Engaging with society

Transcription

1 Annua Review 04 Engaging with society The contribution of mining and metas Socia and economic deveopment Priority on strengthening the operation community reationship Materias stewardship Trends and emerging issues Heath and safety Environment and cimate change

2 CONTENTS ABOUT ICMM 6 SOCIAL AND ECONOMIC DEVELOPMENT MATERIALS STEWARDSHIP 4 THE CONTRIBUTION OF MINING AND METALS PRIORITY ON STRENGTHENING THE OPERATION COMMUNITY RELATIONSHIP About ICMM and this review 4 Vision, vaues, goa, objectives 5 ICMM organizationa structure 6 Chair s foreword 7 President s report 8 Members performance tabe 0 Trends and emerging issues Priority on strengthening the operation community reationship 4 The contribution of mining and metas 6 Socia and Economic Deveopment 8 Environment and Cimate Change 0 Heath and Safety Materias Stewardship 4 Member statistics 5 Counci officers, Counci members and member associations The Internationa Counci on Mining and Metas (ICMM) is an industry body created by the eading mining and metas companies to catayze strong environmenta and socia performance in the sector and to enhance understanding of the benefits, costs, risks and responsibiities of mining and metas in contemporary society. It works as a notfor-profit organization, engaging with a parts of society and coaborating with major mining and metas companies and 5 nationa mining and commodity associations that are its members. About this review Wecome to ICMM s Annua Review 04. This pubication highights some of the most significant events that ICMM has been invoved with in 04, reviews the progress we are making with our various work programs and other activities and outines some of the chaenges we face as we move into 05. The theme of this year s review, as the tite suggests, is engaging with society. We pick up from the previous annua review s focus on strengthening reationships with communities to examine the progress we are making on buiding this strategic priority into our work programs and other activities (pages and ). We aso expore ICMM s roe in better expaining the contribution that the mining and metas industry makes to society (pages 4 and 5). And, on pages 8 and 9, we provide a tabe detaiing how our member companies are performing with respect to the commitments they have made through their ICMM membership. It is important that ICMM is abe to anticipate and understand the externa environment, and so the work we do on trends and emerging issues is mapped out on pages 0 and. Reports from our core work programs Socia and Economic Deveopment, Environment and Cimate Change, Heath and Safety, and Materias Stewardship are featured on pages 6 to. The review rounds off with some interesting statistics about ICMM and its members (page 4) and detais of the Counci officers, Counci members and member associations (page 5) and financias (page 6). As usua, the review begins with some words from Mark Cutifani, ICMM s chair (page 6), and aso from our ong-serving president, Dr Anthony Hodge (page 7), who steps down from his position as the head of ICMM after seven years. For a more reguar update on ICMM s work, pease subscribe to our onine news service by emaiing us at info@icmm.com or foow on Twitter. We hope you enjoy the review. 0 TRENDS AND EMERGING ISSUES 0 HEALTH AND SAFETY 8 ENVIRONMENT AND CLIMATE CHANGE 6 Financias

3 4 5 VISION, VALUES, GOAL, OBJECTIVES ICMM ORGANIZATIONAL STRUCTURE Vision and vaues Goa and objectives Leading companies working together and with others to strengthen the contribution of mining, mineras and metas to sustainabe deveopment. Working coaborativey with others, to enhance the vaue creation roe and ong-term net contribution of the mining, mineras and metas industry and its products to peope, the environment and economies. PRESIDENT Anthony Hodge Care For the safety, heath and webeing of workers, contractors, host communities and the users of the materias we produce. Improve sustainabiity performance To catayze and faciitate the definition and continuous improvement of socia, environmenta and economic practices. DIRECTOR Aidan Davy Deputy President and Senior Program Director Ross Hamiton Hannes Struyweg John Atherton Brigid Janssen Duncan Robertson Respect For peope and the environment, ensuring that we are sensitive and responsive to the vaues of host societies. Integrity As the basis for engagement with empoyees, communities, government and others. Accountabiity To do what we say we wi do and uphod our commitments. Listen to others and anticipate change To isten to others, identify pubic concerns and anticipate change so members can better understand evoving societa vaues, proactivey address risks, avoid crises and serve in a eadership position in addressing issues of pubic concern. Communicate To identify and communicate the nature of the contribution of the mining, mineras and metas industry to sustainabe deveopment. 4 Strengthen engagement capacity To buid and maintain effective reationships with those important for ensuring the industry s icence to operate. 5 Seek fair and consistent reguation To seek and support the coaborative deveopment and impementation of fair and consistent poicies and reguations for governing the performance of companies invoved in mining-, mineras- and metas-reated activities around the word. MANAGER PROGRAM OFFICER Kate Carmichae Caire White Meera Thankey Ruth Thomas Hayey Zipp Senior Program Officer Mark Homes Ben Davies Katsuhiro Mori Heen Atkinson Fernanda Diez Sarah Stern Luke Baeny Senior Program Officer Laura Pockne Senior Program Officer Kayey Gafur Coaboration Working with others in an open, transparent and incusive way as we address the chaenges. 6 Represent To represent the coective views and interests of member companies as appropriate and act as a principa point of contact with the industry s key constituencies in the internationa arena. PROGRAM Socia and Economic Deveopment Environment and Cimate Change Heath and Safety Materias Stewardship Core services Currenty on secondment from Sumitomo Meta Mining Pease note: this chart refects primary responsibiities a number of staff work across more than one program.

