Steel for Life. Sustainability in a Changing World

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1 Steel for Life Sustainability in a Changing World

2 Steel a material of modern life BlueScope Steel is proud of our industry and our contribution to the regional economies where we conduct business across the world. Our communities rightly demand that steel producers are environmentally responsible, ensuring our industry is sustainable. The challenges of a changing world Our world is facing a number of challenges such as climate change, greenhouse gas emissions, air pollution and drought. Wherever we do business, we place great emphasis on managing the effect of our operations and products on communities. We are committed to using resources efficiently. As our business expands throughout Asia, we are implementing equipment and educational programs at our new facilities so that they too minimise their environmental effect on local communities. Improving air quality There are many examples of our commitment to improving air quality. In the United States, North Star BlueScope Steel has recently invested around US$30 million in a new air filtration system to improve the plant air quality for employees and the community.

3 XLERPLATE pylons used in the bridge over Lal Lal Creek near Ballarat for the Regional Fast Rail project.

4 Our BlueScope Water business complements our water conservation efforts. BlueScope Water sells rainwater harvesting products - tanks for urban, rural and commercial use, and storm water, culvert and irrigation infrastructure systems.

5 A leader in water conservation Traditional steel making technologies in our major production facilities require a lot of water. In many of the areas in which we operate, water shortages and water quality have become significant issues for communities. So we have taken a leading role in water conservation and recycling. Our Port Kembla and Western Port operations have extensive water reduction and recycling programs in place. In recent years we have greatly reduced the amount of fresh water used at these sites, and we are now applying these water conservation methods at our new facilities in Asia. In 2006, Port Kembla Steelworks set a new Australian industry benchmark when it partnered with Sydney Water to reduce its use of fresh water by more than 50 per cent - enough to meet the annual water consumption of 26,000 Australian households. Sydney Water s new sewage treatment plant now provides up to 20 million litres of reverse osmosis recycled water a day to the Steelworks industrial processes. In addition, salt water comprises 96 per cent of the total water used for processing and cooling. The project complements other improvements in water management at our operations in the Illawarra. We are also working with government and water authorities to investigate ways to further reduce our fresh water consumption at our Western Port facility in Victoria. Water conservation efforts Most water used at Port Kembla Steelworks (PKSW) for steel processing and cooling is salt water. A recycling initiative between BlueScope Steel and Sydney Water Corporation is playing a major role in preserving precious water supplies. PKSW Total Water Use Fresh water 2% Waste water 2% Salt water 96%

6 Global warming BlueScope Steel believes global warming is an important issue and one that requires a global response. We are conscious of the need to do our part in helping reduce greenhouse gas emissions. Coal (carbon) is an essential ingredient in the chemistry of blast furnace iron making. No other commercially viable method for producing raw steel currently exists. New technology will be vital in helping to meet the greenhouse and energy challenge. BlueScope Steel is participating in the International Iron and Steel Institute s CO 2 Breakthrough Project and the Asia-Pacific Partnership on Clean Development and Climate (AP6), programs aimed at developing new technologies to reduce CO 2 emissions. Growing demand for steel products is driving large increases in steel production, especially in developing countries. International Iron and Steel Institute figures show that in 2006, approximately 8 million tonnes of steel was manufactured in Australia compared to 419 million tonnes in China and 44 million tonnes in India. So measures to cut greenhouse gas emissions should be comprehensive and global, covering both developed and developing countries. Across our global operations, we continue to find ways to improve energy efficiency which reduces the environmental impact of the steel we make. Landmark agreement In 2006, we signed an agreement with the New South Wales Government paving the way for a feasibility study into a co-generation plant that could potentially reduce greenhouse gas emissions by recycling waste gases from steel making for use in electricity production.

7 Recycling Greenhouse gas emissions Greenhouse gas emissions by country Australia emits about 1.5% of the world s greenhouse gases (GHG). Over the period 1990 to 2004, Australia reduced its GHG emissions per capita by 12.7% from 32.3 to 28.2 tonnes. Rest of the World 33.7% USA 25.2% China 15.2% EU 12.3% Russia 6.7% Japan 5.4% Australia 1.5% Source: World Resources Institute, CO 2 emissions Australia greenhouse gas emissions by sector Australia s net GHG emissions totalled million tonnes of carbon dioxide equivalent (CO 2 -e) in 2004, the most recent year for which data has been published. About half of Australia s GHG emissions were from stationary energy, mainly electricity generation. Agriculture 17% Fuel combustion - transport 14% Fugitive emissions from fuel 6% Land use, land use change and forestry 6% Industrial processes 5% Waste 3% Sources of BlueScope Steel s greenhouse gas emissions Over three quarters of BlueScope Steel s GHG emissions are from the combustion of coal and coke to make iron. Carbon dioxide is an unavoidable by-product of this process. The amount of carbon used to make steel is dictated by chemistry, physics and thermodynamics, and current use of carbon is close to minimum levels. Worldwide, BlueScope Steel produces approximately 14.5 million tonnes of GHG emissions (CO 2 -e) annually. Coal and coke 77% Electricity 13% Natural Gas 4% Fluxes 5% Other 1% Electricity generation 35% Manufacturing and construction 8% Other energy industries 4% Households 2% Commercial 1% Other 1% Source: AGO, National Greenhouse Gas Inventory Note: Figures do not add up to 100% due to rounding. Stationary energy 50% Once steel is made, it becomes the world s most recycled material. The unique properties of steel allow it to be recycled over and over. Each year, many millions of tonnes of recycled steel from automobiles, machinery, ships, buildings and other steel products, as well as recycled steel generated from within steel plants, are re-used in steel production. By-products and associated waste from the steel making process have many uses, from road base, concrete and cement to garden mulch, pigments and fertiliser. Also, vanadium slag from the steel making process is sold each year for re-use in manufacturing high strength steel products. These and other initiatives prevent thousands of tonnes of waste materials going to landfill each year. Recycling at work At the Port Kembla Steelworks, recycled steel comprises 15 to 20 per cent of the material that goes into steel making furnaces. In the United States, North Star BlueScope Steel uses 100% recycled steel in its manufacturing process. New Zealand Steel sells the slag produced in iron making for recycling in road construction.

8 BlueScope Steel Limited Level 11, 120 Collins Street Melbourne, Victoria 3000 Australia T: F: E: