    (7.7)     (3.9)
Release of discount to net                           
interest in year                          (0.8)     (1.0)
Utilised in period                          4.2       1.8
Foreign currency exchange difference        0.8     (1.3)
                                       --------  --------
Balance at the end of the year           (24.1)    (20.6)
                                       ========  ========


The post employment benefit obligation relates to the provision for severance
indemnities which are payable when an employment contract comes to an end, in
accordance with normal employment practice in Chile and other countries in which
the Group operates. The severance indemnity obligation is treated as an unfunded
defined benefit plan, and the calculation is based on valuations performed by an
independent actuary.



17.  Long-term provisions
                                 Year      Year
                                ended     ended
                             31.12.06  31.12.05
                                US$'m     US$'m

Balance at the beginning of
the year                        (9.8)    (13.2)
(Charge)/credit to
operating profit in the year    (0.6)       3.4
Release of discount to net
interest in the year            (0.4)     (0.6)
Amount capitalised                  -       0.8
Acquisition (see Note 22)       (0.8)         -
Disposals (see Note 23)           0.8         -
Utilised in period                0.8         -
Foreign currency exchange
difference                        0.2     (0.2)
                             --------  --------
Balance at the end of the       
year                            (9.8)     (9.8)
                             ========  ========

Analysed as follows:
Decommissioning and             
restoration                     (9.4)     (9.5)
Termination of water 
concession                      (0.4)     (0.3)
                             --------  --------
Balance at the end of the       
year                            (9.8)     (9.8)
                             ========  ========

Decommissioning and restoration costs relate to the Group's mining operations.
Costs are estimated on the basis of a formal closure plan and are subject to
regular formal review.

The provision for the termination of the water concession relates to the
provision for items of plant, property and equipment and working capital items
under Aguas de Antofagasta's ownership to be transferred to the previous
state-owned operator ESSAN at the end of the concession period, and is based on
the net present value of the estimated value of those assets and liabilities in
existence at the end of the concession.


18.  Deferred tax assets and liabilities
                                      Year      Year
                                     ended     ended
                                  31.12.06  31.12.05
                                     US$'m     US$'m

Net position at the
beginning of the year              (218.9)   (194.5)
Charge to tax on profit in year     (72.7)    (23.1)
Acquisition (see Note 22)           (29.0)         -
Foreign currency
exchange difference                    0.5     (1.3)
                                  --------  --------
Net position at the end
of the year                        (320.1)   (218.9)
                                  ========  ========

Analysed between:
Deferred tax assets                    3.1       6.6
Deferred tax liabilities           (323.2)   (225.5)
                                  --------  --------
Net position                       (320.1)   (218.9)
                                  ========  ========


19.  Share capital and share premium

At the Company's Annual General Meeting and the separate class meetings of the
ordinary and preference shareholders of the Company held on 14 June 2006,
resolutions were passed to:

   • increase the authorised share capital from £12,727,000 to £67,000,000 by
    the creation of 1,085,460,000 ordinary shares of 5p each;
   • issue, by way of bonus issue, four new ordinary shares of 5p each
    (credited as fully paid) for every one ordinary share held by the
    shareholders of the Company at the close of business on 19 June 2006, by
    applying £39.4 million from the Company's share premium account in paying up
    and allotting the new ordinary shares;
   • increase the voting rights of each preference share from 20 votes to 100
    votes, to prevent dilution of the voting rights of each preference share as
    a proportion of the total votes to be exercised at a general meeting.

The ordinary shares were issued at the opening of business on 19 June 2006, and
the effect of the bonus issue of ordinary shares is disclosed in the
Consolidated Statement of Changes in Equity. The increase in ordinary share
capital of US$73.2 million and corresponding reduction in the share premium
account has been recorded at the closing exchange rate on 16 June 2006.