4 6 7 CHAIR S FOREWORD PRESIDENT S REPORT Mark Cutifani ICMM Chair It has been an honour to serve as chair of ICMM for the past two years in a roe that has given me a further opportunity to focus on the potentia for the mining and metas industry to ead positive socia and environmenta change. Turbuent times for commodities can test the commitment to deep engagement with stakehoders and strong performance in sustainabe business practices. But even as we faced faing prices for our products, ICMM members have not ony respected socia and environmenta principes but have aso worked to enhance and deveop them beyond our current miestones. The onus is on us, as ICMM members, to mode eading practices and deiver performance that sets the benchmark for our industry. We must never underestimate the importance of our eadership in promoting eading mining practices. ICMM has been instrumenta in supporting the way in which we engage with the host communities and governments. This past year we paced particuar emphasis on strengthening the reationship between operations and host communities. This is the area we need to strengthen if we are to achieve across-the-board community acceptance. Each of the ICMM programs has been refocused using this ens: Socia and Economic Deveopment, Environment and Cimate Change, Heath and Safety, and Materias Stewardship. But it s sti not enough. The demands of our diverse stakehoders are constanty evoving, and we need to ensure that our industry is recognized as being a significant and positive contributor to society. We created ICMM more than a decade ago to act as a catayst to improve sustainabe deveopment practices and to buid understanding of the socio-economic context of our mining and metas operations. Now, some 4 years ater, it is time to take stock of our considerabe progress and extend the scope of a responsibe mining and metas industry. We must turn our coective ambition to encouraging more widespread adoption of responsibe mining practices. We must focus on those programs that support engagement and the constructive promotion of our industry with a view to infuence and drive positive outcomes. We can achieve our objectives by making fu use of the extensive channes of communication we have opened with communities, governments and many more stakehoders in civi society, academia and faith groups. The ICMM team has continued to deveop important networks, particuary under the presidency of Tony Hodge. Tony has earned the gratitude and deep respect of his coeagues and the members of ICMM. After serving the organization and membership for seven years, he eaves the organization in good shape and ready to take another important step in buiding the reputation of the industry and our member companies. In the transition to a new president, and as I hand over the chairmanship, I encourage ICMM to draw on its work and networks to go beyond the impact of its prescription for sustainabe deveopment. ICMM shoud remain a beacon in guiding our coaborative and coective efforts to promote our industry and the good it does for a broader society. As we navigate our next steps together, we must be mindfu that society needs a strong and vibrant mining industry to hep ift peope from poverty, and we need society s support to hep us deiver on this most important responsibiity. Mark Cutifani, ICMM Chair In October 0, Counci set a cear and new priority for ICMM: to focus on strengthening the community operation reationship. At the same time, we retained responsibiity for addressing the strategic topics important to our mandate in particuar, for strengthening our understanding and communication of mining s contribution to today s word. This change in direction governed a of our activities in 04. Trust between operations and communities depends on what we do not what we say. Our ongoing work on human rights, Indigenous Peopes, water stewardship, biodiversity, heath risks, cimate change, cosure, chemicas management and transportation of ores and concentrates a touch on our members performance. However, it is not just what we do but how we do it, and our Mining: Partnerships for Deveopment initiative provides a eading-edge approach to coaborative action on the ground. At the same time, there is insufficient understanding of the roe of mining and metas in today s word. To that end, we have increased efforts on non-industry outreach. In 04, ICMM staff participated in 55 externa events, 9 of these aimed at a non-mining and metas industry audience. Communications and performance are part of the same package performance + engagement + narrative = impact/success. As part of ICMM s mandate to enhance understanding of the potentia contribution of mining and metas in economic and socia deveopment, we pubished a new edition of The roe of mining in nationa economies. The report ranks countries according to their economic dependency on mining and demonstrates mining s huge potentia for reducing poverty and increasing prosperity in some of the poorest parts of the word the highest priority of the emerging Sustainabe Deveopment Goas. The interest from investors in the work of ICMM and the standards we set, and their impications for member performance, continues to grow. Increasingy, investors are using a responsibiity ens, but more importanty, they recognize that effective adherence to the ICMM principes transates to stronger company management. Preparation has begun on our next three-year Strategy and Action Pan (06 08). The new strategy wi ead to renewa and, to some extent, redirection. Change is inevitabe as we adapt to the evoving needs, aspirations, and vaues of society. However, ICMM s basic mandate remains to serve as a change agent in strengthening mining and metas contribution to sustainabe deveopment. I am sad that Vae stepped back from ICMM in 04 and hope it wi return to ICMM in the future. However, ICMM was peased to wecome two new members in 04: Gencore and Antofagasta Mineras. Next year we may grow a bit more. Aso, towards the end of 04, we initiated the transition to a new ICMM president. I am proud of the evoution of ICMM since I arrived in 008 and confident that the organization I step away from in 05 has a strong foundation to carry it forward. At the same time, I am very cognizant of the change and improvement that ies ahead for ICMM. The work we do at ICMM is made possibe by a highy committed Counci of CEOs, Principa Liaisons, technica input from across our company and association members, and a skied team of ICMM staff. A contribute with care, respect, integrity, accountabiity and coaboration the vaues that drive ICMM s cuture. My reationships with a of those that have contributed in and around ICMM have come to mean a great dea to me. It has been a great honour and priviege to work with ICMM and to see the changes we have achieved together. Dr R Anthony Hodge, President Dr R Anthony Hodge President

