2013 SUSTAINABILITY REPORT SUMMARY FOCUSED ALIGNED DISCIPLINED

Transcription

1 SUSTAINABILITY REPORT SUMMARY FOCUSED ALIGNED DISCIPLINED

2 INTRODUCTION Cliffs Natural Resources is proud to share our Sustainability Report, titled Focused, Aligned, and Disciplined. Within the report, you ll find a comprehensive overview of projects and initiatives undertaken in that demonstrate our commitment to responsible and sustainable business practices. As we reflect on the previous year, we do so with a clear understanding that embedding sustainability into everything we do is a journey rather than a destination. This allows us to operate within ever-changing regulatory landscapes, increase business efficiencies, reduce our impact on the environment and improve the way we connect with our stakeholders. We have always conducted our business in a manner that goes above and beyond our regulatory obligations. For more than 167 years, Cliffs has had a proud history of providing a safe workplace, striving to be good stewards of the environment, and establishing strong and respectful relationships with our communities. These fundamentals provide the foundation upon which we manage our business. Permission to Operate First and foremost, safety is a cornerstone of Cliffs culture and notably, a Company Core Value. Our goal continues to be aimed at zero safety incidents annually. We are making good progress on safety metrics and increasing our efforts to improve overall safety performance. This involves improving our safety procedures and training to avoid hazards to ensure every employee returns home safely every day. Nothing is more important. Our operations are often located immediately adjacent to communities where our employees live, work and play. In many of our locations, Cliffs is a major employer in the community. As a result, many of our employees not only commit their time and talent to the success of our business but likewise contribute to the strength of the very communities in which we operate. This intimate and very local connection with our communities is a vital element of our social license to operate. In, we increased our Cliffs Foundation giving and corporate contributions to over $4.3 million, investing in programs and initiatives that greatly benefitted our neighboring communities. Commitment to Sustainability Cliffs commitment to responsible and sustainable business practices is essential for maintaining our corporate reputation, competing in a globalized and highly cyclical industry, as well as addressing the trends that are shaping our world and the mining industry. The breadth and depth of stakeholder expectations continues to increase, while the industry wide challenge of reducing operating costs, lowering emissions and addressing energy security concerns are ever more frequent topics of sector conversations. In, we invested more than $13 million in energy efficiency projects, which will significantly reduce our energy related costs and are expected to reduce our annual greenhouse gas emissions by more than 45,000 metric tonnes of carbon dioxide. Exploring opportunities to reduce our costs and the impact we have on the environment will be integral to our ongoing operating strategies and essential if we are to remain globally competitive and environmentally responsible. A key element is a significant reduction of environmental incidents across all of our operating locations. We have made considerable progress towards our goal of zero incidents and are proud to have accomplished a 75% reduction in environmental incidents since In, the Cliffs Sustainability Working Group developed a new sustainability strategy that will span 2014 through This strategy builds on our previous threeyear environmental sustainability strategy and is focused on improving our operational efficiency and business performance. In short, sustainability is integrally connected with our operational goals and objectives. Through embedding our sustainability strategy effectively into our corporate strategy, we plan to achieve not only our environmental and social sustainability goals, but also our corporate imperative of ensuring that Cliffs remains economically viable amidst the challenges of a volatile pricing environment and a deeply cyclical, highly competitive industry. We encourage you to learn more about our story and how we are utilizing a Focused, Aligned, and Discipline approach to create value and enhance our social license to operate. 1 INTRODUCTION

3 OUR COMPANY Cliffs Natural Resources is a major global iron ore producer and a significant producer of high- and low-volatile metallurgical coal. We are headquartered in Cleveland, Ohio, USA and have been operating since OUR COMPANY

