Canada. Sustainable Development Report 2013

Transcription

1 Canada Rio Tinto Alcan Primary Metal BC Sustainable Development Report 213

2 About this report We produced our first annual sustainable development report for BC Operations in This edition, covering the calendar year 213, marks the 15th year of public disclosure of key performance indicators that track our progress across the governance, environmental, social and economic dimensions of sustainable development. This report was prepared primarily for the benefit of external stakeholders, including residents of our operating areas in Northwest and North Central BC, suppliers, customers, investors, and regulators. Reporting relates to our primary metal operations in BC and, unless otherwise noted, excludes the small Strathcona coke calcining plant located near Edmonton, Alberta, which reports into BC Operations. Content has been developed in accordance with recognized international recommendations for sustainability reporting, such as the Global Reporting Initiative (GRI) guidelines. However, since this report provides a high-level overview and pertains to a single operating location rather than to the corporation as a whole, no declaration is made with respect to formal application of GRI guidelines. Information on broader corporate practices and outcomes in the area of sustainable development is available at com and In addition to this report, Rio Tinto Alcan Primary Metal BC produces a detailed Annual Environmental Report as part of the requirements associated with our operating permits in BC. That report is available at

3 Sustainable Development Report 213 Table of Contents 2 About Rio Tinto Alcan 3 Message from the general manager 5 Site operations overview 5 Facilities 6 People 6 Production 7 Kitimat Modernization Project 8 Introduction to sustainable development 9 Our sustainable development approach 9 Our sustainable development framework Performance: Governance Performance: Environment 17 Performance: Social 2 Performance: Economic 24 Looking to the future 24 Your feedback 1

4 Sustainable Development Report 213 About Rio Tinto Alcan Bernadette Kilama About Rio Tinto Alcan Rio Tinto Alcan is a global leader in the aluminium business. We are one of the world s largest suppliers of high quality bauxite, alumina, and aluminium and our AP smelting technology is the industry benchmark. Our enviable hydroelectric power position delivers significant competitive advantages in today s carbon-constrained world. Headquartered in Montreal, Canada, Rio Tinto Alcan is one of five product groups of Rio Tinto, a leading international mining company involved in each stage of metal and mineral production. The Group is listed on the London Stock Exchange and Australian Securities Exchange under the symbol RIO. Rio Tinto s reputation stems from core values of accountability, respect, teamwork, and integrity as expressed through the principles and standards of conduct set out in our global code of business conduct, The Way We Work. These guiding values determine the way we manage the governance, environmental, social and economic dimensions of our business. To learn more about Rio Tinto Alcan and Rio Tinto, please visit and 2

5 Sustainable Development Report 213 Message from the general manager Gaby Poirier Message from the general manager Something old, and something new. That seems an appropriate theme to characterize 213 at Rio Tinto Alcan s BC Operations. It was the 59 th year of production at our Kitimat smelter, which brought challenges across all areas of our business as we worked to maintain production, manage environmental impacts, ensure safety and increase cost efficiency despite an aging infrastructure. 1 At time of this writing, KMP had been subject to internal review and scheduling analysis in Spring 214. Results were that cost was upgraded to US$ 4.8 billion; schedule was overrun slightly; and first hot metal projected during the first half 215. And it was also our second full year of construction activity on the Kitimat Modernization Project (KMP) - the first at full pace - and the beginning of our preparations to transition to our new smelter. The site was transformed greatly over the year. By year end the actual physical construction on the KMP site was 36% complete. The number excludes, engineering, design, planning, procurement and other non-construction activities 1. Some of the significant KMP construction milestones can be found in the KMP update section of this report, on page 7. Despite these dual challenges, we achieved some excellent results of which all staff and employees at BC Operations can be very proud. Major 213 highlights: Achieved a significant reduction in our All Injury Frequency rate (AIFR), finishing the year at a rate of.65 compared to.79 in 2. Reduced our greenhouse gas emissions for the second year in a row, from 4.7 tonnes of CO 2 equivalent per tonne of aluminium produced in 2 to just 4.34 tonnes in 213. Through a concentrated effort on managing costs in the second half of the year, achieved cost reduction of nearly 2 per cent. Completed construction of Phase 1 of our Back-Up Tunnel Project, an important step towards ensuring we will have a secure source of power for the new smelter from our Kemano power generating facility. Launched pilot teams to ensure readiness for commissioning and start-up of the new smelter. Signed protocol agreements with both the Skin Tyee Nation and the Nee Tahi Buhn First Nation that will enable us to work together in a spirit of respect and cooperation. Successfully completed our third full year of Haisla Rio Tinto Alcan Legacy Agreement implementation. Received an amended P2 Multi Media permit for our new smelter emission profile (S 2 ), although unfortunately a public appeal to the permit was also launched. There was again a big emphasis on cost reduction across all business units in Rio Tinto, and we did our share in BC Operations, achieving a fixed cost reduction of nearly 2 per cent in the second half of the year alone. 3