5 8 9 MEMBERS PERFORMANCE TABLE The tabe ists our member companies and the progress each company is making against the performance commitments they have made through their ICMM membership. Members were required to report in ine with the Goba Reporting Initiative (GRI) G Guideines and the Mining and Metas Sector Suppement. In addition, they were required to obtain independent externa assurance of subject matters 5 ( our-work/sustainabedeveopment-framework/ assurance). For 05 reports, members wi be required to report in accordance with the core option of the GRI G4 Guideines and the Mining and Metas Sector Discosures. FOOTNOTES ** There is sti some ambiguity about whether a appicabe requirements of ICMM s position statements are fuy addressed. This aspect wi be carified in the updating of ICMM s assurance procedure during 05. ** Antofagasta Mineras and Gencore became ICMM members in 04. Fu membership requirements wi come into effect within two years of joining ICMM Aignment between members poicy frameworks on SD issues and ICMM s SD principes and mandatory requirements set out in ICMM s position statements* Process and outcome for identifying and prioritizing materia SD risks and opportunities Systems and approaches to manage materia SD risks and opportunities Performance for the identified SD risks and opportunities Goba Reporting Initiative (GRI) Reported on Assured Reported on Assured Reported on Assured Reported on Assured Reported on/assured Reported on Sustainabe deveopment (SD) or integrated Company report for the financia year ending subject matter subject matter subject matter subject matter 4 subject matter 5 African Rainbow Mineras 0 June 04 A+ Ango American 0 June 04 AngoGod Ashanti December 0 Antofagasta Mineras** December 0 Areva December 0 A+ Barrick December 0 A+ BHP Biiton 0 June 04 A+ Codeco December 0 Freeport-McMoRan December 0 A+ Gencore** December 0 A+ Godcorp December 0 A+ God Fieds Hydro JX Nippon Mining & Metas Lonmin Mitsubishi Materias MMG Newmont Rio Tinto Sumitomo Meta Mining Teck Integrated Annua Review December 0 A+ G appication eve December 0 March 04 A+ 0 September 04 March 04 A+ December 0 A+ December 0 A+ December 0 A+ March 04 A+ December 0 A+ G4 appication eve NOTES Coumn : a dot in this coumn reported on the aignment of their poicies with ICMM s 0 principes and any mandatory requirements set out in ICMM s position statements (ie subject matter ). Coumn : a dot in this coumn sought independent third party assurance on subject matter. Coumn : a dot in this coumn reported on processes to identify and prioritize the SD risks and opportunities faced by the business during the reporting period and the outcome (ie its ist of materia issues, subject matter ). Coumn 4: a dot in this coumn sought independent third party assurance on subject matter. Coumn 5: a dot in this coumn reported on the systems and approaches that the company is using to manage each (or a seection) of the materia SD risks and opportunities (ie subject matter ). Coumn 6: a dot in this coumn sought independent third party assurance on subject matter. Coumn 7: a dot in this coumn reported on their performance during the given reporting period for each (or a seection) of the identified materia SD risks and opportunities (ie subject matter 4). Coumn 8: a dot in this coumn sought independent third party assurance on subject matter 4. Coumn 9: the etter in this coumn indicates a company s sef-decared appication eve of the GRI G Guideines (ranging from A to C, ie subject matter 5). The + in this coumn indicates that members have sought independent third party assurance on subject matter 5. Coumn 0: For 05 reports, members wi be required to report in accordance with the core option of the GRI G4 Guideines and the Mining and Metas Sector Discosures. Some members have aready made (or are in the process of making) the transition to G4 for their 0 reports (as indicated by a dot in this coumn).

6 0 TRENDS AND EMERGING ISSUES Our abiity to see over the horizon is critica to our goa of anticipating change, trends and emerging issues so that members can better understand evoving vaues, proactivey address risks, avoid crises and serve in a eadership position in resoving issues of pubic concern. These are the boundary conditions within which the mining and metas industry operates. In 00, ICMM formay began work to inform our understanding of emerging issues. This incuded drawing on: insights from scenarios work competed by staff and by others anaysis of trends-reated work competed by others findings from Gobescan s annua sustainabiity survey ICMM s stakehoder po on goba trends reating to mining and sustainabiity ICMM s scan of NGO campaigning trends across the word ICMM s scan of media stories about mining and sustainabe deveopment from 9 goba broadsheets. In May 0, a imited update of ICMM s 00 work was undertaken. In 04, we pushed our effort up another notch. In addition to drawing insight from the many efforts to capture trends that exist (eg from the Word Economic Forum, Word Resources Institute, and many think tanks and consutancies), we: repeated our NGO campaigning and media scans undertook an anaysis of socia media for the first time competed an expanded survey of ICMM s own stakehoders across countries, measuring awareness and perceived effectiveness of ICMM and the issues facing the mining and metas industry examined trends in goba poicy deveopments and the institutions eading them, buiding on a 008 review competed by ICMM s Associations Coordination Group conducted structured interviews with 45 infuentia stakehoders outside the industry about their thinking on emerging issues important to the industry the resuts formed the basis of a cooquium convened in November to draw out insights started a discussion with the Commonweath Scientific and Industria Research Organisation (CSIRO) and the Internationa Institute for Environment and Deveopment to deveop a pubicy avaiabe database of citizen attitudes to mining CSIRO has deveoped a methodoogy for assessing citizen perceptions of mining, and ICMM aso pans to work with CSIRO to deveop a bespoke too to survey country-eve citizen