20.  Reconciliation of profit before tax to net cash inflow from operating
activities
                                                           Year      Year
                                                          ended     ended
                                                       31.12.06  31.12.05
                                                          US$'m     US$'m

Profit before tax                                       2,859.0   1,536.3
Depreciation and amortisation                             145.0     128.0
Loss on disposal of property,
plant and equipment (including
impairment charge in 2005)                                  8.2      39.7
Net finance income                                       (53.8)    (29.0)
Share of profit of associate                              (1.1)     (0.9)
Increase in inventories                                  (21.5)    (28.9)
Increase in debtors                                     (135.5)    (36.3)
Increase in creditors and
provisions                                                  9.8      38.6
                                                       --------  --------
Cash flows from operations                              2,810.1   1,647.5
                                                       ========  ========



21.  Analysis of changes in net cash

                         At 1.1.06      Cash     Other  Exchange        At
                                       flows                      31.12.06
                             US$'m     US$'m     US$'m     US$'m     US$'m

Cash and cash equivalents  1,316.8     489.2         -     (0.5)   1,805.5
                          --------  --------  --------  --------  --------
Bank borrowings due
within one year             (95.8)      95.4    (96.2)     (0.1)    (96.7)
Bank borrowings due
after one year             (363.0)      10.4      95.8         -   (256.8)
Finance leases due
within one year              (1.4)       1.7     (1.2)         -     (0.9)
Finance leases due
after one year               (1.5)       0.1       1.2         -     (0.2)
Preference shares            (3.6)         -         -     (0.5)     (4.1)
                          --------  --------  --------  --------  --------
Total borrowings           (465.3)     107.6     (0.4)     (0.6)   (358.7)
                          --------  --------  --------  --------  --------

Net cash                     851.5     596.8     (0.4)     (1.1)   1,446.8
                          ========  ========  ========  ========  ========


Net cash


Net cash at the end of each year was as follows:

                                             At        At
                                       31.12.06  31.12.05
                                          US$'m     US$'m
Cash and cash equivalents               1,805.5   1,316.8
Total borrowings                        (358.7)   (465.3)
                                       --------  --------
                                        1,446.8     851.5
                                       ========  ========


22.  Acquisition of subsidiaries

Subsidiaries acquired     Principal     Date of Proportion     Cost of
                           activity acquisition  of shares acquisition
                                                  acquired    
-----------------------    --------    --------   --------    --------
                                                         %       US$'m
Tethyan Copper Company       Mining
Limited                 exploration 20 Apr 2006        100       170.4
                       
Equatorial                   Mining
Mining Limited           investment 24 Aug 2006        100       406.1
                         


a) Tethyan Copper Limited


On 20 April 2006 the Group acquired 100% of the issued share capital of Tethyan
Copper Company Limited ('Tethyan') for cash consideration (including transaction
costs) of US$170.4 million, following a recommended cash offer first made on 14
February 2006.

                                            Book Accounting  Fair value     Fair
                                           value     policy adjustments    value
                                                  alignment
                                           US$'m      US$'m       US$'m    US$'m

Intangible assets - exploration licences       -       60.0       170.0    230.0
Property, plant and equipment                0.4          -           -      0.4
Exploration, evaluation and development     18.0     (18.0)           -        -
Trade and other receivables                  0.8          -           -      0.8
Cash and cash equivalents                    1.0          -           -      1.0
Trade and other payables                   (1.7)          -           -    (1.7)
Short-term provisions                          -     (60.0)           -   (60.0)
Long-term provisions                       (0.1)          -           -    (0.1)
                                        --------   --------    -------- --------
Net assets                                  18.4     (18.0)       170.0    170.4
                                        ========   ========    ======== ========

Net cash outflow arising on acquisition
Cash consideration (including directly
attributable costs)                                                        170.4
Cash payment for share of
cost of extinguishing claw-back right                                       30.0
Cash and cash equivalents acquired                                         (1.0)
                                                                        --------
                                                                           199.4
                                                                        ========



(i)                       The intangible assets represent the full unencumbered
value attributed to the interests in the exploration licences held by Tethyan.
These include a 75% interest in the Reko Diq prospect in the Chagai Hills region
of South-West Pakistan, which includes the Tanjeel Mineral resource and the
Western Porphyries, and a 100% interest in certain other licences in the region.


(ii)                      Exploration costs capitalised by Tethyan have been
written off on acquisition in the consolidated financial statements in
accordance with the Group's accounting policies.


(iii)                    Total consideration includes directly attributable
costs of US$6.1 million.


