ANNUAL ENVIRONMENTAL MANAGEMENT REPORT

ORICA KURRI KURRI ANNUAL ENVIRONMENTAL MANAGEMENT REPORT JULY 2011 Revision Date Description Author Approver 0 25/07/2011 2011 Annual Environmental Report K Millard Environmental Advisor N Davies Project Manager

TABLE OF CONTENTS 1 INTRODUCTION... 1 1.1 PROJECT DESCRIPTION... 2 2 PROJECT APPROVAL REQUIREMENT... 2 3 PROJECT STANDARDS AND PERFORMANCE MEASURES... 2 4 PROJECT STATUS... 3 4.1 PROJECT PROGRESS REVIEW... 3 4.2 PLANNED PROJECT PROGRESS... 4 4.2.1 Phase 1: ANE Plant Construction & Commissioning... 4 5 ENVIRONMENTAL MONITORING AND COMPLAINTS SUMMARY... 4 5.1 ENVIRONMENTAL MONITORING... 4 5.2 COMMUNITY COMPLAINTS... 4 6 PROJECT APPROVAL COMPLIANCE... 4 2011_Kurri Annual Environmental Management Report_Rev 0.docx 28/11/2010 Page i

ABBREVIATIONS ANE CEMP CSS DPI EPL FHA FSS HAZOP ktpa OEH SH&E Ammonium Nitrate Emulsion Construction Environmental Management Plan Construction Safety Study Department of Planning and Infrastructure Environment Protection Licence Final Hazard Analysis Fire Safety Study Hazard and Operability Study kilo tonnes per annum Office of Environment and Heritage Safety, Health and Environment 2011_Kurri Annual Environmental Management Report_Rev 0.docx 28/11/2010 Page ii

1 Introduction In October 2010 Orica Australia Pty Ltd commenced construction of an Ammonium Nitrate Emulsion (ANE) manufacturing facility located at its Kurri Kurri Technology Centre, NSW. The facility will produce a maximum of 250,000tonnes of ANE per annum once commissioned (Figure 1). This plant has been developed to meet increasing demand for ANE product and projected growth in the mining and quarry sector in South Eastern Australia. Approval for this project was granted in July 2010 by the Minister for Planning. This document has been prepared to comply with the requirement of the Project Approval (09_0090) that an Annual Environmental Management Report be prepared for the project. Figure 1: ANE Plant layout 2011_Kurri Annual Environmental Management Report_Rev 0.docx 28/11/2010 Page 1

1.1 Project Description The activities covered by the Project Approval include the following: Continuation of all existing operations undertaken at the Technology Centre Construction of ANE production facility to produce up to 250,000 tonnes of ANE per annum Construction of access roads and relevant services infrastructure Construction and operation of storages for raw materials used in manufacturing process including ammonium nitrate solution (ANS), fuel blend ingredients such as canola and diesel oil, thiourea, urea, acetic acid, caustic soda and water. Truck weighing, loading and unloading facilities An office, control room, switch room and quality control laboratory 2 Project Approval Requirement As a condition of project consent Orica is required to prepare an Annual Environmental Management Report by 26 July 2011 and annually following this. This report is required to include the following: 1. Within 12 months of this approval, and annually thereafter, the Proponent shall submit an Annual Environmental Report (AEMR) for the Project to the Director-General. The report must. a) identify the standards and performance measures for the Project; b) describe the works carried out in the past 12 months and the works to be carried out in the next 12 months; c) include a summary of complaints received in the past year and provide comparison with previous years; d) report results of all monitoring required by this approval and EPL for the Project; e) provide analysis of monitoring results in the context of relevant criteria and limits, previous monitoring results and the predictions made in the EA; f) identify any trends in monitoring results over the life of the Project; and g) report on compliance with the project approval, summarise non-compliances in the previous 12 months and report on actions taken to rectify non-compliances. 3 Project Standards and Performance Measures The project is required to meet the standards and conditions detailed in the following documents: Project Approval 09-0090 dated 26 July 2010 Schedules 2 to 4 of Project Approval Environmental Approval dated December 2009 Response to Submissions report dated March 2010 The key standards and performance measures for the operating Project include: 2011_Kurri Annual Environmental Management Report_Rev 0.docx 28/11/2010 Page 2

