air land water Primary Mining and Smelting Division 2002 Annual Report to our Community

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1 air land Primary Mining and Smelting Division 2002 Annual Report to our Community water

2 From left to right: Bill Mount, General Manager, SEMO Mining and Milling Division; Bruce Neil, General Manager, Glover Smelting Division; Clif Gray, Vice President of Primary Smelting and General Manager of Herculaneum Smelting Division We ve combined our reports this year to include all of our primary operations so that we can share a full picture of our mining, milling, smelting and refining operations throughout the state of Missouri. Message to our Communities On behalf of the more than 975 employees of the Doe Run primary mining and smelting divisions, we are pleased to present the Annual Report to Our Communities We ve combined our reports this year to include all of our primary operations so that we can share a full picture of our mining, milling, smelting and refining operations throughout the state of Missouri. A few selected highlights from the operations follow here, but please read the full report for all the news from throughout Doe Run s Primary Business Unit. Our society requires lead in our everyday lives for many essential items, such as car batteries; protective equipment for radiation and cancer treatment; and computer and television screens. This is what fuels our ambition as Doe Run continues to provide this vital metal to America and the world. As an active member of our communities, we know it is important to provide the lead in the cleanest and safest manner possible in order to keep our communities and operations clean and safe. You can see by our commitment and progress over the past year, Doe Run is determined to make that happen in all communities we serve.

3 There s no denying that 2002 has been a challenging year for the lead industry, with metals prices reaching an historic low. The Doe Run Company announced in late October the closing of its Revised Exchange Offer and Agreement, which reduced our outstanding debt by approximately 40 percent. The completion of this agreement was a tremendous success for Doe Run, our employees, our customers, our suppliers and the communities we serve. In addition to the financial restructuring, our employees were charged with scrutinizing costs and managing budgets at every level of the company. We have significantly reduced operating costs across the board and while we will remain financially conservative in 2003, these accomplishments cast a very hopeful light on our future. SEMO Mining and Milling Division faced tremendous hurdles in 2002 as that division had the difficult task of reducing the workforce and closing the SEMO Central Services Division. Fortunately, we were later able to recall some of these loyal employees to fill other posts. Ultimately, our final productivity increased by a critical 12 percent helping to stabilize the division and set the stage for its future. At our Glover Smelting Division the overall safety record improved dramatically. We celebrated our 24th consecutive quarter of compliance with the National Ambient Air Quality Standards (NAAQS), and continued to keep our community clean through the Adopt-A-Highway program and the Missouri Stream Team program. In Herculaneum we continued to address environmental and health concerns of residents. We appreciate the concern that has been shown in the Herculaneum community, as well as the efforts of the U.S. Environmental Protection Agency (EPA), Missouri Department of Natural Resources (MDNR), Missouri Department of Health and Senior Services and Jefferson County Department of Health in reaching a solution. We are committed to making it right in the Herculaneum community, evidenced by the progress we ve made on home and yard clean-ups, development and implementation of our transportation and materials handling plan, the completion of the $12 million package of pollution controls under the State Implementation Plan for lead, and the institution of the Property Purchase Program. We ve also increased our regular communication with the community through the Community Advisory Panel (CAP) and at the Community Advisory Group (CAG) meetings. We ve increased distribution of the monthly Neighbor Notes newsletter to more than 2,800 Herculaneum residents. In response to community input and in the spirit of open communication, Doe Run now provides regular updates on all financial and operational issues on our Web site: At all of our divisions, we pledge to stay focused on keeping our operations, our employees and our communities clean and safe while providing jobs and essential raw materials. Thank you for your continued support as we work to make tomorrow better than today. Yours truly, William H. Mount A. Bruce Neil Clifton Gray General Manager, SEMO Mining General Manager, Vice President of Primary Smelting and General and Milling Division Glover Smelting Division Manager of Herculaneum Smelting Division bmount@doerun.com bneil@doerun.com cgray@doerun.com Message to our Communities

4 SEMO Mining and Milling Division Economic Ore Reserves Tons (in millions) Toreen LaRue LAB TECHNICIAN, 5 YEARS OF SERVICE Toreen LaRue sets a strong example for young people. Married with four children, Toreen serves as a junior high Sunday School teacher, a volunteer at Viburnum High School events, announces high school basketball games and is an active member of the Viburnum Community Beautification Committee. Internally, Toreen helps coordinate quarterly Lunch with the President meetings with SEMO s Communication Team, as well as the annual Coat Drive for Peru.