perceptions. The key trends and issues that emerged from this exercise have been captured in the graphics on page and wi inform us as we deveop our work program activities moving forward. At the same time, we continue to hone and strengthen our capacity for ooking over the horizon.. Turbuence up Increasing geographica and economic turbuence; human migration/refugees increasing; stretched internationa agencies; shocking unempoyment in some countries. Growing concerns Inequity; Indigenous Peopes; mine safety and community heath and safety; water; cimate change; overa biodiversity oss; cutura diversity oss. Concerns shifting to rights narrative Exampes: water; royaties/taxes; move to environmenta court of justice; environmentassigned rights 6. Antagonism up Strong beief that the word is being controed by evi, out-of-contro mutinationa corporations 8. Cyber-threats Growing misinformation onine; internet security an increasing priority 9. Increasing coaboration No one party can resove issues; need to bring aternate vaues to the tabe; forma muti-interest mechanisms growing (eg Extractive Industries Transparency Initiative) 0. Increasing pressure for transparency and accountabiity Growing anticorruption movement; pressure for certification; responsibe investment criteria hitting the mainstream; consumer vaues driving corporate performance; iabiity rues changing to increase the persona responsibiity of board members 4. Performance goaposts changing faster than performance Whie eading performance is up (athough aggards remain), company community confict is aso on the rise fed by stronger goba communications and resuting community empowerment 5. Understanding down Litte understanding of the fu range of benefits, costs and risks of the mining and metas industry; responsibiities and accountabiities not we defined 7. Mining-reated NGO activity up Thirty per cent increase from 0 to 04; major focus is the environment; infuence of western NGOs sipping in Latin America; oca groups growing. Rising demand Increasing demand for mineras and metas; growing midde cass; urbanization; China setting the agenda for mining and metas. Growing roe of deveopment Growing roe of mining in ow- and midde-income countries; agencies now seeing mining as a deveopment engine; major opportunity to ink to deivery of the Sustainabe Deveopment Goas; new business modes emerging

7 PRIORITY ON STRENGTHENING THE OPERATION COMMUNITY RELATIONSHIP Our focus on strengthening the operation community reationship refects a change in strategic priorities for ICMM. This was prompted in part by the reaization that confict between operations and their host communities appears to be on the increase. This new focus is evident in a of our work programs. This incudes the work on gauging the state of their community reationships; on water, a major cause of community confict; on confict mineras; and on heath and safety. Our activities aimed at strengthening the operation community reationship wi continue in 05, set ceary in the context of the mining society reationship. Foowing a Counci decision, the priority for ICMM in 04 was to focus on strengthening the reationship between operations and communities that host them. This direction change and focus was inked to a reaization that, in spite of much good work and the improved performance of many mining companies, confict between operations and their host communities appears to be increasing across the word. The October 0 decision ed to a major redesign of the 04 budget and work pan. Each eement of our budget was tested for vaue-add in terms of contributing to either strengthening operation community reationships or to strategic topics important to our mandate. The resut is a work pan that is more focused, effective and efficient, with which both staff and members are deepy engaged. Each of our program areas is contributing to this effort. The Socia and Economic Deveopment work program encompasses work on human rights, Indigenous Peopes and community deveopment a cosey reated to community concerns that are driving the reationship with A number of companies have come forward to embrace principes such as revenue transparency and free, prior and informed consent (FPIC), which hep ensure communities are invoved in decisions about mining, their rights are respected and they are given adequate information about projects and impacts. Companies have aso begun to ook at how they use resources water, most importanty that communities need for their surviva. Raymond C Offenheiser President, Oxfam America operations. In addition, a project was aunched to design an approach that woud aow companies to gauge the state of their community reationships, a critica starting point for taking actions to improve those reationships. This work is now being fied-tested to ensure the approach is sufficienty robust. The Environment and Cimate Change work program s projects on water stewardship, biodiversity and cosure touch on major community concerns. Water, in particuar, is the singe most dominant contributor to operation community confict in the word. Improved performance on these topics spins off directy to strengthening reationships with communities. Workers are empoyees but aso community members. A sense that an operation cares about worker and community heath and safety is a major source of trust buiding between operation and community or conversey, trust breaking if company action is not considered adequate. Few think about the use of the commodities that are mined and the contribution to community we-being that resuts. So the operation community reationship priority reaches deepy into our Materias Stewardship work program as we. Here, too, is our work on confict mineras, a significant factor undermining community trust. The focus on strengthening the operation community reationship wi continue in 05. However, there is a growing sense that operation community reationships cannot be addressed effectivey uness more ceary paced in the context of the mining society reationship. Part of Newmont s activities caed face to face with Cajamarca. Workers from different areas of the company went to the streets, paced fip charts and expained Newmont s activities and duties in Yanacocha, its socia responsibiity and other issues reated to its operation to the peope passing by. Rio Tinto s visitors program forms an important part of its stakehoder engagement activities. Twine bags produced by Ayoreo viagers, Santa Cruz Department, Boivia. The designs are inspired by can insignia.

