Iluka Game Plan - Sustainability

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1 Iluka Sustainability Meetings with Governance Advisers Rob Porter, General Manager Investor and External Relations Rod Jones, Manager, External Relations 30 October 2014

2 Iluka Game Plan - Sustainability Iluka believes targeting high levels of performance and pursuing leading practice in the areas of environment, health and safety reflects the values of Commitment, Integrity and Responsibility Approach to environment and stakeholder management refereed to as proactivity encourages employees to operate beyond the minimum legal compliance and company policy levels where practicable to do so. 2

3 Sustainability Framework Game Plan, Corporate Plan Proactivity, licence to operate Governance and Risk SUSTAINABILITY Environment Heath and Safety People Corporate Social Responsibility Internal compliance Reporting and communications 3

4 Iluka EHS Management System Environment, Health & Safety Management System comprises of the following key areas: Environment conducting activities such that adverse impacts on existing and potential environmental values are minimised. This includes effective plans for the cessation of operations and rehabilitation of disturbed areas and the efficient use of resources, in particular energy, water and land; Health identifying, assessing and monitoring health hazards; Safety managing personal and process safety risks associated with our operations; and Community engaging communities and ensuring their views form part of decision-making process. 4

5 Iluka EHS Management System 5

6 Iluka Range of Policies 6

7 Iluka Group Standards 7

8 Iluka Measurement and Performance Objectives and targets are set and processes for measuring performance against targets established. Lead and lag indicators based on both qualitative and quantitative data are considered when establishing objectives and targets. Quality assurance processes used to ensure performance related data are complete, comparable, representative, collected by defensible methods, and accurate and precise. The inclusion of sustainability performance measures in annual company and site performance targets, and in individual performance agreements CEO Short Term Incentive measured against targets for group TRIFR (9.5), group severity rate (35.3) and group level 3 (and above) environmental incidents (53) were assessed. Management STIP 10% weighting for sustainability measures (TRIFR, Severity Rate, Level 3 and above environmental incidents) Monthly Executive and Board Sustainability Report 8

9 Frequency Rate Health and Safety Recent Focus Area Safety Production Leadership Program initiated in April 2011 Development of safe production plans (SPP) Establishment and delivery of leadership skills packages Performance is monitored by tracking on a monthly basis current indicators such as safety visits, planned workplace inspections, near-hits, and lag indicators such as lost time injury frequency rate (LTIFR), medical treatment injury frequency rate (MTIFR), total recordable injury frequency rate (TRIFR) and severity rate Lost Time Injury Frequency Rate (LTIFR) Total Recordable Injury Frequency Rate (TRIFR) Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 9

10 Land Rehabilitation Major areas of environmental management focus Extensive track record and internal expertise in rehabilitation and land management 30 year + track record ha rehabilitated vs 572 ha disturbed 10

11 Jacinth-Ambrosia Land Rehabilitation Cell 1 West (in 2013) The Cell 1 Trial Cell 1 West (2014) rehab just completed Cell 1 East ( in 2013) Cell 1 East (2014) 11

12 Rehabilitation Research Partnership with Australian Research Council (ARC) and University of Adelaide: water and roots in soils in arid lands inform best practice in reconstructing soils and vegetation Other priority areas salinity migration soil management root mapping bullock bush growth trials Dr Emma Steggles (UofA), Dr Melanie Schneemilch (UQ), Angela Chilton (UNSW) and Con Miller (Iluka) collecting soil samples at Jacinth-Ambrosia for the UQ BSC project. Sap flow meters and deep root species identification, ARC grant. 12

13 Western Australia - Land Rehabilitation Rehabilitation at Tiger Gully River, Yoganup 13

14 Land Rehabilitation Murray Basin Rehabilitation of former mine site at Douglas, Victoria Dec 2005 Pre-mining Feb Topsoil stripping July Sheep grazing pasture Feb Overburden backfill 14

15 US Virginia Land Rehabilitation ~1,600 acres of reclamation completed over the life of Virginia Operations ~2,000 acres of disturbed open area requiring rehabilitation Long term partnership with Virginia Tech, with annual funding provided focus on improving rehabilitation methods to improve cropping productivity 90 acre research farm established in 2004 pine reforestation study topsoil study 15