5 2 3 SEMO Mining and Milling Division 2002 Annual Report to our Community Who We Are The Doe Run Mining and Milling Division consists of 582 dedicated and skilled employees responsible for locating and extracting more than 383,000 tons of lead concentrate ore in We are known for our hard work and resourcefulness during trying times, and are proud of the work we do. Many of us have been with Doe Run for more than 25 years, and some of us come from families that have served our industry for three generations. We are committed to each other and to keeping one another and our communities viable and safe. The trend over the past several years has been one of declining ore reserve tonnages, and we expect this trend to continue unless we are able to substantially increase our exploration activities. We are currently mining more ore than we re finding, making the exploration process essential to our company s future and the supply of lead, a material used in everyday applications like television screens, computer monitors and car batteries. As shown on the previous graph, in 2002 we were able to increase the overall ore reserve, not by exploration, but by reducing our operating costs. Each of us is unique and each makes a difference to the company and community. Toreen LaRue is just one of many caring employees in the Mining and Milling Division. What We Do and How We Do It Most of our work takes place far below Earth s surface, some 1,000 feet beneath the forested, rolling hills of southern Missouri. This area, rich in mineral deposits, is known as the Viburnum Trend. Named for the nearby town of Viburnum, mining and milling has taken place here for more than 40 years. Today, approximately 70 percent of the United State s primary lead supply comes from our seven mines in Missouri, limiting our country s dependence on foreign sources. While best known for having high-purity lead ore, Doe Run also extracts zinc and copper minerals from its underground mines. SEMO Mining and Milling Division

6 Far from the image of men with picks and shovels, we are a company of men and women using the most modern technologies to locate, extract and mill the lead we all use in our daily lives. One thousand feet beneath the surface, we use heavy equipment, including 40-ton-capacity trucks, hydraulic-powered rock drills and eight-ton-capacity front-end loaders, each of which was carefully disassembled, lowered into the mines through one of our vertical circular shafts and reassembled. Ore is extracted by drilling and blasting in massive rooms up to 100 feet high. From there, ore is transported often several miles to the nearest hoisting shaft via our underground haulage roads. The ore is then crushed into six-inch pieces before being hoisted to the surface, and then further ground and processed at one of our four mills. During the process, the ore particles are mixed with water and a variety of chemical processes to encourage separation of the minerals from the remaining rock. The minerals are then collected and the lead concentrates are transported by truck in a damp, heavy, sand-like form to one of our two primary smelters Herculaneum and Glover. Zinc and copper concentrates are sold to other companies who recover those metals. The remaining material, called tailings, is collected through a specially engineered system of clarifying ponds and dams, which are permitted by the state of Missouri. Ninety percent of the metals (lead, zinc, copper, cadmium and arsenic) have been removed from these tailings. In 2002, the Mining and Milling Division extracted 5,032,000 tons of ore at an average rate of 32.6 tons per person shift. This represents a 12.5 percent productivity increase in per person tons over Perhaps the most significant achievement of 2002 has been our ability to drastically lower operating costs. Faced with record low lead prices and the far lower operating costs of mining companies abroad, the Mining and Milling Division faced the challenge of reducing its production cost by 18 percent or potentially close the operation. Other mining companies who operated at similar costs have either closed or are near bankruptcy. By making tough decisions that required us to eliminate 15 percent of our salaried staff and by working hard to increase productivity, we were able to meet this challenge and achieve the objective by August and through the remainder of the year. In addition to reaching our operating cost goals, the Mining and Milling Division invested in new programs and facilities to prevent tracking of lead concentrate outside our property. We have added checkpoints on our private roads, as well as public roads, to further measure the effectiveness of the program. Working Safely and in Good Health In 2002, the Mining and Milling Division developed a new program designed to promote safety in the workplace and reward employees for their personal commitment to safety and good health. The program provides employees with a paid day off (personal safety day) for each four-month period they work without a work-related injury resulting in time off or damage to work equipment. Results have been very positive. In 2002, there were.98 lost-time incidents per 200,000 hours worked at our mines and mills. This represents a decrease of nearly 60 percent over In addition, SEMO s Sweetwater mine and Viburnum s No. 28 mine are in contention to receive a Sentinel of Safety award, the highest industry recognition reserved for the safest U.S. underground mining facilities. Doe Run and its acquired properties have received 14 Sentinel awards at various locations.