8 4 5 THE CONTRIBUTION OF MINING AND METALS ICMM recognizes that the concept of the contribution of the mining and metas industry to society is poory understood. Consequenty, part of our work in 05 focused on producing evidence reating to this contribution. For exampe, we pubished a new edition of The roe of mining in nationa economies in 04, demonstrating the contribution of mining towards reducing poverty and increasing prosperity in some of the poorest parts of the word. We pan to expand this work beyond a macroeconomic focus to encompass the fu range of benefits, costs and risks over the ong term and their distribution across society. In 009, the ICMM President s Office began incubating a project on mining and metas contribution. The motivation then, as it is today, was a reaization that few reay understood the true nature of that contribution. This ack of understanding appies not ony to mine projects but aso to the commodities that are produced and make possibe today s word. By contribution, we do not just mean the benefits that resut. Rather, it is a concept that takes into consideration both the benefits, or positives, that are achieved, as we as the costs and risks that must be carefuy managed to achieve those benefits over the ong term. There is a fundamenta distribution issue at stake here. For if a the benefits accrue to one party, whie another party carries a the costs and risks, it is utimatey unfair and a potentia cause of confict. In today s word, many beieve that the distribution of benefits, costs and risks reated to mining and metas is patenty unfair. But the compete picture is poory understood, on a sides. Thus, our roe is to bring we-documented evidence on the matter into pubic view. Thus, ICMM set out to examine this topic. In 0, as part of the preparations for Rio+0, we pubished a short InBrief pubication ooking at mining s roe in nationa economies across the word. This work used a newy crafted mining contribution index that drew on the best avaiabe data sets It is cear that mining is increasingy being recognized as a ever for sustainabe deveopment. ICMM s report [The roe of mining in nationa economies] heps set reaistic expectations as to where and how mining can contribute and the magnitude of the potentia impact, both of which are criticay important for poicy makers in thinking hoisticay about how to super-charge the mining engine. As the report notes, coaboration between mining companies, governments, oca communities and other stakehoders is critica to ensure that the deveopment potentia of mining can be maximized. Terry Heymann Managing Director, God for Deveopment and Market Inteigence at Word God Counci in the word. In ooking at the macroeconomic contribution at the nationa eve, it did not caim to cover the compete spectrum of contribution. But it provided a sense of mining s importance to nationa decision makers across the word. In 04, we pubished the second edition of The roe of mining in nationa economies, an updated and more comprehensive version that now covers a 4 nationa jurisdictions in the word, the first to do so. It provides starting evidence of the current importance of mining, particuary The mine project ife cyce High Labour/activity eve Low Exporation 0 years or more Site design and construction 5 years in ow- and midde-income countries. It is proof that mining s potentia roe in reducing poverty and increasing prosperity in some of the poorest parts of the word the highest priority of the emerging Sustainabe Deveopment Goas is immense. There is no doubt that the fu potentia of mining and metas has yet to be reaized. We are a companies, host communities, governments, civi society organizations, unions, academics earning how to achieve approaches that are win-win. But this work provides a Operation 00 years Styized profie of government revenue contributions (right-hand axis) 4 Fina cosure and decommissioning 5 years 4 5 Time foundation to track how we strengthen the contribution of mining and metas, something that ies at the centre of ICMM s mandate. In the years ahead, this work needs to be expanded beyond the current macroeconomic focus to incude the fu range of benefits, costs and risks over the ong term and their distribution across society. 5 Post-cosure A decade to perpetuity High Leve of government revenues Low Buidings consume around 40 per cent of the word s energy demand. Auminium has many properties that may be expoited to achieve buidings with very ow energy demand, and even buidings that are net producers of energy. Image courtesy of Hydro. African Rainbow Mineras workforce is represented by neary 5,000 dedicated empoyees and contractors who pass through its gates every day.

9 6 7 CORE PROGRAM SOCIAL AND ECONOMIC DEVELOPMENT The Socia and Economic Deveopment work program s focus is on understanding how arge-scae mining can enhance socio-economic deveopment and mitigate risks. Activities in 04 incuded revisiting our Mining: Partnerships for Deveopment work in Ghana, updating our Good Practice Guide: Indigenous Peopes and mining and work aimed at understanding the dynamics of company community reationships (incuding confict and how to avoid it). There were aso internationa workshops on human rights and Indigenous Peopes. In 05, we wi be encouraging greater uptake and appication of the many toos and guidance documents ICMM has produced. The Socia and Economic Deveopment work program s focus is on understanding how arge-scae mining can enhance socio-economic deveopment and mitigate risks. Our Mining: Partnerships for Deveopment Tookit provides a means to objectivey assess the industry s fu economic and socia contribution within individua countries and inspire stakehoders to work coaborativey moving forward. In Apri 04, ICMM pubished its report Enhancing mining s contribution to the Zambian economy and society, which identified how coaboration coud strengthen the contribution of mining to the economy and society of Zambia. For exampe, better data woud improve the quaity of decisions; there coud be a more effective approach to socia investments and oca content deveopment; and there is a need for greater stabiity, transparency and accountabiity in the sector. An evauation in 0 of ICMM s Mining: Partnerships for Deveopment Tookit identified that ICMM shoud return to countries where the tookit has aready been impemented to reinforce past efforts, as we as working in new countries. As a resut, ICMM is revisiting Ghana, where the Mining: Partnerships for Deveopment Tookit was first appied in 007. ICMM has worked with the Ghana Chamber of Mines to prepare for the appication of the ife cyce modue, which is an enhancement to the origina tookit. In Ghana, the ife cyce modue wi assess the future contributions of the arge scae god mining sector to GDP, government revenues and the baance of payments over the ife cyce of the mines. This is a forward-ooking exercise that considers the impact of future investments at the macro-economic and oca socio-economic eves. Most of the substantive work was competed in 04, and a mutistakehoder workshop wi be hed to test