6 Sustainable Development Report 213 Message from the general manager Managing change Preparation for the move to KMP had implications for our people, our financial management, our existing operations, and our stakeholder relationships. As you read about the year s highlights and challenges in the various sections of this report you will no doubt see this theme repeated often. Given KMP s location beside our existing smelter, the pace of construction activity and the growing number of people working on site challenged us to manage co-activity at many levels people, traffic, communication and cooperation. With the switch to modern pre-bake AP technology at KMP, there has been a need to reassign all employees to new jobs and begin training to give them all the competencies they will need. It was a big task to schedule training and transition of the workforce to the new smelter in a way that was coordinated with ongoing production of metal in the current smelter and commissioning of the new one. Understanding the significant change facing employees, we ramped up our efforts to ensure we were communicating proactively to help them anticipate, understand and adapt to upcoming changes. I had the pleasure of participating in two series of employee meetings this year, which gave me the chance to meet with all our hourly employees on the shop floor, update them on transition plans, and answer questions about both current operational priorities and their roles at the new smelter. Safety results in 213 were very good, with our overall injury rate down from 2. This was in part due to a renewed focus on safety and the golden rules, the most critical life-saving rules. We began the process of training people for their new roles, establishing pilot teams of employees who will begin learning about the equipment and systems that will run the new plant. This approach will ensure our readiness for commissioning and start-up and minimize any disruptions to our operations. Special equipment is being brought in to train employees, like the Pot Tending Assembly (PTA) simulator we commissioned in 213. PTA is a critical component of aluminium processing, and the equipment used is one good example of how things at the new prebake smelter will be very different and considerably more advanced than today. We also engaged with the community about the impact of construction, and the anticipated environmental performance of the new smelter. Staff at our community offices have done a good job of answering questions about projects like KMP and the Back-Up Tunnel Project, holding open house events and recruitment sessions. We also conducted community meetings about our sulphur dioxide permit and responded to each and every one of the many questions and comments received through this process. Health, Safety and the Environment Safety results in 213 were very good, with our overall injury rate down from 2. This was in part due to a renewed focus on safety and the golden rules, the most critical life-saving rules. At a time when so much was going on in our plant, we wanted to make sure no one forgot the basics, and everyone went home each day safe and uninjured. We worked hard as a team to recognize good actions and increase compliance through training, explaining why the rules matter, setting expectations and leading by example. Employees were encouraged to Take 5, or carefully examine each situation on the worksite, and stop the job if something felt unsafe. Specific safety issues related to workplace conditions on site were focused on monthly from confined spaces to machine guarding, seat belt usage and stop signs. We achieved some very good environmental results also, despite challenges with our aging smelter. Most notable was a significant reduction in the discharge of dissolved aluminum in the plant effluent, for the second consecutive year. Reducing costs There was again a big emphasis on cost reduction across all business units in Rio Tinto, and we did our share in BC Operations, achieving a fixed cost reduction of nearly 2 per cent in the second half of the year alone. Along with efforts to increase productivity, this is an important factor in proving Kitimat s place as a world-class smelter and a valuable asset in the Rio Tinto Alcan division. I arrived in Kitimat in June 213 from Rio Tinto Alcan s smelter in Alma, Quebec. It is a true privilege for me to be here as general manager as we prepare to close our old smelter and open a new one. I feel very proud of what we accomplished as a team throughout the year. We will be celebrating the 6 th anniversary of BC Operations in 214, and I have no doubt that we have the best people, with the best knowledge of the aluminium business. When I look at what we achieved in 213 and see the progress we are making towards first hot metal in the modernized smelter, I have no doubt that we are poised to become the best smelter in the world and enjoy another 6 years of success in Kitimat. Gaby Poirier General manager Rio Tinto Alcan Primary Metal BC 4

7 Sustainable Development Report 213 Site operations overview On 31 July 213 pot 4 in Line 2 was the last pot started in Lines 1 & 2. Site operations overview Facilities The Kitimat aluminium smelter completed its 59th year of continuous operation in 213. Existing operations took place alongside the first year of full construction activity on the Kitimat Modernization Project, through which a new smelter is being built to replace the existing one. The annual rated capacity of the existing smelter, located at the head of the Douglas Channel on BC s Northwest coast, is 282, tonnes of primary aluminium. Its main raw material is alumina ore, large volumes of which are imported by ship. An electrolytic reduction process is used to extract aluminium from the ore. This process involves dissolving alumina within a molten bath inside steel structures called pots. Electricity is used to break the bond between the aluminium and oxygen molecules of which alumina is composed. The heavier aluminium molecules sink to the bottom of the pot and are extracted and transported to a casting centre. Various alloying materials, such as magnesium and copper, are added to produce specific characteristics such as strength and corrosion resistance. The aluminium is then poured into moulds and chilled with water, forming solid ingots of specified shapes and sizes. The large amounts of electricity required are generated at the Kemano powerhouse located 75 km southeast of Kitimat. With an installed hydroelectric generating capacity of 1, megawatts (MW), the Kemano powerhouse uses water impounded in the 91,-hectare Nechako Reservoir in North Central BC. Other facilities on-site at Kitimat produce specific materials required in aluminium production, such as the carbon-based anodes used to introduce electricity into the pots. 5