7 Concern For Our Environment We live, work, play and raise our families in and around the many communities in which our mines are operated, so we are vitally concerned about our environment. 4 5 Air In 2002, we received the new Title V Air Operating Permit for all mines except the Buick mine, which is pending approval. In June, we received a Notice of Violation for dust blowing off our Fletcher mine tailings field. To address this issue, we are alternating the discharge point of the tailings slurry, installing a pumped sprinkler system to wet areas that won t be covered with new tailings, and planting a line of trees to act as a windbreak and visual barrier between the tailings field and the public highway which borders the tailings area. We expect all improvements to be complete by early Land Our environmental stewardship includes forest management, exploratory drilling, tailings recovery and storage, and the closure and remediation of inactive mine properties. Our company owns thousands of forested acres on or near our operation sites. We firmly believe in multiple uses of these lands and are careful to maintain the health of the forests through selective harvesting of timber and reforestation under the management of a professional forester. We planted roughly 25,000 pine trees in calendar year 2002, as replacement for selectively harvested timber on our land. Land Mine Reclamation The Missouri Metallic Minerals Waste Management Act provides regulatory oversight for mine waste. As our mines approach closure, we take steps to restore those sites for natural uses. Many of these sites have potential to become wildlife habitat. We have successfully converted the site of a 200-plus-acre tailings pond and mine, known as Indian Creek, to a hunting preserve for deer, turkey and other animals. Vegetation is growing well, indicating that prior remediation efforts have worked. Perhaps the largest portion of our ongoing environmental work in the Mining and Milling Division revolves around proper storage of tailings. Tailings are the remaining waste rock after the mineral has been removed from the milling process. These sand-like particles have only trace amounts of metals in them often less than 0.2 percent by weight. Tailings are collected from the watery slurry used in the milling process in a variety of engineered clarification ponds and dams. The water discharged from these sites is carefully monitored to meet state and federal laws. Restoration of tailing storage areas involves covering dams to prevent erosion, applying fertilizer and planting grasses, shrubs or trees. In many cases this erosion control work begins long before a site is closed. In 2002, we prepared for the closure of the Viburnum Mill and No. 28 mine. Work included seeding 300 acres and providing irrigation to encourage growth. Additional irrigation is planned in 2003 with final closure scheduled to begin in April SEMO Mining and Milling Division

8 SEMO Mining and Milling Division Summary of Water Quality Data for 2002 Allowable Limits Maintaining Water Quality The Mining and Milling Division carefully monitors all its discharges to ensure they are well within regulatory standards, such as National Pollutant Discharge Elimination System (NPDES) limitations. We are pleased to be in full compliance with all federal and state regulations. Avg. mg/l total recoverable metals in discharge Buick West Fork Sweetwater Zinc Lead Copper Cadmium Lead Zinc Copper Cadmium SEMO Mining and Milling Division Summary of Water Quality Data for 2002 Allowable Limits Zinc Avg. mg/l total recoverable metals in discharge Brushy Creek Fletcher Viburnum #35 Viburnum #29 Viburnum #28 Lead Copper Cadmium Lead Zinc Copper Cadmium

9 Land Exploration Exploration for additional mining reserves is critical to extending current mining operations and producing the lead necessary for everyday life. The Mining and Milling Division routinely conducts exploration drilling with as little environmental disruption as possible. Exploration drilling is completed using small diameter holes from the surface. After the core is extracted and examined by geologists to determine its mineral production potential, the holes are plugged with cement to ensure protection of groundwater. Once completed, the 1/4-acre drilling site required for each drill hole is re-planted and naturally recovers within a few seasons. This process has been taking place for more than 50 years. Doe Run currently has seven prospecting permits pending to allow additional exploration in the Mark Twain National Forest, near our existing mining operations. Doe Run expects approval of the permits in early The process of applying and receiving prospecting permits from the various government agencies in a timely manner is critical to our business. Only a small percentage of exploration permits result in actual mining operations. Of the 12 permits granted Doe Run in the past 10 years, none have resulted in an application for mining. Only if significant accumulations of minerals are found does the company consider the rigorous application process defined by federal regulations to apply for a mining permit. 6 7 Water Maintaining discharge water quality is an important aspect of our mining and milling activities. We carefully monitor all discharges to ensure they are well within regulatory standards. In 2002, the Division requested and received a new discharge permit for the Fletcher operation, which contained substantially lower limits for heavy metals and much more stringent tests for toxicity to aquatic life. We are pleased to be in full compliance with all federal and state regulations. Permits for the Casteel Mine and Brushy Creek Mine water discharges are pending. Concern For Our Community The men and women of the Division are committed to the communities surrounding our seven mines and four mills. Many of our employees have spent their entire careers working for Doe Run or its predecessors, and some employees have parents and grandparents who also worked in mining. Each year, the community of Viburnum celebrates this history with Old Miners Day. Doe Run assists in the execution, finances and logistics of the event. This year we provided public underground tours to more than 270 people and hosted legislators, civic and community leaders, and the media in our mines and mills. In 2002, we also helped conduct a Minerals Education Workshop sponsored by the Missouri Minerals Education Foundation (MMEF) designed for elementary and secondary teachers. In addition to the workshop, Dawn Girard of our Division, along with Glover employees Angie Nations and Sandy Phelps, formed a musical trio to help educate students, teachers and residents about rocks and minerals. Using songs produced by the National Energy Foundation, the women perform at schools, teacher workshops and conferences. In order to further the future of our industry, the Mining and Milling Division sponsors annual scholarships to the Occupational Division of the Mineral Area College and to the University of Missouri-Rolla. SEMO Mining and Milling Division