16 Biodiversity Partnership with University of Western Australia to research and restore areas of kwongan heathland near Eneabba in the Mid West of Western Australia, at one of Iluka's mining and processing operations Link Sponsorship of the Chair in Vegetation Science and Biogeography at UWA's School of Plant Biology enable scientifically based information and studies to be conducted independently research fundamental to rehabilitation activities at Eneabba and sustainability of kwongan heath Winthrop Professor Ladislav Mucina focus on descriptive vegetation science, ecological and evolutionary assembly in plant communities conservation and restoration of biodiversity in species-rich shrub-lands around the world Key areas of research and objectives: 1. Formation of protocols, guidelines, and methodology of vegetation surveys and mapping 2. Environmental filters important to vegetation assembly 3. Vegetation recovery after disturbance 4. Improvements in the long-term conservation prospects of endangered and rare plant species 5. Improve long-term planning for the conservation of plant species 16

17 Diversity Policy Diversity a major focus gender, age, disability and indigenous participation Policy statement - To achieve this Iluka will: promote awareness of diversity within Iluka; integrate workplace diversity principles into company activities; support skills development, aligned to the needs of Iluka, in communities in which Iluka operates; attract, develop and retain more employees across various age ranges, people with a disability, women and indigenous people; and create a flexible workplace culture which assists employees to balance their responsibilities. Diversity Committee established Chaired by the Managing Director, meets quarterly to discuss me the benefits of diversity; communicate and share diversity ideas and issues. Diversity targets vis vis female participation and indigenous employment set; soft targets on employment of people with disabilities 17

18 Workforce Development and Diversity Jacinth-Ambrosia Operation - One Operational Example Total workforce 156 (Iluka 67, contractors 89) 20% Far West Coast indigenous employment target (reached and exceeded) Strong indigenous and local components. Gender diversity remains a challenge Efforts recognized by 2013 SA Premier s Award for Social Inclusion 18

19 Total direct and indirect contribution to employment Total direct and indirect contribution to employment Total direct and indirect contribution to employment Socio-Economic Contribution Australia Commentary Australia (nationally) In 2013, Iluka s activities contributed to generating 4,346 jobs across Australia, an estimated $994 million to GDP and approximately three quarters of a million dollars in direct social contribution via donations and sponsorships. Victoria In 2013, Iluka directly employed 372 people and indirectly contributed to the employment of a further 1,242 people. Western Australia In 2013, Iluka directly employed 513 people and indirectly contributed to the employment of a further 1,376 people. South Australia In 2013, Iluka directly employed 197 people and indirectly contributed to the employment of a further 646 people. 2,000 1,750 1,500 1,250 1, Carnamah Geraldton South West Perth Western Australia (total) 1, Ceduna West Coast Greater Adelaide South Australia (total) 2,000 1,750 1,500 1,250 1, Glenelg region Wimmera region Mildura region Melbourne Victoria (total) 0 19

20 A$000 Socio-Economic Contribution United States Employment impact Value add impact Commentary 1, US multiplier Direct impact Australian Multiplier Indirect impact Note: The indirect contribution is based on the Australian value add multiplier, as no value add multiplier is available for the US Breakdown of contractors and staff Construction services 8 Non ferrous metal ore mining (other) 5 Transport 8 40,000 30,000 20,000 10,000 Other 1 0 US Direct impact Indirect impact Iluka s activities contributed to a total of between 632 and 858 jobs, and $35m in value added For the US: In 2013, Iluka directly employed 226 people and indirectly contributed to the employment of between 406 and 632 people (depending on the multiplier used) Iluka directly contributed $13.5 m to the US economy, and a further $22.1m in indirect value add (using Australian value-add multiplier). Iluka s activities in the United States are centred around two mine sites (Concord and Brink), a mineral separation plant at Stony Creek, and two projects (Hickory and Aurelian Springs). These activities are mostly located in Virginia, with Aurelian Springs located in North Carolina. Employment outputs for US operations cross between Virginia and North Carolina. Iluka s contribution to employment at a state level is modest; Iluka s total activities account for 0.028% of total employment in Virginia (858 total direct and indirect employment as a proportion of total state private non farm employment of 3,089,241) or alternatively 0.026% of total employment in North Carolina (858 total direct and indirect employment as a proportion of 3,352,151 total state private non farm employment). 1 Non ferrous metal ore mining (Phillingane staff) 45 Non ferrous metal ore mining (Iluka staff) Total employment using the US multiplier has been used in the calculation, while total state private nonfarm employment excludes agriculture, non-profit organisations, government and private household employment. This data has been sourced from the United States Census Bureau. 20

