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“By the end of 2003, thirty-one of PAMA proyects were already completed, including all commitments related to the Company’s operations in Cuajone and Toquepala.” 

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(1) The Company’s molybdenum production is sold as concentrates. Volume represents pounds of molybdenum contained in concentrates. 

Cathodes washing at the SWEW Plant in Toquepala 

## DIVIDENDS AND CAPITAL STOCK 

The Company paid dividends to stockholders of $191.4 million or $2.39 per share in 2004, compared to $45.4 million or $0.57 million per share in 2003, and $28.7 million (including $7.2 million used by the Company to honor an overdue receivable) or $0.36 per share in 2002. 

Distributions to the investment shares minority interest were $1.5 million, $0.4 million and $0.3 million in 2004, 2003 and 2002, respectively. 

On January 31, 2005, a transaction dividend of $1.25 per common share, totaling $103.4 million, was declared payable March 1, 2005. 

Cathodes handling at the SWEW Plant in Toquepala 

The Company´ s dividend policy continues to be re- viewed during the Board of Directors´ meetings, taking into consideration the current intensive capital invest- ment program, including the smelter modernization, and the expected future cash flow generated from operations. 

## ENVIRONMENTAL AFFAIRS 

The Company’s activities are subject to Peruvian laws and regulations. The Peruvian government, through its Ministry of Energy and Mines (MEM), conducts seven annual audits of SPCC’s mining and metallurgical opera- tions. Through these environmental audits, all matters related to environmental commitments, compliance with legal requirements, as well as atmospheric emis- sions and effluent monitoring are reviewed. The Ilo op- 

erations (smelter and refinery) are audited three times a year, and the operations at the Toquepala and Cuajone mines, twice a year at each mine. The Company has not incurred in material breach of environmental laws and regulations. 

As part of these regulations, SPCC submitted in 1996 the Environmental Compliance and Management Program (known by its Spanish acronym, PAMA) to the Peruvian government. A thorough third party environmental audit was conducted in order to elaborate the PAMA. The PAMA covered all current operations that did not have an approved environmental impact study at the time. SPCC’s PAMA was approved in January 1997 and contains 34 mitigation measures and projects necessary to: (1) adapt the existing operations to the environmental standards 

established by the government, and (2) identify areas af- fected by inactive operations which needed remediation. 

By the end of 2003, 31 of such projects were already completed, including all PAMA commitments related to the Company’s operations in Cuajone and Toquepala. The three pending PAMA projects are related to the Ilo smelter operations. The primary areas of environmental concern are: (1) Smelter reverberatory slag eroded from the slag deposits up until 1994, and (2) Atmospheric Emissions from the Ilo smelter. 

The slag remediation program is progressing as sched- uled and should be completed by 2007. Once the pro- gram is completed, no environmental risks are foreseen regarding this issue. 