the findings in 05. ICMM s Good Practice Guide: Indigenous Peopes and mining is in the process of being updated, foowing on from the deveopment of the Indigenous Peopes and Mining Position Statement in 0. ICMM aso convened two internationa workshops on human rights and Indigenous Peopes, bringing together internationa stakehoders to discuss key chaenges and opportunities. A further piece of work in 04 and 05 is aimed at understanding the dynamics of company community confict For the ast decade, the Internationa Counci on Mining and Metas (ICMM) has been heping the industry catayse wide-reaching and ong-asting benefits for its stakehoders. An essentia part of the answer is for industry to work in partnership with government and civi society to make positive change happen. Mines to Markets, Issue 06 Rio Tinto and how to avoid it. ICMM anayzed data on the prevaence of confict between mining companies and communities over a period of a decade. The resuts accord with the perception that company community confict has increased in recent years athough it was uncear whether this is a resut of increased reporting of incidences or a genuine increase. Coaborating with the NGO, Internationa Aert, we hed a regiona workshop on confict in Santiago, Chie. Stakehoders from both civi society and companies across Latin America expored issues emerging from our research on company community confict. Looking forward, we pan to train a number of institutions from around the word to ead on future Mining: Partnerships for Deveopment Tookit appications in priority regions. African Rainbow Mineras Broad- Based Economic Empowerment Trust donated six tractors and farming equipment to the North West/Free State Rura Upiftment Trust to empower and boost agricutura projects in the oca communities within the Free State province. Microfinance and community banking schemes are now benefiting 4 viages around MMG s Sepon mine, Laos. Liomar Vida, an Ango American community reations officer, at the Professora Maria Siqueira Pinto Schoo, which Ango American heped to buid in Barro Ato, Brazi.

10 8 9 CORE PROGRAM ENVIRONMENT AND CLIMATE CHANGE ICMM s work on water was a notabe part of the Environment and Cimate Change work program ast year. We aunched our water stewardship framework, deveoped guidance on impementing a catchment-based approach to effective water management and prepared the way for more effective water discosure and reporting across the industry. Together with the Internationa Union for Conservation of Nature, we pubished a report reviewing our members biodiversity performance over the ast decade. We aso hed the first in a series of stakehoder workshops aimed at deveoping a three-year work pan on mine cosure. In a work program that covers biodiversity, water management, cosure and cimate change, it was our work on water that stood out in 04. This is the issue that is dominant across the word and ies cosest to strengthening the reationship between communities and operations. We aunched the ICMM water stewardship framework at the CEO Water Mandate Conference in Apri in Lima, Peru. The framework prioritizes a catchment-based approach to water management, considering the needs, concerns and priorities of other water users across the entire river basin. The framework aso promotes transparency and accountabiity, as we as continuous incusive engagement, coaboration between stakehoders and partnering with others. Foowing the aunch of the framework, we worked with ICMM members, externa experts and other industries to deveop practica guidance on the impementation of a catchment-based approach to effective water management for the industry, aunched in eary 05. ICMM s emphasis on water stewardship wi continue in 05 with a shift towards impementing the catchment Over the ast few years we have witnessed mining companies addressing water impacts and chaenges faster than amost any other sector. Stuart Orr Head of Water Stewardship, WWF guidance in water-stressed regions of the word and ooking particuary at how best to harmonize water discosure and reporting across the industry. In 04, ICMM, in partnership with the Internationa Union for Conservation of Nature (IUCN), conducted a review of the biodiversity performance of our members over the past 0 years. The independent report identified significant improvements in the sophistication and appication of biodiversity management systems. It recommended areas for future coaboration between NGOs and industry to demonstrate positive biodiversity outcomes at a site eve. The report was aunched at the IUCN Word Parks Congress in Sydney, Austraia an internationa forum hed every 0 years that brings together wordwide conservation experts to share knowedge, refect on progress and set the agenda for protected areas conservation for the coming decade. ICMM aso continues to be part of the Cross-Sector Biodiversity Initiative (CSBI), bringing together the mining and metas industry and the oi and gas and finance industries to improve biodiversity performance. In 05, the CSBI wi produce two practica guidance documents on impementing the mitigation hierarchy and on conducting biodiversity baseine assessments. Considering the ong-term timeframes in which mining and metas operations take pace, the industry s contribution to communities, the environment and the economy often ony becomes cear after a mine coses. Panning for cosure, therefore, must be a core part of business from the eariest stages of the mine ife cyce. In 04, we hed two workshops on cosure in Denver, USA, and Santiago, Chie. The workshops brought together oca members and participants from cross-cutting functions, incuding panning, community engagement and restoration, to deveop a threeyear work pan on mine cosure. We wi convene a further two regiona roundtabes in 05 and conduct a reguatory review and associated guidance for members reating to cosure in key operating jurisdictions. ICMM s cimate change efforts in 04 focused on the adaptation of oca community iveihoods to the physica effects of cimate change. A piot project was conducted at a Rio Tinto operation in Peru, triaing a process for evauating the resiience of oca communities to the impacts of cimate change and identifying potentia responses. Moving into 05, we wi share the resuts of the piot project with members and examine approaches for assessing cimate change risks to mining operations. Cimate change poicy issues wi aso take on particuar reevance as we approach the United Nations Cimate Change Conference (COP) in Paris, France in November and December. The Borokoni dam, buit by AngoGod Ashanti, provides water to the Borokoni Viage near Yatea in Mai, an exampe of creating asting and positive ong-term benefits. Rio Tinto s hydroogy department checks water quaity in oca river Canga East in Guinea, West Africa. BHP Biiton s seed management work has ed to major advances in its knowedge of sustainabe seed management practices. Take the Pibara Seed Atas, for exampe, the product of a six-year study. This fied guide is avaiabe to seed coectors, industry members, researchers and the genera pubic.