21 Value add ($ Millions) No of jobs Socio-Economic Contribution Victorian Regional Contribution Iluka s operations in Murray Basin: Iluka Resources: 166 employees Hamilton: 93 employees Ouyen: 69 employees Melbourne: 4 employees Watpac: ~92 jobs Kalari Transport : ~83 jobs Total direct employment: 372 jobs Economic data for all of Victoria: 372 jobs and $124.6 million in value add to region flow on to Victoria includes an additional 1,242 jobs and $175.8 million value add Murray Basin (& Greater Melbourne) regions 1,800 1,600 1,400 1,200 1, Direct and Indirect Employment Glenelg region Wimmera region Mildura region Victoria Direct effect Industrial effect Consumption effect Direct and Indirect Value Add $300.5m $94.4m $66.2m $4.3m Glenelg region Wimmera region Mildura region Victoria Direct effect Industrial effect Consumption effect 21

22 Iluka New Country Entry New country entry process outlines the steps taken to ensure risks are identified and mitigated whilst considering and planning undertaking opportunities in new jurisdictions. The process was finalised in June 2014 and is being trialled for 6 months. Final review of the documentation will be undertaken in December Iluka currently at an early stage level in higher risk jurisdictions: Sri Lanka scoping study and determination of regulatory setting Brazil project study in association with Vale Dubai (UAE) - marketing office Supporting documentation and processes: New country entry procedure New country entry risk assessment Anti bribery and corruption policy Further standards and policy development as required (e.g. human rights, child labour etc.) 22

23 Corporate Social Responsibility Review Banarra commissioned early 2014 to review Iluka s sustainability performance and reporting system based assessment against International Council for Mining and Metals ten sustainable development principles Main conclusions - Iluka robust sustainability framework for existing exploration, project and operational activities identification of key areas to ensure alignment with increasing expectations; new jurisdictions - human rights, products stewardship, stakeholder engagement, community development Enhanced approach to governance and sustainability reporting / communication determined cross functional involvement, Head of Sustainability, GM Human Resources, GM Investor Relations 23

24 Sustainability Reporting and Communication Key elements include: alignment of reporting with International Council for Mining and Metals 10 Sustainability Principles progressive and selective reporting against Global Reporting Index (GRI) criteria This approach will be reflected in 2014 Annual Report more substantive sustainability section of the website Other steps to include: communication of substantive initiatives and outcomes (e.g. biodiversity work associated with UWA and other academic institutions) sustainability information into key information for shareholders, customers, govt/regulators 24

25 ICMM Sustainable Development Principles ICMM 10 Sustainable Development Principles 1 Implement and maintain ethical business practices and sound systems of corporate governance. 2 Integrate sustainable development considerations within the corporate decision-making process. 3 Uphold fundamental human rights and respect cultures, customs and values in dealings with employees and others who are affected by our activities. 4 Implement risk management strategies based on valid data and sound science. 5 Seek continual improvement of our health and safety performance. 6 Seek continual improvement of our environmental performance. 7 Contribute to conservation of biodiversity and integrated approaches to land use planning. 8 Facilitate and encourage responsible product design, use, re-use, recycling and disposal of our products. 9 Contribute to the social, economic and institutional development of the communities in which we operate. 10 Implement effective and transparent engagement, communication and independently verified reporting arrangements with our stakeholders. 25

26 Iluka Resources Limited iluka.com.au For more information, contact: Dr Robert Porter, General Manager Investor and External Relations T: M: +61 (0)