(iv)                    On 14 February 2006, the Group separately entered into
an agreement with BHP Billiton whereby BHP Billiton's rights to claw-back a
material interest in certain of Tethyan's mineral interests ('Claw-Back Right')
would be extinguished for a consideration of US$60 million. Trade and other
payables were adjusted on acquisition to reflect this amount which results from
the fair valuing of the encumbrance over the acquired exploration licences
relating to the Claw-Back Right. Following the disposal of 50% of Tethyan to
Barrick Gold Corporation ('Barrick Gold') (see Notes 22(a)(v) and 23(a) below),
the Group contributed US$30 million to Tethyan for its share of the cost of
extinguishing the Claw-Back Right on 23 November 2006. This amount has been
included in the net cash outflow on acquisition.


(v)                      On 22 September 2006 the Group entered into a joint
venture agreement with Barrick Gold Corporation ('Barrick Gold'), to establish a
50:50 joint venture in relation to Tethyan's mineral interests in Pakistan.
Further details of the part-disposal of Tethyan to Barrick Corporation to give
effect to the joint venture are set out in Note 23 below.


(vi)                    Tethyan is wholly engaged in mineral exploration
activities and did not generate any revenue in the period before or after
acquisition by the Group. The operating loss generated by Tethyan for the period
since acquisition was US$5.3 million, which relates mainly to exploration costs
expensed in accordance with the Group's accounting policy. This includes US$3.3
million during the period for which Tethyan was wholly-owned by the Group and
US$2.0 million under the proportionate consolidation method during the period
after which the joint venture with Barrick Gold was established. If the
acquisition of Tethyan had been completed on the first day of the financial
year, its operating loss for the year would have been nil.



b) Equatorial Mining Limited


On 24 August 2006 the Group acquired 100% of the issued share capital of
Equatorial Mining Limited ('Equatorial') for a cash consideration (including
transaction costs) of US$406.1 million, following a recommended cash offer first
made on 15 August 2006.
                                        Book Accounting  Fair value     Fair
                                       value     policy adjustments    value
                                              alignment
                                       US$'m      US$'m       US$'m    US$'m

Property, plant and equipment            0.2          -       171.0    171.2
Exploration, evaluation and development 10.1     (10.1)           -        -
Investment in associate
(Minera El Tesoro)                     137.5    (137.5)           -        -
Available for sale investments           5.6          -           -      5.6
Trade and other receivables              6.4          -           -      6.4
Cash and cash equivalents              118.0          -           -    118.0
Current trade and other payables       (1.4)          -           -    (1.4)
Non-current trade and other payables   (1.4)          -           -    (1.4)
Long-term provisions                   (0.8)          -           -    (0.8)
Deferred tax                               -          -      (29.0)   (29.0)
                                    --------   --------    -------- --------
Net assets                             274.2    (147.6)       138.9    268.6
                                    ========   ========    ========
Elimination of minority interest                                       137.5
                                                                    --------
Total consideration                                                    406.1
                                                                    ========

Net cash outflow arising on acquisition
Cash consideration (including directly attributable costs)             406.1
Cash and cash equivalents acquired                                   (118.0)
                                                                    --------
                                                                       288.1
                                                                    ========



(i)                   Equatorial's principal asset was a 39% interest in Minera
El Tesoro, in which the Group held the remaining 61% and which it had accounted
for as a subsidiary. The acquisition has resulted in the elimination of minority
interest of US$137.5 million recognised in the Group's balance sheet immediately
prior to acquisition.


(ii)                 Exploration costs capitalised by Equatorial have been
written off on acquisition in the consolidated financial statements in
accordance with the Group's accounting policies.


(iii)                Total consideration includes directly attributable costs of
US$3.1million


(iv)                In July 2006, Equatorial received notice of a claim by
Errigal Limited in the New South Wales Supreme Court.  Errigal is a former
minority shareholder in one of Equatorial's subsidiaries whose interest was
acquired in 1993, and the claim is for amounts payable under the
1993 acquisition agreement.  Equatorial does not agree with the interpretation
of the 1993 agreement advanced by Errigal and the action will be defended
vigorously. The effect of the claim is unlikely to be material to the Group.



(v)                 The acquisition has also resulted in a fair value adjustment
to mining properties (including those mining properties held by Minera El Tesoro
) of US$171.0 million, and a corresponding deferred tax provision of US$29.0
million.


