Overview Why TSM in Canada How it was developed How TSM Works Architecture Governance COI panel Performance indicators how they work External Reportin

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1 Towards Sustainable Mining December 5, 2012 Guelph, Ontario

2 Overview Why TSM in Canada How it was developed How TSM Works Architecture Governance COI panel Performance indicators how they work External Reporting Verification Biodiversity Conservation Protocol 2

3 About MAC The national organization of Canadian mining industry the Mining, smelting refining of base precious metals Mining of iron ore, diamonds, uranium, oil ss, coal industrial minerals Many associate members 3

4 Background Mining: Sustainable Towards Environment Commission on UN World focuses report Development environmental the on attention activity. industrial of impacts social 1990 s Early de Rio in Development Environment on UN Conference environmental of awareness public increases Janeiro pressure to begin NGOs groups Citizen damage. industry overnments g. Mining Whitehorse launches sector mining Canadian (WMI nitiative I. ) igh H - sites mine international at dam failures tailings profile media bring companies Canadian by operated owned sector. mining Canadian the to attention 1990s Late AC M task a up set Directors of Board sustainability a consider to force development Sustainable program. stakeholders researched, were issues guiding of set a consulted were designed was rinciples p.

5 THE UGLY CANADIAN THE PHILIPPINES: MARCOPPER KUMPTOR: KYRKYZSTAN GUYANA: OMAI LOS FRAILES: SPAIN 5

6 TSM: Designed by miners, for miners M AC focused on gathering stakeholder input, finalizing the guiding principles developing the key performance elements to respond to priority areas identified d uring the initial dialogue. T SM continues to evolve grow to meet the needs of s ociety Today P rotocols were tested, in 2004 the TSM initiative was launched at the AGM of the Canadian Institute of Mining, Metallurgy P etroleum in Edmonton.

7 Business case for TSM There are many reasons community issues is why addressing good for mining social, environmental companies: Performance improvement, Risk management, Access to capital, Social license, Recruitment Innovation retention, learning 7

8 What is TSM? Matory for MAC Members Based on facility- level reporting Includes external verification of companies performance C ommunity Transparent of Interest engagement built C redible, recognized as best in class Growing recognition into the program 8

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10 TSM Governance MAC Board of Directors TSM Governance Team Community of Interest Advisory Panel TSM Initiative Leaders Tailings Working Group Energy Task Force Public Affairs Committee Biodiversity Task Force Other MAC Committees/ Taskforces/Working Groups 10

11 Panel Advisory COI 11 OI C Composition Panel Advisory peoples Aboriginal NGO Environmental development Economic/community groups based faith NGO including Social Finance/investment development International Labour/workplace Media/communications AC M s Director of Board Representative Company Mining Junior per twice Meets year Panel of Work publicly the on available website MAC COI Annual Panel Statement in published TSM Progress Report

12 Guiding Principles Our actions must reflect a broad spectrum of values that we share with our employees communities of interest, including honesty, transparency integrity. And they must underscore our ongoing efforts to protect our employees, communities, customers the natural environment. MAC members are committed to: M inimizing the B eing i mpact of our operations on the environment, r esponsive to community priorities, P rotecting the health safety of communities; C onducting business our employees, contractors w ith excellence, transparency accountability; 12

13 TSM Performance Indicators Communities & People Environmental Footprint Energy Efficiency Aboriginal Community Outreach Crisis Management Planning Safety Health Tailings Management Biodiversity Conservation Management Energy Use Greenhouse Gas (GHG) Emissions Management Community of interest (COI) identification Crisis management preparedness Policy, commitment accountability Tailings management policy commitment Corporate biodiversity conservation policy accountability communications Energy use GHG emissions management systems Effective COI engagement dialogue Review Planning, implementation operation Tailings management system Facility- level biodiversity conservation planning implementation Energy use GHG emissions reporting systems COI response mechanism Training Training, behavior culture Assigned accountability responsibility for tailings management Biodiversity conservation reporting Energy GHG emissions performance targets Reporting Monitoring reporting Annual tailings management review Performance Operation, maintenance surveillance (OMS) manual 13

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15 TSM Verification System Self- assessment annual External verification every three years CEO letter of assurance posted on MAC website in year of external verification COI Panel Review 2-3 companies each year 15

16 Public Reporting Useful for comparison between companies ( p eer pressure) 16

17 TSM is In 2009, evolving MAC Board approved: The Aboriginal Outreach) Community The Biodiversity Conservation protocol Outreach protocol The Safety Health framework protocol (replaced External These are the first new indicators since the program was launched In 2012, MAC Board approved: R evised indicators for energy use GHG emissions management reporting on the revised indicators will begin in Work-in-progress Closure TSM Framework on Mine Closure (2008) D raft protocol in development 17

18 Biodiversity Conservation Protocol: Timeline 2008 Mining biodiversity framework approved by MAC Board of Directors 2009 Biodiversity Conservation Management Protocol was implemented 2011 MAC members reported internally against the TSM performance indicators for the first time 2012 MAC members participated in two workshops focused on biodiversity conservation management 2013 TSM results will be made public in aggregate form 2014 TSM results will be published at the facility- level 18

19 Mining Biodiversity Framework Conservation M AC members accept that a corporate commitment to biodiversity conservation is essential a nd have agreed to the following commitments: M AC m embers will positively contribute to s tages of the mining life cycle. M AC m embers will work with key communities of responsible p olicies practices to: a. b. c. d. e. the conservation of biodiversity through all i nterests t o develop implement i ntegrate the importance of biodiversity conservation, including respect for critical habitat, into mining l- use planning management strategies, including considering the option of not proceeding with a project. a ssess a nd monitor the state of biodiversity throughout the project cycle. a void, minimize, mitigate /or effects. compensate for significant adverse biodiversity e nhance, through research, information sharing /or partnerships, the industry s understing of contribution to biodiversity conservation, science traditional knowledge. e stablish, finance implement comprehensive reclamation plans that, wherever practicable, return mine sites to viable diverse ecosystems that will serve the needs of post- mining use, recognizing that mining can permanently alter lscapes that other desirable l uses may be considered in reclamation plans when justified by site- specific circumstances. 19

20 Mining Biodiversity Conservation Framework MAC members are committed to transparency public reporting on issues related to mining biodiversity conservation. MAC members, recognizing that protected areas can contribute to biodiversity conservation, will comply with the requirements of legally- designated protected areas are committed to working with key communities of interest to develop transparent, inclusive, informed equitable decision- making processes for the establishment of protected a reas. M AC member companies undertake not to explore or develop mines in World Heritage sites. All possible steps will be taken to ensure that pre- existing operations in World Heritage sites as well as existing future operations adjacent to World Heritage sites are compatible co- exist with biodiversity goals. M AC its members will demonstrate leadership by informing others of this Mining Biodiversity framework encouraging its adoption. 20

21 Biodiversity Conservation Protocol Three indicators: 1. Corporate biodiversity conservation policy, accountability communications 2. Facility-level biodiversity conservation planning implementation 3. Biodiversity conservation reporting Corporate Policy (e.g., No Net Loss) Target (annual) Target (long- term) Indicator 1 Indicator 2 Indicator 3 Indicator 4 Indicator 5 Annual Monitoring Periodic Monitoring Assessment // Evaluation Adjustment Reporting 21

22 For additional information Ben Chalmers Vice President, Sustainable Development Or Manager, Tara Shea Towards Sustainable Mining 22