8 Sustainable Development Report 213 Site operations overview Walter Durocher 2 Employment figures do not include 8 people in IT/RED department, a separate business unit based in Kitimat. 6 People Rio Tinto Alcan employed 1,238 people in BC as of the end of 213. The majority of employees were based in Kitimat and Terrace area, including 1,2 working at the smelter and another 26 working at the powerhouse in Kemano. Three employees were based in Vancouver and, in Burns Lake and one in Vanderhoof. 2 As of December 213, a further 1 Rio Tinto Alcan employees and a total of approximately 2, including employees of Bechtel (the KMP Engineering, Procurement and Contracts Management firm) and other contractors were employed directly on KMP. Spending on KMP is estimated to have created the equivalent of a further 1,419 jobs in Northwest BC during 213. Our workplace is unionized, with 81 per cent of the workforce (approx. 1, employees as of December 31, 213) represented by Local 231. All union members are in permanent positions. The non-unionized workforce is made up of employees performing managerial, supervisory, professional, and administrative functions, all of whom are in permanent, full-time positions. The average age of employees in 213 was 47 years, with an average of 21 years of service. Employee turnover (including transfers) for 213 was 2 per cent, compared to 1.9 per cent in 2. Case study KMP offered many apprenticeship positions in 213, in trades including piping, bricklaying and equipment operating. Read more at kitimatworksmodernization.com/media/kmp_ Newsletter/KMP_Blueprint_Issue_9_June_213.pdf In addition to regular employees, Rio Tinto Alcan employed 6 summer students in 213, comparable to 72 students in Highlights: Launched pilot teams for KMP operations, providing employees from the current smelter operations with opportunities to begin training on the new technology at other similar sites, as well as with vendors and experts. Started the development of manuals and standards for the new smelter. 213 Challenges: Maintaining operations at Rio Tinto Alcan s aging 59-year-old smelter alongside an active construction site required employees to adjust to an ever-changing landscape on the smelter site, and necessitated increased interaction and cooperation between BC Operations staff and construction crews. Production Rio Tinto Alcan Primary Metal BC produced 171,74 metric tonnes of hot metal in 213, down from 185,71 tonnes produced in 2. This production decline reflects the start of a gradual, phased idling of the older smelting technology in preparation for a transition to the new plant. In 213, the Kitimat smelter produced value-added sheet ingot as well as trilok, which is sold to customers for remelting and a variety of end-use applications. Asian customers, primarily in Japan and Korea, continue to be the primary market for our products, with sales also continuing in North America. Total sales of ingot products in 213 were 172,943 tonnes. At an average value of US$2,9 per tonne, Rio Tinto Alcan estimates the earnings value at US$ million, all in foreign exchange to the Canadian and BC economies.

9 Sustainable Development Report 213 Kitimat Modernization Project Kitimat Modernization Project Status Update Building a new aluminium smelter within the footprint of the existing and still-operating one is the essence of the monumental US$3.2 3 billion task known as the Kitimat Modernization Project (KMP). Using Rio Tinto Alcan s proprietary AP aluminium production technology, the new smelter will result in a 48 per cent increase in production capacity, and use virtually all of the firm power from Kemano. Overall, environmental emissions at the modernized smelter will be reduced by nearly 5 per cent. 3 At time of publication, the estimated value of the project had increased to US$4.8 billion. KMP will also provide improved energy efficiency, environmental performance, cost structure and working conditions, and will therefore better secure the aluminium industry in British Columbia for decades to come. 213 was the second year of full construction activity on KMP, following formal Notice to Proceed and full funding from Rio Tinto Alcan in December 2. While preparatory work began as early as 28, the pace and scope of site transformation increased significantly during 213, requiring sometimes daily adjustments to existing operations. Key 213 priorities included: Reception of all major equipment Progress of civil work Completion of the major access road Start mechanical and electrical work Getting new structures erected and enclosed to facilitate electrical and mechanical work Key 213 project milestones included: Started bricking the Anode Bake Furnace (ABF) Set the first Gas Treatment Center module (GTC) Set the first busring Set the first potshell Installed the new casthouse equipment Started the operation of the Cathode Sealing Set the compress air equipment Modernization A total KMP workforce of approximately 2,3 at year end was predominately made up of employees of Bechtel and a large number of other global and local contractors, as well as of some Rio Tinto Alcan employees in Kitimat and other locations. Throughout 213 it was estimated that 85 new employees were joining the workforce each week. Local participation in the project is significant, with an estimated 37 per cent of the project workforce coming from the local area. Approximately 1,4 members of the contracted workforce were resident at a well-serviced, on-site KMP Construction Village. KMP is on track to achieve the first pour of hot metal in the first half of 215. Case study A specialized KMP training team was formed in 213 and tasked with developing programs to train employees in all the competencies they ll need in their new roles at the modernized smelter operations. Read more at com/media/kmp_newsletter/kmp_blueprint_ Issue_9_June_213.pdf 7

10 Sustainable Development Report 213 Introduction to sustainable development The four new potlines well under construction. 4 Our Common Future, Report of the World Commission on Environment and Development, World Commission on Environment and Development, Published as Annex to General Assembly document A/42/427, Development and International Co-operation: Environment August 2, 1987, available at un-documents.net/wced-ocf.htm Introduction to sustainable development Sustainable development is commonly defined as development that meets the needs of the present without compromising the ability of future generations to meet their own needs. 4 While it cannot be achieved by one organization on its own, we believe that our business can make an important contribution to the ongoing, global transition to sustainable development. 8