10 Byron Inman MOULDING CREW, 22 YEARS OF EXPERIENCE Byron has worked in virtually every corner of the Glover facility and serves on the plant safety committee. Ask about his fondest moments and he ll mention time with his wife, four children and babysitting for one-year-old grandson, Steven. Known as an asset to both the community and Doe Run, Byron has spent nearly 20 years at high school sporting events, and serves as school board president for the Arcadia Valley School District.

11 8 9 Glover Smelting Division 2002 Annual Report to our Community Who We Are Doe Run s Glover Smelting Division consists of dedicated, skilled individuals with a collective desire to succeed. We care about our families, our community and our livelihood the smelting and refining of lead. We have supported one another during what has been a tough year for the metals market, and this support has enabled the division to improve safety records and boost production levels while minimizing our impact on the environment. Byron Inman of the products department is one of the many Doe Run employees who contributes to our continued success, and is a great example of the 180 loyal employees of the division. What We Do and How We Do It The Glover Smelting Division, which celebrates its 35th anniversary in April 2003, receives and processes lead ore concentrate from the mines in southeastern Missouri, and produces refined lead for use in products such as batteries, television screens, lead crystal and other everyday items. We produce 21 different alloys at our facility, meeting various customer demands and always increasing our customer base. In 2002, the Glover smelter produced 134,834 tons of refined lead, up from 131,804 tons in During this time, Glover s cost to produce a pound of lead decreased by 8 percent and our environmental performance continued to provide excellent results. Glover Smelting Division

12 Ambient Air Quality In 2002, the Glover smelter marked its 24th consecutive quarter six years of continued ambient air attainment with the National Ambient Air Quality Standards (NAAQS) set by the U.S. Environmental Protection Agency. Glover Smelting Division Ambient Air Levels Quarterly Averages for 2002 Micrograms of lead per cubic meter of air Big Creek Post Office North Chloride 1st Q 2nd Q 3rd Q 4th Q 1st Q 2nd Q 3rd Q 4th Q 1st Q 2nd Q 3rd Q 4th Q 1st Q 2nd Q 3rd Q 4th Q

13 Assuring Quality In addition to increased production, the Glover Smelting Division continues to maintain its ISO 9002 and ISO quality system certifications. These internationally recognized designations are a testament to the quality of our production and environmental processes. Glover employees focus daily on making improvements that will make tomorrow better. Of note in 2002, a new robotic stacker was added to the lead casting equipment, improving our production efficiency and contributing to overall cost savings. As a result, customer satisfaction improved 30 percent in Working Safely and in Good Health The Glover Smelting Division employees share Doe Run s primary goal of no lost-time accidents and strive for the safest, most efficient processes and procedures. Glover s overall safety record improved in 2002: OSHA (Occupational Safety and Health Administration)-recordable incidents were reduced by 25 percent and the number of lost-time incidents was cut by more than 60 percent. We achieved 268,000 employee hours worked without a lost- time incident. Employee blood lead levels decreased 6 percent from 2001, to a record low level. In 2002, The Doe Run Company introduced a company-wide safety committee consisting of safety managers and general managers from all Missouri Doe Run facilities. The committee meets monthly and focuses on all safety-related issues within Doe Run, strengthening and improving facility safety programs. The heart of Glover s safety program is the plant s safety committee. Members, both hourly and salary employees, meet weekly, review all incidents and conduct regular safety inspections. Concern For Our Environment Protecting the quality of air, water and land in our community is a high priority. Several improvements were put into place in 2002 to further minimize the impact of our operation on the surrounding environment. For example, the lease of a new wet sweeper designed to work on wet pavement allowed us to step up our cleaning efforts during inclement weather. This sweeper, along with our existing dry vacuum road sweeper, allows us to keep plant roads and the perimeter of the facility clean. We also increased our sweeping schedule, adding a second shift five days a week. In addition, we completed paving and ditching projects on our property to help enhance sweeper performance and to improve storm water collection. Air In 2002, the Glover smelter marked its 24th consecutive quarter six years of continued ambient air attainment with the National Ambient Air Quality Standards (NAAQS) set by the U.S. Environmental Protection Agency. Not only did we continue attainment, but our ambient air levels also decreased, even during a year of increased production. The standard specifies a three-month average not to exceed 1.5 micrograms of lead per cubic meter of air. Glover Smelting Division