(vi)                The Group entered into an agreement to sell Equatorial
Mining North America Inc. (EMNA), a wholly-owned subsidiary of Equatorial.
Further details of the disposal are given in Note 23(b).


(vii)              Equatorial did not generate revenue in the period before or
after acquisition by the Group, and its acquisition did not have any effect on
the Group as its interest in El Tesoro was already consolidated as a subsidiary
in the Group's financial statements. The operating profit generated by
Equatorial (excluding its interest in El Tesoro which was already consolidated
by the Group as a subsidiary) for the period since acquisition was US$4.4
million. If the acquisition of Equatorial had been completed on the first day of
the financial year, its operating profit (similarly excluding its interest in El
Tesoro) for the year would have been US$4.4 million.



23.  Disposal and part-disposal of subsidiaries


a) Atacama Copper Pty Limited and joint venture with Barrick Gold Corporation


On 22 September 2006, the Group entered into a 50:50 joint venture agreement
with Barrick Gold Corporation ('Barrick Gold') in relation to Tethyan's mineral
interests in Pakistan. The Group disposed of 50% of the issued share capital of
Atacama Copper Pty Limited ('Atacama'), the immediate parent company of Tethyan,
to Barrick Gold for US$86.8 million.

Book value of net assets                US$'m
sold

Intangible assets - exploration         115.0
licences
Property, plant and                       0.6
equipment
Trade and other                           0.4
receivables
Cash and cash equivalents                 1.1
Trade and other payables                (0.6)
Short-term provisions                  (30.8)
Long-term provisions                    (0.1)
                                     --------
Net assets                               85.6
                                     ========

Profit on disposal
Consideration received                   86.8
Net assets on disposal of              (85.6)
50% interest                         
                                     --------
                                          1.2
                                     ========

Net cash inflow arising on disposal
Consideration received in cash and       86.8
cash equivalents
Less: cash and cash                     (1.1)
equivalents disposed                 --------
                                         85.7
                                     ========


(i)                   The book value of net assets sold represents 50% of the
consolidated carrying value of Atacama and its subsidiaries including Tethyan at
the date of disposal. Following the disposal, the Group has treated its
remaining 50% interest in Atacama as a jointly controlled entity under the
proportionate consolidation method.


(ii)                 The profit on disposal principally represents the recovery
of 50% of the exploration costs incurred and expensed by Tethyan between 20
April, the date of its acquisition by the Group, and 22 September, the date of
the part-disposal to Barrick Gold. This amount has been recorded in other
operating income.



b) Equatorial Mining North America Inc.


On 11 December 2006, the Group entered into an agreement to dispose of
Equatorial Mining North America Inc. (EMNA), a wholly-owned subsidiary of
Equatorial Mining Limited, to Idaho General Mines Inc ('IGM'). EMNA and its
subsidiaries formerly owned and operated the Tonopah copper mine in Nevada, over
which they retained royalties. The consideration of US$4.9 million was received
in January 2007.

Book value of net assets                US$'m
sold

Property, plant and                       4.3
equipment
Cash and cash equivalents                 1.4
Long-term provisions                    (0.8)
                                     --------
Net assets                                4.9
                                     ========

Profit on disposal
Consideration receivable (received        4.9
in January 2007)
Net assets on disposal                  (4.9)
                                     --------
                                            -
                                     ========

Net cash outflow arising on disposal
Consideration received in cash and          -
cash equivalents
Less: cash and cash                     (1.4)
equivalents disposed                 
                                     --------
                                        (1.4)
                                     ========


(i) The book value of net assets sold equates to the fair values assigned at the
time of the acquisition of Equatorial Mining Limited.

(ii) The consideration was received in January 2007 and will be accounted for in
the cash flow statement for that year.

(iii) No amount has been recognised in respect of the further contingent
consideration of US$6 million which is payable should production at the Tonopah
mine commence.


24.  Other transactions

a) Agreement with Ascendant Copper Corporation


On 14 November 2006 the Group signed a Letter of Agreement ('Agreement') with
Ascendant Copper Corporation ('Ascendant'), a mining company listed on the
Toronto Stock Exchange, to acquire an interest in Ascendant's Chaucha Project.
The Chaucha Project is a copper-molybdenum prospect located in the Western
Cordillera of the Andes in southern Ecuador, approximately 70 kilometres west of
the town of Cuenca. The mineral concession covers an area of 2,544 hectares with
applications by Ascendant in progress for further mineral concessions from the
appropriate government entities.