11 Sustainable Development Report 213 Introduction to sustainable development Our sustainable development approach At Rio Tinto Alcan, our commitment to sustainable development is integrated into everything we do. Our operations give us the opportunity to bring long-lasting positive change to the communities, regions and countries where we work, and our metals and minerals are transformed into end products that contribute to higher living standards. Adopting a responsible approach in metals and mining development ensures we gain and maintain our license to operate. It means we provide confidence to our stakeholders, and improve our access to the mineral resources, people and capital we need. Our approach to sustainable development therefore enables us to keep investing to line with the Rio Tinto Group strategy. Our focus on sustainable development provides us with a competitive advantage. This includes helping us to manage risks effectively, reduce environmental impacts, engage with our communities, decrease operating costs, provide additional business opportunities, attract high caliber employees and ensure their health and safety, and ultimately to deliver better returns for our shareholders. Our sustainable development framework In 213, Rio Tinto Alcan again conducted a materiality assessment to determine which issues and indicators within overarching sustainable development principles would be of most relevance to external stakeholders and to our Product Group. The Rio Tinto Alcan Sustainable Development Wheel illustrated below reflects the outcome of this assessment. This report has been structured to align with the four quadrants of this circle, while containing the same set of performance measures found in earlier reports from Rio Tinto Alcan Primary Metal BC. We believe these measures remain well aligned with the nature of our current operations and our stakeholder interests, and that they are of strong local pertinence. We will consider refinement to future reports to more closely align with performance measures reported at the Product Group level, as well as to reflect the significant operational changes that will result from completion of the Kitimat Modernization Project. Further commentary on the Rio Tinto Alcan perspective on each of the four quadrants that make up this framework appears at the start of each of the following main sections. These include an overview of governance, and more detailed discussions of 213 environmental, social and economic performance results for Rio Tinto Alcan Primary Metal BC. The Rio Tinto Alcan Sustainable Development Wheel Land Climate change Air Water Biodiversity Financial performance Waste Energy Process technology & innovation Communities People Environment Social Sustainable development Economic Governance Human rights Regional economic development Engagement Health Safety Integrity & compliance 9

12 Sustainable Development Report 213 Performance: Governance A KMP employee welding the roof of the new alumina storage silo. Performance: Governance The Rio Tinto Framework: Our reputation for acting responsibly plays a critical role in our success as a business and our ability to generate shareholder value. That reputation stems from our four core values: accountability, respect, teamwork and integrity. The Way We Work, our global code of business conduct, supported by our global policies, standards and guidance notes 5, in conjunction with the requirements of local law and our voluntary commitments, forms the basis of our governance systems. 213 Highlights: Signed important protocol agreements with two First Nations neighbours the Skin Tyee Nation and the Nee Tahi Buhn First Nation establishing parameters and principles of engagement that will allow the parties to work together in a spirit of respect and cooperation. Launched public consultation regarding our SO 2 permit, as required by BC Ministry of Environment. Conducted 23 public meetings with stakeholders in Kitimat and Terrace over a six-week period in February and March. Responded to all 559 questions or comments received from the public. Following consultation, made an application for an increase on our SO 2 permit, under the direction of the Ministry of Environment. Continued to engage with a broad community-based committee regarding social impacts of KMP; indications remained that integration of the large construction workforce has not had any significant negative implications to this point. Continued to engage the Stakeholder Public Advisory Committee on all operational environmental issues including the emissions profile of the modernized smelter. Maintained staffed community offices in Kitimat, Burns Lake and Vanderhoof to provide information relating to KMP, the Back-Up Tunnel Project and Rio Tinto Alcan in general. Held regular recruitment sessions at the Kitimat office. Maintained our long-standing integrated certification to independent environmental, production, process quality and occupational health and safety standards (ISO 141, 91, 181) and conducted multiple related surveillance and internal audits. 5 Rio Tinto s global policies, standards and guidance notes are available at

13 Sustainable Development Report 213 Performance: Environment Spawning pink salmon return to Anderson Creek which runs through our smelter site. Performance: Environment The Rio Tinto Framework: Respect for the environment is central to our approach to sustainable development. Wherever possible we prevent, or otherwise minimize, mitigate and remediate, harmful effects of the Group s operations on the environment. We have developed a number of practical programs for environmental management, which include input from our local communities, as well as from experts in these fields. 213 Performance in British Columbia: Environmental challenges this year were significantly influenced by the aging infrastructure of our existing smelter. Despite this, we made significant improvements to environmental performance in several areas, including a notable reduction in greenhouse gas (GHG) emissions and a 7 per cent net reduction in the annual load of dissolved aluminum in the effluent discharge compared to previous years. 213 Highlights: Total greenhouse gas emissions (GHG) per tonne of production decreased in 213 to 4.34 tonnes of CO 2 equivalency, down from 4.7 tonnes of CO 2 equivalent in 2. This was the second consecutive year of reduction, and was primarily due to continued control of the duration of operational anode upsets and the update of perfluorocarbon (PFC) calculation coefficients. Levels of dissolved fluoride, dissolved aluminium and total suspended solids decreased in 213, below permit levels and down from 2 and 2 levels. This is the most meaningful performance indicator for plant effluent water quality. Achieved improvements in water discharge quality as a result of KMP site improvements and sustained operational practices. Completed the upgrade and replacement of instrumentation and data processing equipment for all ambient air stations. Sulphur dioxide (SO 2 ) emissions which occur during the aluminium production process - were reduced as a result of reduced metal production; emission levels remained well below the permit limit and the monthly average performance was also consistently below the permit limit. Nitrogen oxide emissions (NOx), related to smog and other air quality concerns (not previously a significant problem in the Kitimat valley), decreased in 213. Case study Water consumption is forecast to be reduced by as much as 4 per cent at our new KMP smelting facilities. Read more at media/kmp_newsletter/kmp_blueprint_issue Sept-Oct_213.pdf