4 OUR COMPANY CLEVELAND, OHIO Our Company Overview OVERVIEW (million tons produced) A US Iron Ore: 27.2 (million tons produced) B Eastern Canadian A USOre: Iron Ore: Iron CLEVELAND, OHIO D B Eastern Canadian C Asia Pacific Iron Iron Ore: 8.7 Ore: 11.1 E C Asia Pacific Iron D North Coal Ore:American 11.1 Metallurgical: 6.6 D North American Coal Global Headquarters Metallurgical: 6.6Coal E North American Thermal: 0.6 E North American Coal Thermal: 0.6 C Tons Produced A Net Revenues Net Revenues Total Number of Operations/Projects Total Number of Operations/Projects Operations, Eastern Canada 5 2 Operations, 1United Operation, Asia Pacific States 2 1 Operations, Eastern Canada 3 O U R CO M PA N Y OV ER V IE W Operation, Asia Pacific $5.7billion $5.7billion B Iron Ore 5 Operations, United States Iron Ore Global Headquarters Coal 2 Metallurgical Operations, Coal North America 4 Metallurgical Operations, 1 Metallurgical & Thermal North America Operation, North America 1 Metallurgical & Thermal Operation, North America Ferroalloys & Global Exploration Group Ferroalloys & Global 3 Projects Exploration Group 3 Projects 7,138 7,138 Total Number of Employees Total Number of Employees C L IFF S N AT U R A L R ESO U RC ES

5 Driven by the Core Values of safety, environmental and capital stewardship, Cliffs associates across the globe endeavor to provide all stakeholders with operating and financial transparency. We are organized through a global commercial group responsible for sales and delivery of our products and a global operations group responsible for the production of the minerals that we market. (in millions) Direct Economic Value Generated a) Revenues $6, $6, $5, Direct Economic Value Distributed b) Operating costs 1 3, , , c) Employee wages and benefits , , d) Payments to providers of capital Iron Ore We mine and process iron ore for Asian and United States steelmaking industries. Our iron ore is used in various steel applications, including industrial, building and construction, automotive and appliances. Our production processes and technologies allow us to efficiently produce iron ore that meets our customers needs. e) Cash payments to government for taxes 3 US Canada Asia Pacific Other f) Community investments Subtotal 5, , , Economic value retained $1, ($269.80) $ Includes Cost of Goods Sold (COGS) and Other Operating Costs less impairments, employee wages and benefits, taxes and community investments. 2 Includes dividend and interest payments. 3 Does not include payroll taxes as these are captured in the employee wages and benefits line item. 4 Includes Brazil, which was specified in previous reports. Operations (million tons produced) US Iron Ore Eastern Canadian Iron Ore Asia Pacific Iron Ore North American Coal Metallurgical North American Coal Thermal Coal We produce high- and low-volatile metallurgical coal for use by the steel, merchant coke and foundry coke industries. Ferroalloys In Ontario, Canada, we have been exploring the development of chromite deposits. Although remote and with significant infrastructure challenges, our chromite deposits are considered world-class in terms of tonnage and grade. In, we indefinitely suspended the project due to the uncertain timelines and risks associated with the development of necessary infrastructure to bring this project online. However, we continue to believe in the value of the mineral deposits and the potential this region offers. Although the project is suspended indefinitely, we continue to have on-going dialogue with the Government of Ontario and First Nations communities regarding regional infrastructure. 4 OUR COMPANY

6 OUR REPORT In, we recognized the need to make sustainability an enterprise-wide initiative that was more strategic and operationally relevant. Our new sustainability strategy further embeds sustainability into all aspects of our operations in a manner that aligns with our corporate vision, mission and aspiration. Materiality Our goal is to produce a sustainability report that is relevant to all of our stakeholders and our overall business objectives. To better understand the issues that are most material to our business, we engaged a third-party provider to help us conduct a thorough materiality assessment. This assessment identified 21 aspects that were considered material to the business and our stakeholders. We have endeavored to report on each of these material aspects. Global Reporting This report reflects our reporting strategy which is to transition over time from the GRI G3.1 Sustainability Reporting Guidelines to the GRI G4 Sustainability Reporting Guidelines (GRI G4). As such, this report includes many key reporting principles and disclosure reporting requirements of GRI G4. We plan to obtain external assurance for future reports. Feedback We welcome any feedback our stakeholders may have on this report and our continued progress in sustainability. If you would like to share your comments, please contact Paul West, Director, Corporate Sustainability via at sustainability@cliffsnr.com. 5 OUR REPORT