Under the terms of the Agreement, the Group has the right to earn up to an
undivided 60% interest in the Chaucha Project. The interest will be acquired by
earning an equity interest in Compania Minera DosRios S.A. ('DosRios'), a
wholly-owned subsidiary of Ascendant which holds (or will hold) all of the
mineral concessions associated with the Chaucha Project. The Group has committed
to fund at least US$1 million of expenditure (after which it has the right to
terminate the Agreement at any time) and will subsequently earn its equity
interest in successive stages by spending a total of US$40 million over a
six-year period in four distinct phases of qualifying expenditures. These
expenditures will cover exploration and advancement costs including, in the
later phases, preparation of a feasibility study and a final payment on
completion to Ascendant.


No expenditure was incurred on this project during 2006.



b) Agreement with AngloGold Ashanti Limited


On 14 July 2006 the Group reached agreement with AngloGold Ashanti Limited to
form a joint venture to explore and develop copper and gold mining projects in
southern Colombia. Under the agreement, AngloGold will contribute its mineral
interests in the area covered by the joint venture agreement, and the Group has
committed to funding US$1.3 million in exploration over a one year period. The
Group may elect to fund an additional US$6.7 million in exploration within four
years, in order to earn a 50% interest in the joint venture.


During 2006 the Group spent US$0.9 million on this project which has been
included in exploration costs.


25.  Post balance sheet event

On 2 March 2007, the Group agreed to sell its 50% interest in Cordillera de Las
Minas S.A. ('CMSA') to Panoro Minerals Limited ('Panoro'), a company listed on
the TSX Venture Exchange. CMSA was the joint venture entity with Companhia Vale
Rio Doce through which its interests in southern Peru were held. The Group's
share of the consideration comprises US$6.0 million plus six million common
shares in Panoro. The agreement is subject to a number of conditions including
financing by Panoro and regulatory approvals. Subject to these conditions being
met, closing is expected to occur by June 2007.


26.  Currency translation

Assets and liabilities denominated in foreign currencies are translated into
dollars and sterling at the period end rates of exchange. Results denominated in
foreign currencies have been translated into dollars at the average rate for
each period.

                Period end rates                           Average rates

31.12.06     US$1.9569 = £1; US$1 = Ch$532         US$1.8386 = £1; US$1 = Ch$530

31.12.05     US$1.7179 = £1; US$1 = Ch$513         US$1.8185 = £1; US$1 = Ch$560

27.  Distribution

The Annual Report and Financial Statements for the year ended 31 December 2006,
together with the Notice of the 2007 Annual General Meeting, will be posted to
all shareholders in April 2007. The Annual General Meeting will be held at
Canning House, 2 Belgrave Square, London SW1 at 10.30 a.m. on Wednesday, 13 June
2007.


28.  Production and Sales Statistics (not subject to audit or review)

(See notes following Note 28(b).)

a)  Production and sales volumes for copper and molybdenum

                                        Production             Sales
                                       ------------           -------
                                         Year      Year      Year      Year
                                        ended     ended     ended     ended
                                     31.12.06  31.12.05  31.12.06  31.12.05
                                          000       000       000       000
                                       tonnes    tonnes    tonnes    tonnes

Copper
Los Pelambres                           324.2     322.8     324.8     319.1
El Tesoro                                94.0      98.1      95.3      96.1
Michilla                                 47.3      46.4      47.7      45.3
                                     --------  --------  --------  --------
Group total                             465.5     467.3     467.8     460.5
                                     ========  ========  ========  ========

Molybdenum
Los Pelambres                             9.8       8.7       9.9       8.5
                                     ========  ========  ========  ========


b) Cash costs per pound of copper produced and realised prices per pound of 
copper and molybdenum sold

                                          Cash cost          Realised prices
                                         -----------        -----------------
                                    Year ended Year ended Year ended Year ended
                                      31.12.06   31.12.05   31.12.06   31.12.05
                                      US cents   US cents   US cents   US cents