14 Sustainable Development Report 213 Performance: Environment 213 Challenges: There were non-compliances in 213 (eight in Kitimat and two in Kemano):»» Two non-compliances were associated with the failure of instrumentation monitoring water and ambient air, resulting in the loss of data for a sampling period.»» A cooling pump failure resulted in a particulate air emission non-compliance.»» Five particulate emissions non-compliances were reported related to a series of upsets in the reduction process.»» Two non-compliances were associated with water quality discharge exceedances at the Kemano sewage treatment plant. Reported PAH emissions were above the established targets as a result of operational challenges, which were corrected with the repairs of critical equipment and the subsequent shutdown of reduction pots. 214 Priorities: Continue to maximize the environmental performance of the existing smelter, while effectively managing environmental impacts associated with the construction and future operation of the new smelter. Finalize the consolidation and update the permit to operate (P2) to in light of the new smelter operations requirements. Continue engaging the community and stakeholders in connection with the permit amendment process. Improve the process control to maintain air emissions within the permitted limits during the transition to the new operation. Continue improving process emission controls to operate within PAH emission targets specified in an agreement with Environment Canada. Complete the deployment of the new plant waste management practices and implement the plan associated with the closure of the existing smelter. Case study Rio Tinto Alcan s vision for waste management following completion of KMP is referred to as 3RV Reduce, Reuse, Recycle, Valorize. Read about it at com/media/kmp_newsletter/kmp_blueprint_issue Sept-Oct_213.pdf Case study Rio Tinto Alcan produces an Annual Environmental Report, which contains detailed information about environmental performance and influencing factors. It s available online at

15 Sustainable Development Report 213 Performance: Environment A Energy Use by Source, 213 A Hydroelectric (total generation at Kemano) 6,227,814 MWh 96.5% (2 = 97%) B Natural Gas 2,339 MWh 3.3% (2 = 2.8%) Fuel Oil (gasoline, etc.) 17,22 MWh <1% (2 = <1%) Total 6,455,175 MWh (2 = 6,863,623) B Hydroelectric Generation and Use, 213 A B A Smelter Energy Consumption 3,418,172 MWh 54.9% (2=54.2%) Aluminium Production (Reduction) 3,296,286 MWh % (2=52%) Auxiliary Uses 1,886 MWh - 2% (2=2%) B Power Sales 2,668,842 MWh 42.9% (2=43.7%) C Transformation & Transmission Losses 9,9 MWh 2% (2=2%) Energy Use at Powerhouse 2,8 MWh <1% (2=<1%) C Total Generation at Kemano: 6,227,7 MWh (2=6,74,) Energy Use, per Tonne of Production GHG Emissions (direct & process), Tonnes (C 2 equiv.) 19. 2,, kwh / kg Al Tonnes, CO 2 equiv. 1,5, 1,, 5, Year Year Based on Aluminium production energy use only. Direct GHG emissions from sources owned or controlled by Rio Tinto Alcan Primary Metal BC, including smelting, casting, anode production, on-site coke calcining, and power operations. Emissions are expressed on a tonne of CO 2 -equivalency basis. GHG Emissions Rate (direct & process), per Tonne of Production PFC Emissions Rate, per Tonne of Production Tonnes CO 2 equiv. / tonne AI Tonnes CO 2 Anode Effects Minutes Anode Effect Minutes Tonnes C 2 equilv. / tonne Al Year Year Direct GHG emissions from sources owned or controlled by Rio Tinto Alcan Primary Metal BC, including smelting, casting, anode production, on-site coke calcining, and power operations. Emissions are expressed on a tonne of CO 2 -equivalency, and per-tonne-of-aluminium-production basis. 13

16 Sustainable Development Report 213 Performance: Environment Fluoride Emissions, Tonnes Particulate Emissions, Tonnes (potroom roofs) 8 2, 7 6 1,5 Tonnes Tonnes 1, Fluoride Emissions Rate, kg per Tonne of Production Permit Limit, 1.9 kg/t Al 8 7 Particulate Emission Rate, kg per Tonne of Production (potroom roofs) Permit Limit, 7.5 kg/t Al kg F / tonne AI kg / tonne Al PAH Emissions, Tonnes SO 2 Emissions, Tonnes Tonnes Tonnes PAH Emissions Rate, kg per Tonne of Production SO 2 Emissions Rate, kg per Tonne of Production kg PAH / tonne Al kg SO 2 / tonne Al Year