7 OUR OPERATIONS Our success as a company depends on strategic alignment, product quality, a focus on operational efficiency, talent management and fiscal discipline. Getting these things right will position the company for future success. Throughout, we took a number of steps to execute on our strategy and improve our financial position in the near and longer term. We also continued to focus on the safety of our employees and good environmental stewardship. In, Cliffs launched a safety portal that houses all of its safety related data, including incidents and details regarding corrective actions. This system allows Cliffs to accurately identify the areas of safety where we excel and where we need to improve. Despite our continued efforts to improve our safety performance, our Total Reportable Injury Rate and Lost Days Severity Rate both increased in. We also continued to improve our emergency response standards, which is the basis for each of our operation s site-specific emergency response plan. Our supply chain strategy continued to focus on our financial and operational performance and aligns with our corporate objectives. The supply chain strategy includes performance objectives that relate to materials management, sourcing safety, and sourcing sustainability. In, we implemented supply chain programs that reduced our emissions, energy usage and maintenance related delays. We also invested significant effort to engage with local and Aboriginal suppliers and minority owned businesses. 47 million 7.2 million Tons of Iron Ore Produced Tons of Coal Produced C L IFF S N AT U R A L R ESO U RC ES

8 OUR TEAM We employ more than 7,000 people globally. While our Core Values define who we are, the values of Trust, Respect and Open Communications drive our approach to managing our talent. Our Workforce We continue to attract and retain intelligent and talented individuals who believe in our Core Values We are committed to creating a global culture that embraces multicultural talent, diversity in its people, and where all individuals are treated fairly and respectfully. In, we initiated a thoughtful and measured review of our organization to identify opportunities to reduce costs and increase efficiencies. This review was undertaken to ensure the Company s competitiveness under different commodity cycles. This review led to difficult decisions that affected a number of our employees at the corporate and site levels. The resulting organizational structure is nimble and streamlined and ensures our efforts are focused on value creation. At the end of, our workforce consisted of 7,138 employees, of which approximately 10 percent were female. Health and Wellness We provide our employees and family members with the resources and tools to achieve and maintain a healthier lifestyle, which in turn provides us with a healthier workforce. Cliffs Workforce Numbers 7,138 6,503 total 7,404 total Total Workforce 7,589 total 6, ,138 Tot Workforc 7,138 total OUR TEAM

9 OUR CUSTOMERS The global dynamics of supply and demand continue to influence iron ore and coal prices. Non-Conforming Cargo Report U.S. Iron Ore Non-Conforming Cargo Report Asia Pacific Iron Ore (million tons shipped) (million tons shipped) Customer Satisfaction Satisfying our customers is another of our Core Values. It is essential to the growth, sustainability and success of our company. We maintain close relationships with our customers and regularly solicit our customers feedback to ensure we meet their needs. Evaluating Performance To measure performance, we issue a certificate of analysis with each shipment. In, new performance measures were established for our APIO operations, while our U.S. Iron Ore and Eastern Canadian Iron Ore operations continued to improve their quality related performance and reduce the frequency of non-conforming cargoes. As a result of weather related issues and impurity challenges, our North American Coal operations recorded an increase in the number of non-conforming cargoes. Each year, we aim to reduce the annual frequency of non-conforming cargoes by 10 percent Non-Conforming Cargo Report Eastern Canadian Iron Ore (million tons shipped) NA 2010 NA 2011 NA Non-Conforming Cargo Report North American Coal (million tons shipped) U.S. Iron Ore measured per million long tons shipped. Eastern Canadian Iron Ore and Asia Pacific Iron Ore measured per million metric tons shipped. North American Coal measured per million short tons shipped. 8 OUR CUSTOMERS