Copper
Los Pelambres                             16.4     (17.1)      335.0      189.2
El Tesoro                                 78.6       66.1      316.4      175.7
Michilla                                 126.4      118.8      318.5      177.1
                                      --------   --------   --------  ---------
Group weighted
average (net of by-products)              40.2       13.9      329.5      185.2
                                      ========   ========   ========  =========

Group weighted
average (before deducting by-products)    95.6       77.3
                                      ========   ========

Cash costs at Los Pelambres
On-site shipping cost                     56.4       47.1
Tolling charges for concentrates          39.7       27.6
                                      --------   --------
Cash costs before deducting
by-product credits                        96.1       74.7
By-product credits
(principally molybdenum)                 (79.7)     (91.8)
                                      --------   --------
Cash costs (net of
by-product credits)                       16.4     (17.1)
                                      ========   ========

LME average                                                    305.3      167.1
                                                            ========  =========

                                                                 US$        US$
Molybdenum
Los Pelambres                                                   24.6       31.4
                                                            ========  =========

Market average price                                            24.8       32.0
                                                            ========  =========


Notes to the production and sales statistics


(i)                  The production and sales figures represent the actual
amounts produced and sold, not the Group's share of each mine. The Group owns
60% of Los Pelambres, 100% of El Tesoro (61% prior to 24 August 2006) and 74.2%
of Michilla.


(ii)                 Los Pelambres produces copper and molybdenum concentrates,
and the figures for Los Pelambres are expressed in terms of payable metal
contained in concentrate. Los Pelambres is also credited for the gold and silver
contained in the copper concentrate sold. El Tesoro and Michilla produce
cathodes with no by-products.


(iii)               Cash costs are a measure of the cost of operational
production expressed in terms of cents per pound of payable copper produced.
Cash costs are stated net of by-product credits and include tolling charges for
concentrates at Los Pelambres. Cash costs exclude depreciation, financial income
and expenses, hedging gains and losses, exchange gains and losses and
corporation tax for all three operations. By-product calculations do not take
into account mark-to-market gains for molybdenum at the beginning or end of each
period.


(iv)               Excluding by-product credits (which are reported as part of
turnover) and tolling charges for concentrates (which are deducted from
turnover), weighted average cash costs for the Group (comprising on-site and
shipping costs in the case of Los Pelambres and cash costs in the case of the
other two operations) increased from 58.3 cents per pound in 2005 to 68.0 cents
per pound in 2006.


(v)                 Realised copper prices are determined by comparing turnover
from copper sales (grossing up for tolling charges for concentrates) with sales
volumes for each mine in the period. Realised molybdenum prices at Los Pelambres
are calculated on a similar basis. Realised prices do not take into account
gains and losses (including those arising from fair value adjustments) on
commodity derivatives which are included in other operating income or expense as
the Group did not adopt the hedge accounting provisions of IAS 39 'Financial
Instruments: Recognition and Measurement' during 2005 or 2006.


(vi)               The totals in the tables above may include some small
apparent differences as the specific individual figures have not been rounded.


(vii)              The production information in Note 28(a) and the cash cost
information in Note 28(b) is derived from the Group's production report for the
fourth quarter of 2006, published on 31 January 2007.



29.  Summary of mining companies' Chilean GAAP financial statements (not subject
to audit or review)

The Group's three mining companies, Los Pelambres, El Tesoro and Michilla, will
file financial statements under Chilean GAAP for the year ended 31 December 2006
with the Chilean securities regulator, the Superintendencia de Valores y Seguros
de Chile ('SVS') on 30 March 2007. These filings are in accordance with mining
tax legislation introduced in Chile last year which requires companies that have
elected to enter a new tax stability regime to publish from the 2006 financial
year on a quarterly basis.


The balance sheets, income statements and cash flow statements prepared under
Chilean GAAP and to be filed with the SVS are summarised below.