14 Land Slag is a by-product of smelting. It is a glassy, sand-like material containing approximately 26 percent iron, 12 percent silicon, 7 percent zinc, 11 percent calcium, 2 percent lead, less than 0.5 percent (or one half of 1 percent) copper, 0.02 percent (or two hundredths of 1 percent) cadmium, and 0.01 percent (or one hundredth of 1 percent) arsenic. These metals are encapsulated in the slag and therefore not easily absorbed by the human body. In 2002, 79,843 tons or 71 percent of the total slag produced was recycled into our production process. The remaining material is kept at our onsite storage facility. In June 2002, Doe Run received a Notice of Violation (N.O.V.) from the Land Reclamation Division of the Missouri Department of Natural Resources (MDNR) requesting information on the new slag storage area. The information was submitted to MDNR as requested to resolve the N.O.V. Water Water is needed for the plant processes. All of the process water is collected for re-use or sent to our on-site treatment facility, which removes 99.8 percent of all impurities and trace metals before being released to nearby Big Creek. The discharged water is regularly monitored and sampled by Doe Run and state and federal agencies to ensure that it meets federal water discharge requirements. All process water discharged from the water treatment facility in 2002 met these standards. Big Creek has been listed as a water quality impaired stream by MDNR. The former owner of this site, ASARCO Inc., has some remediation responsibilities that may improve this categorization. All storm water from our plant site, including the slag storage area, is captured and collected in an 11-million-gallon reservoir. The water is used in the plant process. Excess storm water is treated prior to its release into Big Creek. During the course of the year, there were several rainfall events that resulted in collection pond overflow. All incidents were reported to the state as required. While we meet current guidelines, we continue to look for ways to improve our facilities and reduce environmental impacts. Involvement In Our Community Glover Smelting Division employees are proud to be members of our community. We believe it s important to give our financial support, time and talents to local organizations. Comprised of approximately 20 employees, Glover s Impact Team is the driving force behind our outreach activities, coordinating volunteer teams for all of our community initiatives. Supporting the Local Economy In 2002, Glover paid $8,035, in salaries and wages and contributed $655, in property taxes (of which more than $418,000 went to local schools). Glover purchased supplies and services from Missouri businesses totaling $6,990,000.

15 Minerals Education Throughout the year, Glover Smelting Division employees were involved in a variety of community outreach activities, including tours of our facility. Glover employees were extremely active in Doe Run s Minerals Education program. Kindergartners through eighth graders experienced a variety of activities including Rock Music Trivia, Paste with a Taste, Minerals Identification, Rock Painting, Wonder of Crystals and Chocolate Chip Cookie Mining. The curriculum, which meets Missouri Assessment Program (MAP) standards for science, has become so successful that many teachers request repeat visits. We visited nearly a dozen schools in nine Missouri counties between September 2001 and May Glover also participated in the third annual Minerals Education Workshop sponsored by the Missouri Minerals Education Foundation. Coordinated by Glover s Angie Nations, the workshop provides information and resources for primary and middle school teachers about natural rocks and ore found in Missouri, how and what minerals are mined, and the value and uses of Missouri s minerals. Ten Doe Run employees participated in the workshop this year, with approximately 60 Missouri teachers attending. In addition to the workshop, Glover employees Angie Nations and Sandy Phelps, along with Dawn Girard of the SEMO Mining and Milling Division, have formed a musical trio called The Doe-Re-Mi s to help educate students, teachers and residents about rocks and minerals. Using educational rock and mineral songs produced by the National Energy Foundation, the three women perform at schools, teacher workshops and conferences and at county fairs to make minerals education a fun experience. To recognize student leadership and support the future workers of our industry, the Glover Smelting Division sponsors two annual scholarships for local high school students to attend the college of their choice and an annual scholarship to the University of Missouri-Rolla Keeping our Community Clean Glover employees are members of the Adopt-A-Highway for a two-mile stretch on Highways 21 and 49, and Missouri Stream Team 533 the only Stream Team that has adopted any portion of Big Creek. In April we celebrated Arbor Day by inviting two groups of our neighboring fifth graders (Arcadia Valley and South Iron) to plant trees. Participating students were given a t-shirt that proclaimed I planted a tree, be proud of me. Christmas Activities In December, Glover employees entered a float in the Arcadia Valley Christmas Parade for the first time, and the division teamed up for the second year with the Iron County Division of Family Services to bring Christmas gifts and holiday cheer to area children through the Christmas Wish sponsorship program. Glover Smelting Division

16 Levi Carter CONSTRUCTION SUPERVISOR, 28 YEARS OF SERVICE Levi Carter lives his motto, Make It Safe, with 28 years of no lost-time incidents. A friendly man with a dry humor, Levi served twice in Vietnam. I actually had a break in service until they needed machine operators. Then the Army sent me again, he says. Levi enjoys fishing and holds a personal best in bowling of only 299. Levi and Pearl have been married 28 years. Their two sons serve in the U.S. military.