Standard Performance Measure Comment Noise Management Noise generated from construction and operation of the project does not exceed 35dB(A) at nearest residential receptor at any time Proponent shall conduct a Noise Audit for the premises within 3 months of the commencement of operation of the ANE Facility or as otherwise agreed by the Director- General Large buffer area around plant. Noise controls have been incorporated into design and equipment selection. Air Quality Dust All trucks leaving or entering the Project site with loads have their loads covered; Trucks associated with the Project do not track dirt onto the public road network. Requirement incorporated into the Construction Environmental Management Plan. Soil and Water Discharges Section 120 of the Protection of the Environment Operations Act 1997 Bunding to comply with all relevant Australian Standards and the OEH s Storing and Handling Liquids: Environmental Protection, Participants Manual. Plant has been designed to meet bunding requirements. Lighting Australian Standard AS4282(INT)-Control of Obtrusive Effects of Outdoor Lighting Lighting complies with the requirements of the standard. Lighting compliance has been assessed during the design phase. Production Limits Production not to exceed prescribed levels. ANE 250ktpa Requirement incorporated into design. Performance standards for the construction phase of the project were incorporated into the Construction Environmental Management Plan (CEMP) and Environmental Approval (EA). These documents include requirements associated with air quality, water quality, sediment and erosion control, noise, traffic and heritage. 4 Project Status 4.1 Project Progress Review During the past 12 months there has been significant activity associated with the construction of the ANE Plant. Construction activities, as defined in the Project Approval, commenced in October 2010, and have included: Vegetation clearing for plant area and site access Construction of access roads Connection of services infrastructure 2011_Kurri Annual Environmental Management Report_Rev 0.docx 28/11/2010 Page 3

Installation of foundations and construction of site sheds Commencement of installation of plant and equipment Commencement of installation of weigh bridge 4.2 Planned Project Progress 4.2.1 Phase 1: ANE Plant Construction & Commissioning Construction of the ANE Plant is expected to be completed during October 2011, following which commissioning will commence. Prior to the commencement of operation of the Ammonium Nitrate Emulsion Plant the following key activities are to be undertaken: Hydrostatic testing of tanks and equipment Installation of remaining plant, tanks and equipment including pipework and cabling Completion of landscaping works Pre-commissioning of equipment Operation is expected to commence in early December 2011. 5 Environmental Monitoring and Complaints Summary 5.1 Environmental Monitoring The Project Approval and Environment Protection Licence (EPL) do not include any requirements for the undertaking of Project specific environmental monitoring during the construction phase of the Project. Following the commissioning of the ANE Plant monitoring will be undertaken to assess compliance with relevant conditions as outlined in the Project Approval. 5.2 Community Complaints During the first 12 months of the Ammonium Nitrate Plant construction project there were no community complaints received by the site in relation to Project activities. 6 Project Approval Compliance A review of the current status of compliance with the Project Approval 09-0090 is detailed in the table below. Where there was not complete compliance with the condition actions to address the issues are detailed. 2011_Kurri Annual Environmental Management Report_Rev 0.docx 28/11/2010 Page 4

SUMMARY OF KEY PROJECT APPROVALS Issue Condition Requirement Compliance Status Schedule 2: Administrative Conditions 1 Implement all reasonable and feasible measures to prevent and/or minimise any harm to the environment that may result from the construction and/or operation of the Project 2 Project to be carried out in accordance with the EA, Statement of Commitments, Submissions Report and the Project Approval. 3 Conditions of approval prevail in the event of inconsistency. Management plans and project management activities have been undertaken to ensure that environmental harm during construction activities is minimised. 4 Comply with the requirements of the Director-General No issues were identified 5 Production capacity limits for Ammonium Nitrate Emulsion Plant and equipment has been designed to a maximum annual production capacity of 250ktpa 6 Surrender of Existing Development Consents Surrendered to Cessnock City Council on 6 July 2011 7 Plan, studies and documents may be submitted on a progressive basis. 8 All new buildings and structures on the Project Site are constructed in accordance with the relevant requirements of the Building Code of Australia. 9 The Proponent is required to repair any public infrastructure damaged as a result of the Project. Buildings are being designed in accordance with the relevant requirements. Construction certificates have been obtained for relevant buildings. No repairs were required to be undertaken. 10 Undertaking of a dilapidation report prior to the commencement of construction. The report is to be undertaken in consultation with the RTA and a copy submitted to the Director General 11 Obtain approval from service providers prior to commencement of utility construction activities A dilapidation report was prepared in consultation with RTA and submitted to DPI on 25 February 2011 Approval was obtained from Energy Australia for the electrical infrastructure. 2011_Kurri Annual Environmental Management Report_Rev 0.docx 28/11/2010 Page 5

Issue Condition Requirement Compliance Status Schedule 3: Specific Environmental Conditions 12 Ensure all equipment is maintained and operated in a proper and efficient manner. 1 Undertake the following studies and submit to DPI Director-General for approval: The CEMP details the systems installed to ensure compliance with this condition. a) Fire Safety Study (FSS) The FSS was submitted on 9 February 2011 and a response was received from Fire Rescue NSW (FRNSW) on 3 May 2011. Further information is currently being prepared for FRNSW. b) Hazard & Operability Study The HAZOP was submitted to the DPI 15 February 2011. DPI approved the study on 18 February 2011. c) Final Hazard Analysis The Phase 1 FHA was submitted to the DPI on 8 February 2011. DPI approved the study on 18 March 2011. d) Construction Safety Study The Construction Safety Study was submitted to DPI on 8 February 2011. Approval was obtained from DPI on 18 February 2011. 2 Undertake the following studies and submit to DPI Director-General for approval: Emergency Plan (update) Safety Management Plan These studies were not required to be submitted 3 Submission of Pre-Startup Compliance Report This report was not required to be submitted 4 Submission of Post-Startup Compliance Report This report was not required to be submitted 2011_Kurri Annual Environmental Management Report_Rev 0.docx 28/11/2010 Page 6