11 0 CORE PROGRAM HEALTH AND SAFETY Much of the work in ICMM s Heath and Safety program ast year focused on our objective of heping the mining and metas industry achieve zero harm. We surveyed best practice on critica contro management among our members and organizations in a number of other sectors. The resuts of this research wi be pubished in 05 as a Good Practice Guide. In 04, we aso pubished ICMM s first heath and safety performance benchmarking report, as we as guideines on heath and safety performance indicators and eading indicator deveopment. The mining and metas industry has an utimate goa of zero harm. As the next step to attaining this goa, ICMM has set an interim objective of achieving zero fataities caused by injuries and diseases. This focus on zero fataities was triggered by a sowdown in the pace of the reduction in fataities over the past five years. This is an area where our own members are not yet achieving the success they seek. In 04, ICMM s work on the cross-sector sharing of best practice in risk management identified critica contro management as an opportunity to further improve the reduction in fataities. Member companies and sectors making progress towards zero fataities, such as aviation, oi and gas, chemica and nucear, were surveyed to determine what critica contro management practices are appied that produce exceptiona fataity reduction resuts. Drawing on the survey and industry research, we wi pubish a report on a common methodoogy for critica contro management in the mining and metas industry in an ICMM Good Practice Guide in 05. I expect safety to be the most important focus area for a of our peope, every day, in every task they do. Nothing is more important. It is essentia that we earn from tragic events, and from near misses that coud have had tragic outcomes, so that we prevent further oss of ife. Sam Wash, Rio Tinto The focus on reducing fataities takes up much of our current work, and we wi use the biannua heath and safety forum in London to share members experiences and obtain input from other eading sectors on eading practice. We further endeavour to buid reationships with academic institutions and professiona certification bodies to redefine the roes and competencies required to address future chaenges connected with this topic. Efforts to track our performance in a consistent manner ed to the pubication of heath and safety performance indicator guideines, eading indicator deveopment guideines and the pubication of the first ever heath and safety performance benchmarking report. The report shows that ICMM members have exceptiona safety performance compared with the rest of the mining industry. But it reminds those committed to a zero harm objective that there is no room for compacency. The fataities data highights the chaenge in reducing harm, reminds us of the risks inherent in the industry and emphasizes the need for aternative approaches and sharing of best practice. Looking to the future, ICMM s heath and safety work wi focus on deveoping and impementing a heath strategy. This wi not ony transform our performance but drive our focus away from zero harm to a position where our industry has a positive impact on the heath and we-being of our communities, society and our workforce, beyond empoyment and over the fu ife cyce of our operations and products. Keitumetse Hynes is a hau truck operator at Ango American on the Komatsu 960E trucks. She has been trained to use the coision avoidance system on the vehices. Gencore has a ong history of investing in heath initiatives in Zambia. These incude programs targeting specific regiona heath issues such as HIV/AIDS, maaria and cervica cancer, as we as making contributions to oca heathcare faciities. Achieving zero harm requires absoute adherence to poicies, standards and procedures that are intended to protect empoyees from injury and iness and minimize significant negative impact on their ives. Rio Tinto s eight Life Saving Rues were introduced, comprising critica protective principes according to which risk is mitigated and injuries prevented.