(a) Balance sheets
                                            Los    El Tesoro     Michilla
                                      Pelambres
                                             At           At           At
                                     31.12.2006   31.12.2006   31.12.2006
                                          US$'m        US$'m        US$'m

Cash and cash equivalents                 485.3        219.0         69.5
Trade and other receivables               365.1         53.0         17.0
Inventories                                46.6         53.8         18.1
Current and deferred tax assets            29.9          2.5          2.6
                                     ----------   ----------   ----------
Current assets                            926.9        328.3        107.2

Fixed assets                            1,504.8        258.1         54.6

Other non-current assets                  152.2         51.4          0.7
                                     ----------   ----------   ----------

TOTAL ASSETS                            2,583.9        637.8        162.5
                                     ==========   ==========   ==========

Short term borrowings                    (82.5)       (14.2)            -
Trade and other payables                (154.6)       (43.4)       (20.5)
Current and deferred tax
liabilities                             (110.7)       (36.0)       (15.5)
                                     ----------   ----------   ----------

Current liabilities                     (347.8)       (93.6)       (36.0)
                                     ----------   ----------   ----------

Medium and long term
borrowings                              (234.8)       (14.0)            -
Trade and other payables                 (12.2)        (6.5)        (7.5)
Deferred tax liabilities                (138.8)       (31.6)            -
                                     ----------   ----------   ----------

Non-current liabilities                 (385.8)       (52.1)        (7.5)
                                     ----------   ----------   ----------

Total liabilities                       (733.6)      (145.7)       (43.5)
                                     ----------   ----------   ----------

Share capital                           (373.8)       (91.0)       (78.4)
Reserves                              (1,476.5)      (401.1)       (40.6)
                                     ----------   ----------   ----------

Total shareholders' equity            (1,850.3)      (492.1)      (119.0)
                                     ----------   ----------   ----------

TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY                  (2,583.9)      (637.8)      (162.5)
                                     ==========   ==========   ==========



(b) Income statements
                                            Los    El Tesoro     Michilla
                                      Pelambres
                                     Year ended   Year ended   Year ended
                                       31.12.06     31.12.06     31.12.06
                                          US$'m        US$'m        US$'m
                               
Turnover                                2,726.9        603.2        260.5

Operating costs                         (403.7)      (178.6)      (142.3)
                                     ----------   ----------   ----------

Operating margin                        2,323.2        424.6        118.2

Administrative and distribution 
expenses                                 (77.1)       (27.2)       (13.2)
                                     ----------   ----------   ----------

Operating profit                        2,246.1        397.4        105.0
                                     ----------   ----------   ----------

Other income                                0.8          0.3          0.8
Financial income                           36.1          4.8          1.9
Financial expenses                       (21.9)        (3.0)        (0.3)
Other expenses                            (2.0)        (2.1)        (0.6)
Exchange difference                         4.7          1.5          0.7
                                     ----------   ----------   ----------
Net non-operating income                   17.7          1.5          2.5
                                     ----------   ----------   ----------
Profit before tax                       2,263.8        398.9        107.5
Income tax expense                      (419.1)       (75.2)       (21.5)
                                     ----------   ----------   ----------
Profit for the financial period         1,844.7        323.7         86.0
                                     ==========   ==========   ==========

(c) Cash flow statements
                                            Los    El Tesoro     Michilla
                                      Pelambres
                                     Year ended   Year ended   Year ended
                                       31.12.06     31.12.06     31.12.06
                                          US$'m        US$'m        US$'m

Net cash flow from operating 
activities                              1,896.8        352.2        112.0
                                     ----------   ----------   ----------

Investing activities
Additions to fixed assets               (442.2)       (13.7)        (7.8)
Disposals of fixed assets                   1.4            -          0.1
                                     ----------   ----------   ----------
Net cash used
in investing activities                 (440.8)       (13.7)        (7.7)
                                     ----------   ----------   ----------

Financing activities
Dividends paid                        (1,450.0)       (95.0)       (50.0)
Loans repaid                             (81.4)       (28.0)            -
                                     ----------   ----------   ----------

Net cash used in financing
activities                            (1,531.4)      (123.0)       (50.0)
                                     ----------   ----------   ----------

Net (decrease)/increase in cash
and cash equivalents                     (75.4)        215.5         54.3

Cash and cash equivalents at
the beginning of the period               560.7          3.5         15.2
                                     ----------   ----------   ----------

Cash and cash equivalents at
the end of the period                     485.3        219.0         69.5
                                     ==========   ==========   ==========


Notes to Chilean GAAP financial statements

(i)                   The above balance sheets, income statements and cash flow
statements have been derived from the financial statements of Los Pelambres, El
Tesoro and Michilla for the year ended 31 December 2006 to be filed with the SVS
in Chile on 30 March 2007. Certain detailed lines in the individual statements
have been combined.