17 Sustainable Development Report 213 Performance: Environment 25 Summer Water Temperature Management, Exceedances of 2ºC Water Temperature (July 2-August 2) Nechako River Stuart River (unregulated) 8, 7, 6, Nechako River Chinook Spawner Counts Range established in 1987 agreement Days per Year Average (Days/Year) 5, 4, 3, 2, 1, Water Use By Source, 213 Dissolved Aluminium, Dissolved Fluoride, TSS; B Lagoon Surface Water Diverted from Kitimat River and Anderson Creek to Kitimat Smelter Imported Surface Water Well Water for Non-Generating Use at Kemano,467 ML (mega-litres) 36 ML Dissolved Aluminium (mg/l) Dissolved Aluminium Dissolved Fluoride (mg/l) Total Suspended Solids Permit Limit Dis. Al Permit Limit Dis. F Permit Limit TSS = 5mg/L Dissolved Fluoride, TSS (mg/l) Total,53 ML Year Rio Tinto Alcan Primary Metal BC also diverts saltwater into its effluent treatment lagoons as a toxicity-control measure. Amounts vary in proportion to precipitation and lagoon outflows and are returned to the marine environment. These volumes are not directly measured, and are not included in the above totals. The figures above also exclude water diverted from the Nechako Reservoir for power generation, which is released into the Kemano River. 2 Nechako Reservoir 213 Inflows and Releases (% of Long-Term Average) 15 % 5 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Precipitation Inflows Spills Kemano Draft 15

18 Sustainable Development Report 213 Performance: Environment Spent Potlining Generation, Tonnes Environmental Permit Non-Compliances 2, 15 15, Tonnes, 5, Number of Events Year P2 Program Dissolved alumina Fluoride roof emissions Miscellaneous Specific Spent Potlining Generation Rate, kg per Tonne of Production The specific category of non-compliances includes types of non-compliances that were previously reported separately. P2 = Pollution Prevention. kg SPL / tonne Al Number of Spills The increase in SPL generation was a result of KMP-related potline closures in Average Potlining Lifespan, Days ,5 2, Days 1,5 1,

19 Sustainable Development Report 213 Performance: Social Through its Community Investment Program, Rio Tinto Alcan supports many community initiatives such as Arts Umbrella. Performance: Social The Rio Tinto Framework: We re committed to providing a safe and healthy workplace for our employees where their rights and dignity are respected. We set out to build enduring relationships with our neighbours that demonstrate mutual respect, active partnership, and long-term commitment. In the long run, the trust that is engendered by these solid relationships will reinforce our ability to gain preferential access to resources. 213 Performance in BC: Significant efforts were made this year to enhance communication and leadership practices aimed at meeting our zero harm by choice objective, enhancing employee health and safety and reducing workplace injuries. Anticipating the closure of the existing smelter in the future, another important focus was internal and external engagement to prepare for the transition to KMP. New employee communication initiatives were introduced to help people manage change, pilot teams began preparing current employees for new jobs at KMP, and we engaged with the community on important issues like the environmental performance of the new smelter and our SO 2 permit. 17

20 Sustainable Development Report 213 Performance: Social Employees of Rio Tinto Alcan frequently volunteer their time for many community causes including the annual Canadian Cancer Society s Relay for Life. 213 Highlights: Communities People Health Safety Considering all the changes going on with the construction of our new smelter, and despite aging infrastructure, we achieved the best safety results for height recordable injuries at the existing smelter. Further developed managerial and supervisory skills to improve leadership and employee engagement in support of safety outcomes (e.g. impactful on-the-floor interactions, promotion of pre-task risk assessments, better pre-shift meetings and communication). Increased health and safety-related communications, with an emphasis on encouraging employees to stop any tasks if safety considerations not fully addressed. Improved fatality prevention with monitoring of life saving controls intended to prevent fatalities, serious injuries and significant potential safety incidents, contributing to an ongoing reduction in the operation s risk profile. Started to develop and improve systems required to safely commission the new equipment delivered by the project. Reached agreement on a transition process for all employees to the new smelter; began assigning jobs and developing a training plan to support the transition. Understanding the significant changes for employees associated with the transition to the new smelter, implemented a new practice of regular meetings with the general manager and director of operations to enable employees to ask questions and receive first-hand information. Conducted two such road shows in 213, each involving more than 47 meetings held on the shop floor at a variety of times to coincide with employee shifts. Introduced Smelter News to enhance communication to employees. Continued efforts to keep the public aware of and engaged in ongoing dialogue about the changes to the current smelter worksite and impacts on community resulting from the winding down of existing operations and transition to KMP. AIFR / LTIFR Total # of AI and LTI AIFR (All Injury Frequency Rate) AI (All Injuries) 8 LTIFR (Lost Time Injury Frequency Rate) 8 LT (Lost Time) AIFR / LTIFR 6 4 # of AI / LTI