Issue Condition Requirement Compliance Status 5 Undertake a Hazard Audit of the site and submit a report to the Director- General 6 Comply with the requirements of the Director-General in relation to conditions 1-5. 7 Site access, roadways and parking to be designed in accordance with relevant Australian Standards. 8 Prepare and implement a Concept Design Plan for the intersection of George Booth Drive and Echidna Drive. 9 Enter into a Works Authorisation Deed with RTA for upgrade work to intersection 10 Prepare a Road Transport Protocol prior to the commencement of construction and operation. This report was not required to be submitted Requirements have been incorporated into the project management plan. The roadways, access and parking have been designed in accordance with relevant standards. The intersection upgrade was not required The intersection upgrade was not required A Road Transport Protocol was included in the CEMP. Operational traffic will be considered when relevant. 11 Independent Traffic Audit Not required to be undertaken 12 Within 6 months of approval implement the offset strategy to the satisfaction of the director general 13 Biodiversity Offset Area conservation mechanism not to be altered without consent of the Director-General 14 Implement a Vegetation Management Plan for the long term management of the Biodiversity Offset Area. An application was submitted to OEH to enter into a Voluntary Conservation Agreement. This report was not required to be submitted 15 Implement Vegetation Clearing Protocol Vegetation Clearing Protocol was included in the CEMP and followed for clearing of the site prior to the commencement of construction. 2011_Kurri Annual Environmental Management Report_Rev 0.docx 28/11/2010 Page 7

Issue Condition Requirement Compliance Status 16 Carry out all reasonable and feasible measures to minimise dust generated by the Project 17 Trucks entering or leaving the Project site must have their loads covered and must not track dirt onto public roads 18 Noise generated from the construction and operation of the project shall not exceed 35dB(A) at nearest residential receptor 19 The Proponent shall conduct a Noise Audit for the premises within 3 months of the commencement of operation of the ANE facility or as otherwise directed by the Director-General 20 Implement the recommendations of the Bushfire Threat Assessment included with the EA and also any additional bushfire hazard reduction measures outlines in the Submissions Report CEMP included measures to control dust. Measures for the control of dust were included in the CEMP. Measures for the control of noise were included in the CEMP. Not required to be completed during the period Requirements included in the design. 21 Compliance with s120 of Protection of the Environment Operation Act 1997 There were no water pollution related incidents associated with the Project. 22 Ensure that all chemicals are stored in appropriately bunded areas. CEMP included requirements for management of materials. Design incorporates bunding requirements. 23 Prepare a Soil and Water Management Plan Measures for the control of erosion and sediment were included in the Construction Environmental Management Plan. 24 A Stormwater Management Plan must be included in the design. CEMP included these requirements, where applicable to construction. 25 An Erosion and Sediment Control Plan is to be prepared. CEMP included an Erosion and Sediment Control Plan. 26 Ensure that lighting associated with the Project complies with the latest version of Australian Standard AS 4282(INT)-Control of Obtrusive Effects of Outdoor Lighting A consultant was engaged to provide a report on external lighting to ensure compliance. 2011_Kurri Annual Environmental Management Report_Rev 0.docx 28/11/2010 Page 8

Issue Condition Requirement Compliance Status Schedule 4: Environmental Management, Reporting and Auditing 27 Waste to be classified in accordance with DECCW Guidelines 2008 and disposed of to approved premises 28 In the event that skeletal remains, or an Aboriginal object is identified, all construction activities that will or would have the potential to impact on indigenous heritage item(s), shall cease until the DECCW is consulted and their directions complied with 1 Prepare and implement an Environmental Management Strategy for the Project to the satisfaction of the Director-General. 2 Prepare an Annual Environmental Management Report and submit to the DPI Director-General 3 Notify the Director-General and any other relevant agencies of any incident with actual or potential significant off-site impacts 4 An independent Environmental Audit within two years of commencement of operations at the ANE Facility and every 3 years thereafter 5 The following information regarding the Project is to be included on the website: Copy of all current statutory approvals Copy of the current environmental management strategy and associated plans and programs Copy of any Annual Reports (over the last 5 years) Copy of any Independent Environmental Audit, and the Proponent s response to the recommendations in any audit; and Any other matter required by the Director-General Measures for the control of waste were included in the Construction Environmental Management Plan. CEMP included requirements. Aboriginal groups were consulted during the construction period. The CEMP was submitted on 29 September 2010 and DPI approved the document on 7 October 2010. Submission of this report by 26 July 2011 There were no incidents relating to the Project that required reporting Not required Copies of information relating to the project were included on the Orica Mining Services website (www.oricaminingservices.com). 2011_Kurri Annual Environmental Management Report_Rev 0.docx 28/11/2010 Page 9