17 14 15 Herculaneum Smelting Division 2002 Annual Report to our Community Who We Are In 2002, we have become even more involved, open and dedicated to the well-being of the Herculaneum community. We ve heard your concerns, appreciated your feedback and are grateful for your ongoing patience and support as we continue to make things right in the community. We are real people doing real jobs. Our work is needed to provide the world with essential raw materials for items that we use in everyday life. We do everything we can to contribute to division-wide improvement projects, while maintaining a commitment to excellence in our individual jobs. Levi Carter is one loyal team member who strives to fulfill our mission of making things right in the community. What We Do and How We Do It The Herculaneum Smelting Division operates a continuous lead smelter that produces lead and by-products from lead ore concentrate from the company s Southeast Missouri Mining and Milling Division. Our products are used in everyday applications such as computer screens, car batteries, electrical appliances, protective equipment, back-up power sources and many other specialties. We produced more than 150,000 tons of primary lead this year. This year we reorganized the entire facility from the plant employees to management which has helped us set more accurate goals, meet our production and operating targets, and manage our costs more efficiently. This also allowed our employees to make more timely decisions in operations, an important contribution to this past year s environmental success. Herculaneum Smelting Division

18 Herculaneum Smelting Division Ambient Air Leads Quarterly Averages for 2002 Micrograms of lead per cubic meter of air Bluff 1st Q 2nd Q 3rd Q 4th Q Sherman 1st Q 2nd Q 3rd Q 4th Q 1st Q 2nd Q 3rd Q 4th Q Broad Street Ambient Air Quality Since the completion of the SIP in July 2002, the smelter has attained and continues to maintain the National Ambient Air Quality Standard (NAAQS). This places the smelter under U.S. Environmental Protection Agency (EPA)- specified air quality standard. The standard specifies a three-month average not to exceed 1.5 micrograms of lead per cubic meter of air. Herculaneum Smelting Division Ambient Air Leads Quarterly Averages for 2002 Micrograms of lead per cubic meter of air Ursuline 1st Q 2nd Q 3rd Q 4th Q Golf Course 1st Q 2nd Q 3rd Q 4th Q High School 1st Q 2nd Q 3rd Q 4th Q North Station 1st Q 2nd Q 3rd Q 4th Q

19 Assuring Quality Our employees ongoing commitment to safety, quality and cleanliness is demonstrated in our overall performance in The recent reorganization and reassignment of responsibilities, employee input and procedure improvements led to a 15 percent reduction in operating costs and a remarkable 50 percent increase in customer satisfaction. In 2002, the Missouri Department of Natural Resources (MDNR) completed more than a dozen unannounced visits to the Herculaneum smelter during night-time and weekend hours. We re happy to report that as a result of these surprise inspections, the agencies identified no issues or concerns. Lastly, the Herculaneum smelter continues to maintain ISO 9002 certification for production quality Working Safely and in Good Health The Herculaneum Smelting Division employees share The Doe Run Company s commitment to safety. In 2002, the Herculaneum smelter reached 500,000 employee-hours without a lost-time incident, a 70 percent improvement over the year prior. A few key initiatives can be credited, including employee suggestions and input, new equipment and capital improvements and recommendations from the newly formed, company-wide review process. We also celebrated when we marked 110 days accident-free, a division record for the longest time without an OSHA (Occupational Safety and Health Administration)-recordable incident. We rewarded our employees efforts with a special lunch, t-shirts, gift certificates and door prizes. In 2002, smelter employees reached the lowest blood lead levels in the history of the division, a 6 percent improvement over the previous year. Concern For Our Environment Like the individuals who live, work and raise families in Herculaneum and surrounding communities, we are concerned about keeping the area clean and safe. Doe Run has made significant efforts to remain an environmentally sound member of the Herculaneum community, and the events of 2002 reflect this commitment. Air The Herculaneum Smelting Division made tremendous progress in the reduction of air emissions in The most significant accomplishment was the on-time, successful completion of a $12 million package of controls specified under the MDNR State Implementation Plan (SIP) for lead. The goal of this investment is simple keep our community and the smelter clean and safe, while producing the best-quality products. The SIP improvements included the installation of new baghouse systems (a state-of-the-art air filter system designed specifically to reduce air emissions) and building enclosures. Since the completion of the SIP in July 2002, the smelter has attained and continues to maintain the National Ambient Air Quality Standard (NAAQS). This places the smelter within U.S. Environmental Protection Agency (EPA)-specified air quality standards of 1.5 micrograms of lead per cubic meter of air or less (averaged over a three-month period). The Broad Street monitor, the closest air station to the smelter, showed an 80 percent improvement over Herculaneum Smelting Division