21 Sustainable Development Report 213 Performance: Social Engaged with the Northern BC community to share best practices for contractor opportunities associated with KMP. Hosted open house events at our community offices to share information on the Back-Up Tunnel Project, KMP and Rio Tinto Alcan operations in general. Announced partnership with the Nechako White Sturgeon Hatchery and broke ground on the new facility. 213 Challenges: In order to be KMP ready, many initiatives were launched to improve the HSE mindset and leadership at all levels of the organization, such as the LEAN Transformation in Casting and Reduction. While nearly $9, in community investments were distributed across British Columbia, new awards from the Community Investment Fund continued to be suspended for the second consecutive year, as a result of difficult economic and market conditions. Emission non-compliances (See Environment/213 Challenges on page ) associated with the challenges of operating an aging smelter, necessitated increased communication with community and government stakeholders. In light of other industrial projects being explored and developed in the community alongside Rio Tinto Alcan s KMP construction, planning was necessary in order to determine how to house the growing KMP construction workforce while minimizing impacts on the local community. 214 Priorities: Achieve further progress towards a zero harm by choice culture, as evidenced by more impactful leadership on the shop floor, better compliance and improved communication with employees. Continue with intensive coaching on health and safety-related leadership competencies, and with efforts to improve managerial-employee communication on health and safety. Simplify and improve the efficiency of health and safety-related processes and systems. Continue to speak to the local community and stakeholders about KMP progress and social impacts, if any. In particular, engage with stakeholders on the issue of environmental performance expected from the new smelter and achieve an amended permit for sulphur dioxide (SO 2 ). Respect Rio Tinto Alcan s history and the contributions of employees over the years by celebrating the 6 th anniversary of BC Operations both internally and externally. Maintain momentum for KMP both within and outside the organization in order to support change management and build excitement for new smelter. Continue to focus on completing work regarding our SO 2 permit and launch the Terminal A extension. Continue to enhance our relationships with our First Nations neighbours in the watershed region. Prepare for operational changes as we transition to new smelter, including idling of production lines, by communicating to employees in a timely manner about schedules etc. Case study Case Study: General Manager Gaby Poirier, who took up his position in June 213, has a simple approach safety first and lead by example riotintoalcaninbc.com/media/ ingot/ingot_213_fall.pdf. Community Donations in 213 Donations in 213 were marginally below the levels in 2 and 2, but above those of 2. The slight decline was because CIF activity was suspended in June of 2 due to concerns regarding the global economy and the poor financial performance of the aluminium sector. Environment $4 5% Health $159 18% Education $62 7% Recreation $255 29% Culture $252 29% Business Development $89 % $ thousands Other $2 2% 19

22 Sustainable Development Report 213 Performance: Economic KMP employees readying for foundation work. Performance: Economic The Rio Tinto framework: Sustainable development is underpinned by sustainable economies. Our continuing financial success is based on our ability to secure access to land, people and capital. We use our economic, social, environmental and technical expertise to harness these resources and create prosperity for our shareholders, employees, communities, governments and business partners. 213 Performance: 213 was a year of transition: maintaining our aging smelter and preparing to move to a new one, which brings with it financial risk. We were again faced with a low selling price for our products and the corresponding pressure to reduce costs. We rose to the challenge to bring our shareholders positive returns on their investments and redoubled our efforts to be a low-cost, best-in-class smelter by reducing costs, increasing efficiency and preparing all levels of our workforce to be increasingly business-minded. 213 Highlights: Financial performance and regional economic development Emphasis on managing working capital resulted in a total inventory reduction of 17 per cent as compared to 2. Following corporate direction from Rio Tinto for all business units to reduce costs, Rio Tinto Alcan achieved a 15 per cent reduction in operating cost for second half of 213, an important achievement as the company adapts to lower global prices for aluminium. Through a combination of production and revenue maximization and cost reductions, achieved targeted business performance improvement valued at $35 million. Optimized energy exports (3MW vs. budget 291MW), providing more power to Northwest BC. New investment committee and project management best practices put in place, helping the company to better manage cash flow. Back-Up Tunnel linkage was successfully completed, ensuring future completion of the tunnel without disruption to the smelter. Engaged the local business community to share procurement best practices. Spent a total of $4.3 million in BC in the form of payroll, pensions, goods and services, taxes and donations, of which $33.2 million (or 73.6 per cent) was spent in the Northwest region. Employed 1,238 people in BC, with all but seven of those jobs being in Kitimat or Kemano. Employment at Rio Tinto Alcan represents 29 per cent of total employment in Kitimat. 2

23 Sustainable Development Report 213 Performance: Economic 213 Challenges: Challenges maintaining pots in an aging facility, and the eventual shutdown of some pots, resulted in difficulty meeting production targets for the year. As part of ongoing efforts to operate a best-in-class, efficient smelter, there was a need to increase labor productivity and reduce overtime. Performance management with accountability at every level was pursued as part of the effort to manage costs. 214 Priorities: Better manage contractors and maximize value from work contracted out, in order to increase efficiency and cost reduction. Develop a business mindset among all employees, through initiatives like the employee share purchase plan, in order to be a truly world class smelter. Implement the Rio Tinto Business Solution (RTBS)/SAP system to all employees so as to obtain timely, quality business data for decision making and compare our performance to that of other Rio Tinto business units. Share best practices, tools and Key Performance Indicators (KPIs) with other Rio Tinto Alcan plants in order to monitor financial performance against targets. Work more closely and develop synergy with Energy Electric Quebec (EEQ) to share knowledge, best practices etc. related to the management of power operations. Idle production lines as planned and budgeted, while at the same time minimizing the impact on EBITDA. Free up human resources for training and transition to the new plant. Case study Case Study: In 213, BC Operations began preparing employees for the adoption of Rio Tinto Business Solutions (RTBS) in early 214. The business management software, already adopted by more than Rio Tinto 52, users globally, will allow us to know the real cost of our activities, compare our performance with other parts of the company and adopt best practices from other Rio Tinto business units around the world. Number of Customer Complaints Hot Metal Production, Tonnes 3, 8 25, Tonnes 2, 15,, 5, Year Production declines in 2 and 2 were a result of KMP-related potline closures. Product Mix, Casting Tonnes % Value-Added Year Trilock/Remelt* Billet Sheet % Value-Added Reduced value-added production in 28 and 29 was a result of responses to market demand conditions during the economic downturn. * Prior to 213 Remelt was not part of the Trilock product category. 21