12 CORE PROGRAM MATERIALS STEWARDSHIP In 04, ICMM s Materias Stewardship work program focused on chemicas management and responsibe suppy. Substantia progress was made on an updated version of the Metas Environmenta Risk Assessment Guidance (MERAG) to be pubished in 05. Working with the Asia-Pacific Economic Cooperation (APEC), we introduced a program of metas risk assessment training for severa of APEC s member economies. We aso deveoped guidance to encourage responsibe behaviour in the mineras and metas vaue chain and to hep raise awareness within the mining and metas industry about the principes and poicies of the circuar economy. ICMM s Materias Stewardship program works to promote the responsibe production and use of mineras and metas. It is the eement of ICMM s activities that most focuses on the fu product ife cyce and from that perspective, how mining and metas contribution to sustainabe deveopment can be strengthened. This past year our work has focused on two key areas: chemicas management and responsibe suppy. Through our chemicas management work, we aim to ensure that systems used to assess the safety of mineras and metas (which are regarded to be chemicas) are based on the most advanced and appropriate science. These are areas that capture many peope s concerns at a We aim to buid a strong foundation of information and systems that promote traceabiity for the future which can be used to hep ensure mineras in our products are from responsibe sources. Vodafone community eve and across society. We undertake this work primariy by co-ordinating the activities of company and association experts towards common outcomes and by engaging with poicymakers at the goba eve to secure widespread use of the best science. When we succeed in this activity, pubic poicy is stronger, our abiity to protect the environment and the heath of workers and the communities around companies operations is strengthened and our roe in society is seen in a more positive ight. Much of this scientific deveopment and shaping of chemicas assessment has been captured in the form of practica guidance. In 04, we began a process of updating the Metas Environmenta Risk Assessment Guidance (MERAG) originay deveoped and pubished by ICMM, Eurometaux and the UK Government in 007. ICMM recenty convened scientists from nationa governments, companies and commodity associations to peer-review the updated version of MERAG a critica step towards maintaining the integrity of this resource. The revised MERAG wi be pubished in 05. ICMM is currenty focusing outreach on chemicas management in Asia where cose to 75 per cent of a mining and metas trade and investment takes pace. The Asia-Pacific Economic Cooperation (APEC) and ICMM are co-ordinating a program of metas risk assessment training for APEC s member economies in 05. Severa APEC economies are introducing advanced chemicas management reguations, and ICMM views this as an opportunity to ensure awareness of best practice in the hazard and risk assessment of mineras and metas throughout the region. ICMM aso pubished guidance on the hazard assessment of ores and concentrates for marine transport. It promotes a consistent, responsibe approach to the assessment of cargoes from the mining and metas industry. Initia feedback indicates that our approach has been we received by members of the Internationa Maritime Organization, which governs cargo shipments. In this one initiative we have saved our members significant sums. Our work on responsibe suppy responds to cas from reguators and society for the transparency and traceabiity that can hep demonstrate and encourage responsibe behaviour in vaue chains from mine to market. We have been working with members to buid a common understanding of systems for sustainabe procurement and aso earning from responsibe sourcing initiatives in the vaue chains of other materias such as wood, pam oi and cotton. We are now transating this understanding into guidance for our members to assist them in identifying opportunities to demonstrate the responsibe suppy of mineras and metas to buid sustainabe vaue chains. An important aspect of this work reates to the circuar economy a theme that is centra to the emerging Sustainabe Deveopment Goas. ICMM is seeking to define the roe of mining in the circuar economy and raise awareness within the industry of the principes and poicy that support it. Indeed, the circuar economy wi be a focus of the eighth Materias Stewardship Roundtabe to be convened in the second haf of 05. Discussions at the seventh Materias Stewardship Roundtabe centred on the future of materias stewardship eadership, poicy and practice and how this wi infuence the shape of ICMM s future activity. Container ship oading copper cathode, produced at Gencore s Queensand operations, at the Port of Townsvie. Automotive companies are constanty innovating to find new materias and new ways of using them in their products. Auminium can be recyced over and over again without degradation in quaity. Recycing requires 95 per cent ess energy than primary auminium production. Image courtesy of Hydro.

13 4 5 MEMBER STATISTICS COUNCIL OFFICERS, COUNCIL MEMBERS AND MEMBERS ASSOCIATIONS ICMM members share of word production 54% of mined copper 5% 950 operationa sites 45% of mined patinum group metas 5 member associations of mined siver 58 countries 9% of mined iron ore member companies 7% 9% 5% of mined coa 0% of mined ead % Counci officers Mark Cutifani ICMM Chair Chief Executive Ango American Andrew Michemore ICMM Deputy Chair MMG Donad Lindsay ICMM Treasurer Teck Counci members Patrice Motsepe Executive Chairman African Rainbow Mineras Srinivasan Venkatakrishnan AngoGod Ashanti Iván Arriagada Antofagasta Mineras Phiippe Knoche Areva Kevin Dushnisky Co-President Barrick Andrew Mackenzie BHP Biiton Neson Pizarro President and Codeco Richard Adkerson President and Freeport-McMoRan Ivan Gasenberg Gencore Chuck Jeannes President and Godcorp Nick Hoand God Fieds Svein Richard Brandtzæg President and Hydro Shigeru Oi JX Nippon Mining & Metas Ben Magara Lonmin Hiroshi Yao President Mitsubishi Materias Gary J Godberg President and Newmont Sam Wash Rio Tinto Yoshiaki Nakazato President Sumitomo Meta Mining Member associations Austraia-Africa Mining Industry Group Cámara Asomineros Andi Coombia Casi Institute Chamber of Mines of South Africa Chamber of Mines of the Phiippines Chamber of Mines of Zambia Cobat Deveopment Institute Consejo Minero de Chie Eurometaux Euromines Federation of Indian Minera Industries Ghana Chamber of Mines Instituto Brasieiro de Mineraça ~ o Instituto de Seguridad Minera Peru Internationa Auminium Institute Internationa Copper Association Internationa Iron Metaics Association Internationa Lead Association Internationa Manganese Institute Internationa Moybdenum Association Internationa Wrought Copper Counci Internationa Zinc Association ITRI Japan Mining Industry Association Mineras Counci of Austraia Mining Association of Canada Mining Industry Associations of Southern Africa Nationa Mining Association USA Nicke Institute Prospectors and Deveopers Association of Canada Sociedad Naciona de Minería Chie Sociedad Naciona de Minería, Petróeo y Energía Peru Word Coa Association Word God Counci Zircon Industry Association of mined nicke of mined god of mined zinc Source: SNL Metas & Mining, Stockhom, 05