20 Analysis of the seven air monitors is ongoing, and data for all Herculaneum air monitoring stations is reported on our Web site, as well as in the monthly publication Neighbor Notes. Although the EPA standard is a quarterly average, we regularly report our quarter-to-date numbers. Land Slag is a by-product of smelting. It is a glassy, sand-like material containing approximately 24 percent iron, 12 percent silicon, 7 percent zinc, 10 percent calcium, 2 percent lead, less than 0.5 percent (or one-half of 1 percent) copper, percent (less than one hundredth of 1 percent) cadmium, and percent (less than one hundredth of 1 percent) arsenic. These metals are encapsulated in the slag and therefore not easily absorbed by the human body. We recycle approximately two-thirds of the slag we produce back into our production processes, and the remaining material is stored on private property owned by Doe Run. In 2001, Doe Run submitted a proposal for improved management of the slag storage area. This plan, outlined in last year s report to the community, is still being reviewed by MDNR and EPA. Transportation and Material Handling Plan As many of you remember, we announced in June that the EPA approved the company s transportation and material handling plan, which outlined specific steps to minimize fugitive emissions and the tracking of lead outside of the smelter. As a result, officials removed the street signs in the city warning of high lead levels along the haul roads terrific news for the community. Key components of our transportation and material handling plan include significantly reducing incoming and outgoing vehicular traffic throughout the plant, and cleaning vehicles, when appropriate, to minimize tracking of materials outside the plant. Doe Run also proposed to the city and MDNR three alternative haul routes for all smelter traffic in and out of Herculaneum. All of the options would provide for a single route for smelter traffic and would reduce the impact of transportation on city residents. After a public meeting, the city and the state agencies decided to maintain the existing traffic pattern for the present time. In May, Doe Run released to the public a Haul Road Risk Assessment study by Dr. Teresa Bowers, a nationally recognized lead health risk expert. The study concluded that current levels of lead concentrate on haul roads in the city do not pose a significant health risk. This conclusion was based on the low human absorption rate of lead from lead concentrate. Doe Run continues rigorous street sweeping, sampling and roadside soil remediation throughout Herculaneum. Water Water is needed during the smelting process and for cooling. For our facility, water is pumped from a well beneath the Mississippi River, used in the smelter, then sent to our on-site treatment facility to remove all impurities and trace metals. It is then returned to the river, cleaner than it was originally. The discharged water is regularly monitored and sampled by both Doe Run and state and federal agencies to ensure that it meets federal water standards.

21 Additionally, the groundwater beneath the slag pile is sampled and reported regularly to MDNR and has not shown a problem. The city wells, which lie deep below the town, are also tested and have not shown contamination from the smelter. The storm water runoff is an issue. Its management will be modified under existing agreements with the state and federal agencies Concern For Our Community As we ve communicated over the past year, we want to be a good neighbor and prosper along with the residents of Herculaneum. We have a long history of acting responsibly in this community, and our efforts in 2002 demonstrate that we are serious about doing so for years to come. Doe Run continues to be involved in the community, through good-neighbor programs, road improvements, taxes to the city and school district, and use of local vendors and services. In 2002, we paid $10,732,617 in wages and salaries, donated $7,000 to local organizations, paid $834, in local property taxes and spent $18,426,500 with Missouri-based suppliers and service providers. Communication is the first step in making a difference. In Spring 2002, we initiated monthly, information-sharing meetings among all regulatory agencies, Doe Run management and city officials. We continue to cooperate with and respond to Herculaneum s community groups to address community concerns as they arise. We regularly provide the panel and the community with company information through the monthly newsletter Neighbor Notes and online. Residents feedback is also welcome via at contact@doerun.com or by calling (636) 479-LEAD. Community Health In February 2002, at the request of the Dunklin R-5 School District, which includes Herculaneum, the Jefferson County Health Department completed a blood lead study of approximately 800 children within the district. The results showed that only five of the children tested had elevated blood lead levels. A screening conducted by the Missouri Department of Health and Senior Services in September 2002 found that none of those tested had elevated blood lead levels. Voluntary Property Purchase Plan The voluntary property purchase plan introduced in April progressed smoothly throughout the year. We offered eligible residents fair market value for their homes if they wished to move. As of December 31, 21 homes with children requested appraisals under the program and 10 properties have closed. Residents have until December 2004 to accept an offer. Doe Run will offer to purchase 134 homes in 2003 and Prioritization for the second phase of the plan will be announced in early 2003, and the community will be notified as soon as possible. Herculaneum Smelting Division