24 Sustainable Development Report 213 Performance: Economic Direct Economic Contributions to BC in 213 BC Operations $4.3 Million Payroll & Benefits for BC employees $ 16. million Goods & Services from BC suppliers $ million Pension Payments to BC retirees $ 44.5 million Property Taxes $ 16.3 million Community Donations $.9 million Payroll & Benefits Total number of individuals employed as of Dec. 31, 213: 1,238 29% of total employment in Kitimat 6.7% of total employment in Kitimat-Terrace area Excluding workers on LTD Total estimated direct, indirect/induced employment in Kitimat-Terrace area: 2,657 Total number of pensioners living in BC (approximate): 1,683 Average compensation per employee in 213: $9,292 (including benefits) Northwest BC $4.8 million 55% Southwest BC & Vancouver Island $64.8 million 34% Goods & Services BC Operations goods & services purchased in BC: $189.6 million (excluding raw materials) Interior BC $19.9 million ($15 million in Prince George) % Payroll (regular earnings, premiums, shift pay) $5.2 million Benefits (WCB; CPP; EI; vacation pay; company pension, savings & life insurance plans) $44.8 million Communities Kitimat/ Kitamaat $85.6 million 82% Breakdown of Expenditures in Northwest BC*: Terrace/ Kitwanga $15.6 million 15% Telkwa/ Houston/ Smithers $2.5 million 2% Construction & Contracting $5.7million Sectors Manufacturing $23.8 million 23% Wholesale & Retail Trade $19.1 million 18% 48% Services $8.9 million 9% Payroll & Benefits for BC Employees $16. million Goods & Services Purchased from BC Suppliers $189.6 million Prince Rupert $.9 million 1% Number of Northwest Vendors Dealing with BC Operations (by community) Transportation $2.1 million 2% Excludes vendors with less than $25, in annual sales Pension Payments to BC Retirees $44.5 million Regional District of Kitimat-Stikine $246, Regional Hospital District $723, Community Donations Kitimat/Kitamaat Terrace/Kitwanga Historical Breakdown of Expenditures in BC (24 213) (goods and services) 8 Smithers/ Telkwa/ Houston Total: Prince Rupert Rest of BC Total Property Taxes: $16.3 million Property Taxes Remaining in Northwest BC: District of Kitimat $14.1 million $14.1 million School & Transit Purposes $1,5, BC Assessment Authority & Municipal Finance Authority $143, ($ millions) Calculation to constant dollars 9 13 Northwest BC 22 Provincial Government Portion: (e.g. School Purposes & BC Assessment) $2.2 million * As of 2, this analysis uses a narrower geographic definition of Northwest BC which excludes interior communities including Prince George.

25 Sustainable Development Report 213 Performance: Economic Direct Economic Contributions of KMP to BC in 213 KMP Goods & Services purchased in BC: $158.6 million Breakdown of Expenditures in Northwest BC: Terrace/Kitwanga $4.5 million 4.5% Northwest BC* $.1 million 63% Kitimat/Kitamaat $95.5 million 95.4% Other $.1 million <1% Southwest BC and Vancouver Island $28.7 million 18% Interior BC $29.7 million ($28.7 million in Prince George) 19% * As of 2, this analysis uses a narrower geographic definition of Northwest BC which excludes interior communities including Prince George. 23

26 Sustainable Development Report 213 Looking ahead and seeking your views A fleet of manlift machines at the ready for use on the KMP. Looking ahead and seeking your views Looking to the future 213 was a year of significant progress towards completion of the Kitimat Modernization Project. Now expected to be complete in the first half of 215, the new smelter will offer greater production capacity, more competitive costs, a greatly reduced environmental footprint, and improved working conditions for our workforce. It was also a year in which we achieved positive safety and environmental results despite the dual challenges of operating a 59-year old smelter and doing so alongside a busy construction site. As we prepare to celebrate the 6 th anniversary of our operations in BC, we have many reasons to be proud of our past and optimistic about our future. We remain committed to delivering value to our shareholders, the economies of BC and the Northwest region of the province. We look forward to what we anticipate is the last full year of operations at our current smelter which opened in 1954 and the final preparations for a smooth transition of our employees and our operations to KMP. Your feedback Relevant and balanced information on the impact of all of our operations both existing smelter operations and new smelter construction is particularly important at a time of such intense activity and largescale change. This report is a key element of our effort to provide such information, and we welcome your input on the relevance, completeness and balance of the information provided. 24 Please send your feedback to: bcopscommunications@riotinto.com