(ii)                 The balance sheets, income statements and cash flow
statements above have been prepared under Chilean GAAP and therefore do not
necessarily equate to the amounts that would be included in the Group's
consolidated financial statements for a corresponding period either as to
measurement or classification.


(iii)                The amounts disclosed above represent the full amount for
each company and not the Group's attributable share. The Group owns 60% of Los
Pelambres, 100% of El Tesoro (61% prior to 24 August 2006) and 74.2% of
Michilla.


(iv)                A translation into English of the full quarterly financial
statements for each company shown in summary form above will be available on the
Group's website www.antofagasta.co.uk.


30.  Reconciliation of Chilean GAAP results to Turnover and EBITDA under IFRS
for individual business segments

(a) Turnover
                                            Los    El Tesoro     Michilla
                                      Pelambres
                                     Year ended   Year ended   Year ended
                                       31.12.06     31.12.06     31.12.06
                             Notes        US$'m        US$'m        US$'m


Chilean GAAP - Turnover                 2,726.9        603.2        260.5

Mark-to-market of
provisionally priced sales    (i)        (25.6)        (0.2)            -
Reclassification of realised
losses on commodity
derivatives to other 
operating expense            (ii)             -         61.8         74.4
                                     ----------   ----------   ----------
IFRS - Turnover                         2,701.3        664.8        334.9
                                     ==========   ==========   ==========



(b) EBITDA
                                            Los    El Tesoro     Michilla
                                      Pelambres
                                     Year ended   Year ended   Year ended
                                       31.12.06     31.12.06     31.12.06
                             Notes        US$'m        US$'m        US$'m

Chilean GAAP - 
Operating profit                        2,246.1        397.4        105.0

Depreciation & amortisation                72.2         35.3         15.2
                                     ----------   ----------   ----------

Chilean GAAP - EBITDA                   2,318.3        432.7        120.2

Mark-to-market
of provisionally
priced sales                  (i)        (25.6)        (0.2)            -

Mark-to-market
of financial derivatives     (ii)           0.3         17.0         34.8

Other IFRS and
consolidation adjustments    (iii)          4.0          6.5          3.4
                                     ----------   ----------   ----------
IFRS - EBITDA                           2,297.0        456.0        158.4
                                     ==========   ==========   ==========

Notes to reconciliation of turnover and EBITDA

(i) Copper and molybdenum concentrate sale agreements and copper cathode sale
agreements generally provide for provisional pricing of sales at the time of
shipment, with final pricing being based on the monthly average London Metal
Exchange copper price or monthly average market molybdenum price for specified
future periods. This normally ranges from 30 to 180 days after delivery to the
customer.


Under Chilean GAAP, the Group's accounting treatment is to value sales, which
remain open as to final pricing at the period end, in aggregate at the lower of
provisional invoice prices and mark-to-market prices at the balance sheet date.
The Group determines mark-to-market prices using forward prices at each period
end for copper concentrate and cathode sales, and period-end month average
prices for molybdenum concentrate sales due to the absence of a futures market
for that commodity.


Under IFRS, both gains and losses from the marking-to-market of open sales are
recognised through adjustments to turnover in the income statement and to trade
debtors in the balance sheet. Under IFRS, the Group determines mark-to-market
prices in the same way as under Chilean GAAP.


(ii) The Group uses derivative financial instruments to reduce exposure to
commodity price movements. The Group does not use such derivative instruments
for trading purposes.

Under Chilean GAAP, such derivatives are held off the balance sheet. Gains or
losses on derivative instruments are matched in the income statement against the
item intended to be hedged. Such gains or losses are reflected by way of
adjustment to turnover.

The Group did not adopt the hedge accounting provisions of IAS 39 'Financial
Instruments: Recognition and Measurement' in the year ended 31 December 2006.
Accordingly, under IFRS, derivatives have initially measured at cost including
transaction costs (which may be nil), and measured at subsequent reporting dates
at fair value. Gains and losses arising from changes in fair value, or from
derivatives which mature or are liquidated in the period, are included in the
income statement for the period as part of other operating income or expense.
Any amounts included in turnover under Chilean GAAP are reclassified
accordingly.


(iii) Other IFRS and consolidation adjustments are not material either
individually or in aggregate.



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