22 Soil and Lawn Replacement Program From January to December, Doe Run replaced or remediated 135 yards, five public properties and completed 75 interior home cleanings. Crews worked through December to finish the last of the soil replacements. Under the Administrative Order on Consent (AOC), Doe Run will replace soil at 60 residences in Other Lead Reduction Efforts Doe Run also: Began replacing soil in the right-of-way along haul roads in the community; Minimized the tracking of lead dust from vehicles hauling lead concentrate by paving within the smelter area, paving a road outside the smelter, installing a special truck unloading facility and instituting a truck washing procedure for lead concentrate trucks leaving the facility; Cleaned the interior of four area churches; and Provided free High Efficiency Particulate Arresting (HEPA) vacuum cleaners for more than 400 residences near the smelter. Supporting Area Students In the spring, the Herculaneum smelter donated labor and supplies to improve the Tri-City Little League concession area and give the complex a facelift. Because hygiene is a critical part of overall health, Doe Run created a wash area at the concession stand. We donated sinks and faucets, rerouted a drain line on the exterior of the concession stand and extended the roof to cover the new wash area. We also provided clean soil to level and maintain the community baseball facility and provided an entrance sign for Senn-Thomas Middle School. The Herculaneum Smelting Division was the proud sponsor of the 5th Annual Doe Run Black and Red Classic, a high school basketball tournament that brought together five area high schools. The company also saved the Dunklin R-5 School District in Herculaneum $30,000 by housing the district s wireless transmitting equipment needed to upgrade its wireless Intranet system. To commend student leadership and support future industry workers, the Herculaneum Smelting Division sponsors two annual scholarships to Jefferson College and an annual scholarship to the University of Missouri-Rolla. Smelter Open House In December, we welcomed more than 80 members of the Herculaneum community to an Open House. Guests were treated to a guided presentation of the smelter s daily activities, viewing samples of lead materials before they are developed into a usable substance. A display on safety apparel and equipment showed the guests how committed the employees are to safety. Attendees also saw a real-time demonstration of workers managing the blast furnace. A comprehensive plant tour will be held in Spring 2003 for those interested in learning more about the smelter.

23 SEMO Toxic Release Inventory Data Amounts Reported for 2001 (in pounds) Materials Buick Brushy Creek Fletcher Sweetwater Totals Cobalt 334, ,370 Copper 1,535,362 1,364, , ,589 3,990,168 Lead 7,407,225 5,528,744 7,609,301 1,768,589 22,313,859 Nickel 435, ,890 Zinc 3,865,890 5,904,952 3,386,257 1,703,685 14,860,784 Totals 13,578,737 12,798,382 11,700,089 3,857,863 41,935,071 Glover Toxic Release Inventory Data Amounts Reported for 2001 (in pounds) Materials Air Land Water Totals Aluminum 2,222 1,198,700 1,200,922 Antimony 28 12, ,181 Arsenic 12 5, ,531 Cadmium , ,366 Cobalt , ,320 Copper , ,846 Lead 30,625 2,917, ,948,386 Nickel 27 20, ,385 Silver Zinc 6,175 4,894, ,900,401 Totals 40,114 9,396, ,436,734 Herculaneum Toxic Release Inventory Data Amounts Reported for 2001 (in pounds) Materials Air Land Water Totals Aluminum 273 2,058,087 2,058,360 Antimony ,656 Arsenic 1,245 2, ,293 Cadmium 4,024 9, ,484 Cobalt , ,848 Copper 4, , ,737 Lead 226,513 2,433, ,659,758 Nickel , ,178 Sulfuric Acid ,576 66,911 Zinc 22,640 10,284, ,307,091 Totals 261,170 15,187,346 66,800 15,515,316 Toxic Release Inventory Data

24 Doe Run Headquarters 1801 Park 270 Drive St. Louis, MO SEMO Mining and Milling Division P.O. Box 500 Viburnum, MO Glover Smelting Division Route 1, Box 60 Annapolis, MO Herculaneum Smelting Division 881 Main Street Herculaneum, MO