Operational Excellence Axis

We seek continuous improvement in competitiveness, designed to maximize the value of existing operations through operational stability, increased capacity utilization and constant improvements in costs, productivity and rationalization of capital employed. We invest in technology, innovation and automation to boost our productivity and competitiveness, broaden our safety culture and support key sustainability goals, such as higher water recycling rates and reduced CO2 emissions and waste generation. SDG 9.4

We were early in meeting our operational excellence goals for the 2025 to 2023 period, aiming to strengthen cash generation to support our growth objective, which is mainly leveraged by The Nexa Way program. In addition to the work being carried out on the culture front, the program also is designed to create value by encouraging the generation of ideas, performance enhancements and capital allocation.

To ensure the implementation of the ideas generated, the governance structure of The Nexa Way program also is responsible for accelerating and ensuring the implementation of these initiatives. (More information about The Nexa Way is on page People).

Mining

One of the main examples of operational excellence was the optimization of underground work shifts in Vazante, making it possible to produce 1.4 million tonnes extracted from the mine and the development of 16.7 kilometers. This represented increases of 2.4% and 11.2%, respectively, over 2018. The concentration plant reported improvements of 2.3% in smelting recovery that, together with the implementation of the new ore sorter circuit, made it possible to maintain zinc production levels even though the main milling circuit was shut down for maintenance for 30 days.

Ore sorting is a technology that consists of dry separation by ore and sterile content, bolstering efficiency and reducing metal recovery costs. With the good results obtained in Vazante, we increased both production in the underground mine as well as the treatment of ore from tailings. In addition to recovering a greater amount of metal, Morro Agudo also expanded sales of Zincal (a zinc mining by-product), thus shoring up the zero-waste generation concept.

Furthermore, Vazante initiated the dry disposal of tailings, which reduces environmental risks and leads to higher safety levels in the units and the surrounding regions.

In Cerro Lindo, we concluded the Master Plan for disposal of waste and tailings, redefining the useful life of the deposit until 2027. We have also completed the installation of a new desalinated water pipeline to ensure the supply of the resource to the mine, and we have made progress in implementing digital personnel access controls.

At the Pasco Complex, we increased the extraction at the Atacocha mine by 17%, to 1.4 thousand tonnes/day, as a result of investments in mine development, review of processes to boost our productivity and optimization of mine sequencing through delivery of a higher-content ore feed. We also made progress in expanding Cava San Gerardo, obtaining a license to enlarge the mine. In El Porvenir, we achieved greater mining efficiencies through sublevel stopping technology, implemented in the previous year. We have achieved even lower costs by reducing the volume of concrete consumed to buttress the galleries, as well as by optimizing contracts with third parties.

Smelting

Our great challenge in smelting is to obtain constant and incremental efficiency gains. This will be achieved through small adjustments in production, cost reductions and the gradual decrease in bottlenecks at the plants, such as improving the processing capacity of the ustulator furnace in all smelters.

We advanced 91% in the execution of the project to change the energy matrix of the smelter at Cajamarquilla, designed to replace all liquid fuels with natural gas, thereby significantly reducing greenhouse gas emissions and the unit’s operating costs. To improve wastewater management, over the course of 2019 we continued to make progress in the execution of a project to separate domestic from industrial sewage. Projects for new changing rooms and a cafeteria for greater employee comfort were concluded. We are in the process of review the construction and execution of the work plan for the Jarosita project (conversion of the production process from iron oxide to iron sulfate), which was temporarily suspended due to a delay in the delivery of equipment and materials from suppliers.

We were able to increase the zinc volatilization in the Waelz Furnace in Juiz de Fora, reducing slag losses after the installation of a water spray system to cool gases. This system was developed internally and through market research. With the tests and effective start-up in July, the average yield in the electric steelmaking powder (PAE) treatment process in 2019 was 93.2%, significantly higher than in previous years (2017 – 83.2% and 2018 – 87.1%).

In addition, we improved the level of the zinc recovery yield in Três Marias, from 93.7% in 2018 to 94.2% in 2019. Moreover, we sustained an operation with 30% fewer greenhouse gas emissions through the steam boilers installed in 2018 to replace fuel oil equipment.