10 OUR COMMUNITY Being a responsible corporate citizen is a key component of our decision making and our success. The relationship we have with our stakeholders extends to our employees, their families, schools, local businesses, government leaders, environmental groups and other partners. Our communities are important to us and we support them so they prosper. We work closely with our stakeholders to make a positive impact in the places we operate. We demonstrate our support for local communities through our engagement, social for local communities through our engagement, social investment and our decision-making strategies. Our stakeholder engagement highlights for : Contributions exceeding more than $4 million through the Cliffs Foundation, as well as corporate and local contributions. Established Coordination Committee to be responsible for building and maintaining good relationships with the Innu community at our Bloom Lake operations to achieve agreement outcomes. Collaboration with other coal mining companies regarding voluntary reclamation of abandoned mine sites. Giving Categories Education $809,258 Healthy Communities $1,807,367 Major Charitable Contributions Cliffs foundation giving & corporate contributions $1,250,539 $2,495,212 $2,453,008 $2,565,621 Local contributions $1,167,206 $1,593,528 $1,763,597 $1,756,724 Total $2,417,745 $4,088,740 $4,216,605 $4,322,345 Vibrant Communities $1,705,720 9 OUR COMMUNITY

11 OUR ENVIRONMENT Our strong environmental performance is the result of our management systems and ability to understand and manage our impacts and risks. Environmental Stewardship is one of our Core Values and can be defined as an ethic that embodies responsible planning and management of our resources. Given the nature of our business, we understand that we must have proper concern for the environment and implement measures that reduce our impacts on biodiversity and air and water quality. To obtain these results, we sought to implement management measures that improve our air and water compliance, and reduce spill frequency and volume. For example, in, we had a total of 607 spills equating to approximately 29,000 cubic meters (7.7 million gallons) across our operations, which is a 16 percent reduction in spill volume compared to Spill Volume (in million cubic meters) 161,096 34,489 29,081 One of our main business priorities for was to improve our overall environmental performance. We understand that continual improvement of our environmental performance is crucial to the preservation of our license to operate. Our Road to Zero program focuses on continually reducing the number of environment related incidents. In, our global operations were able to reduce the number of environmental incidents by 61 percent, and by more than 75 percent since the start of More than two thirds of the total volume spilled in was associated with ice melt containment. 16% Reduction in Spill Volume in 61% Reduction in Environmental Incidents in % Reduction of Environmental Incidents Since the Start of OUR ENVIRONMENT

12 Number of Spills Environmental Stewardship is one of our Core Values. It is an ethic that embodies responsible planning and management of our resources. 298 Environmental Capital Expenditures 94 (in millions) 2010 $ $ $31 $32 In, we focused on developing mine closure plans, constructing water management infrastructure, improving our biodiversity management and energy efficiency and reducing the impact our air emissions have on the environment and community $42* *Estimated *Estimated expenditures expenditures in in are are comprised comprised of of approximately approximately $25 $25 million million for projects for projects at our at Eastern our Eastern Canadian Canadian Iron Ore Iron operations, Ore operations, $13 $13 million for projects in our U.S. Iron Ore operations and $4 million in our North American Coal operations for various projects relating to water treatment, air quality and dust control, selenium management and tailings management. 11 OUR ENVIRONMENT

13 Total Water Use (in million cubic meters) Total Water Discharged to Surface Waters (in million cubic meters) Total Electricity Purchases Renewable* 27% Non-Renewable *Based on percentage of Cliffs purchased energy, GJ generated by electricity suppliers from renewable energy sources Total Energy Use Direct Indirect Total Greenhouse Gas Direct Indirect (in million gigajoules) (in million metric tons CO 2 e) OUR ENVIRONMENT

14 OUR VISION, MISSION & VALUES Safe Production Environmental Stewardship Cliffs Natural Resources is an independent, owner-operator mining company supplying the global steelmaking industry. Operational Excellence Is Our Foundation We have deep technical expertise and focus on safety, responsible stewardship and continuous improvement. Customer Excellence Is Fundamental We succeed together with our customers. Financial Discipline Enables Our Success We achieve superior economic performance. People Are Our Strength Attracting and developing industry-leading talent are vital differentiators in achieving our goals. We are a mining company that customers seek to establish a long-term partnership, communities value us as a neighbor, and a place where employees want to work. Ethical Behavior Customer Focus Creating Economic Value Group and Individual Accountability Trust, Respect and Open Communication Bias for Action Teamwork Recognize and Reward Achievement 13 SECTION TITLE

15 SUSTAINABILITY REPORT SUMMARY 2014 Cliffs Natural Resources. All Rights Reserved.