Xstrata Copper Canada Sustainability Report Stronger Together

Transcription

1 Xstrata Copper Canada Sustainability Report 2012 Stronger Together

2 The theme of our 2012 Sustainability Report, Stronger Together, reflects our belief that we, at Xstrata Copper s Canadian operations, can compete more effectively and create greater value through collaboration with our global colleagues, local communities and other stakeholders than we can on our own.

3 People on cover 1- Wesley Collas, CCR Refinery 2- Alan Chow, Kidd Operations 3- Marie-Julie Vander Haeghe, Rouyn-Noranda 4- David McCarthy, Kidd Operations 5- Moustapha Kori-Mbami, Kidd Operations 6- Johanne Michaud, CCR Refinery 7- Alain Mantha, Horne Smelter 8- Paul Hébert and Marilyn Perron, Rouyn-Noranda

4 Contents Highlights 1 Awards and Recognition 1 Definition of Purpose 1 Our Strategic Objectives 1 Our Values 2 Who We Are 4 Our Sustainable Product Cycle 5 Xstrata plc 17 SD Standards 5 Societal Benefits of Copper 6 Chief Executive s Message 8 Senior Management s Message 10 How We Manage Sustainable Development Scorecard and 2013 Targets 16 Economic Contribution Highlights 17 Building Strong Communities 17 Securing Our Future 17 A Vital Role in Québec 17 Focus on Kidd Operations 17 Alternative Uses for the Kidd Metallurgical Site 17 About the Copper Industry 18 Health and Safety Highlights 19 Safety Performance 20 High-Hazard Activities 20 Contractor Safety 20 Occupational Health 20 Safety Culture 20 Priorities for Case Study 22 Our People Highlights 22 Engaging Employees 23 Mentoring Women 23 Sharing Best Practices 23 Leadership Development Focus on Culture 23 Technical Talent Development 23 Labour Relations 23 Case Study 24 Communities Highlights 25 Community Dialogue 25 A Helping Hand 25 Transition in Timmins 25 Employee Volunteers 25 Our Stakeholders 26 Supporting Local Initiatives 26 We re on the Web 26 Recycling Day at the Horne Smelter 26 Community Complaints and Events 27 Biking with a Purpose 27 Recognising Student Achievement 27 Case Study Environment Highlights 29 Environmental Incidents 30 Climate Change and Energy Use 31 Air Emissions 32 Water Management 32 Waste and Tailings Management 33 Biodiversity 34 Closure Plans 34 Closed Sites 34 Product Responsibility Priorities 35 Case Study 36 GRI Index 40 Table of Key Sustainability Data Inside back cover Glossary Back cover Contact Information About This Report The seventh annual sustainability report for Xstrata Copper s Canadian operations presents the sustainable development (SD) performance of Kidd Operations (mine and concentrator), the Horne Smelter, the Canadian Copper Refinery (CCR), Xstrata Recycling and Closed Sites from January 1, 2012, to December 31, During this period, the Canadian operations were under Xstrata Copper s management as a commodity business unit of Xstrata plc. As part of the Xstrata Group, we operated in line with Xstrata s Business Principles, Code of Conduct, SD Policy and 17 SD Standards and were audited against these policies and standards under the company s rigorous 2012 assurance programme. A copy of the 17 SD Standards can be found on page 5 of this report. Global Reporting Initiative This report was prepared in accordance with the Global Reporting Initiative (GRI) G3 Guidelines. Performance highlights, site initiatives and key data are presented on pages 16 to 35. A GRI index and performance indicators are provided on pages 36 to 40. Data Presentation In determining the data and calculations included in this report, we have used procedures that are regulated and aligned with measurement models provided by the Xstrata Group. All monetary values are expressed in United States dollars, unless otherwise stated. Certain data is presented differently from the previous year because of changes in our organisational structure. Any changes to the scope, boundaries or measurement methods since the last report are noted where applicable. Report Distribution This report is also available online at along with other key SD policies and standards.

5 2012 Highlights Xstrata shareholders approved the merger of Glencore International and Xstrata plc to create a global mining giant. The merger is awaiting final regulatory approval in To strengthen the alignment between sales and production worldwide, all custom Xstrata Copper metallurgical plants, including the Horne Smelter, the CCR Refinery, the Recycling plants and our Canadian Closed Sites, were integrated into the Xstrata Copper Marketing Division (XCMD), along with the Altonorte Smelter in Chile and the CRL Refinery in Australia. There were zero Lost-Time Injuries (LTI) at the Horne Smelter and Kidd Operations. The Horne Smelter achieved two consecutive years of zero LTIs. We completed the progressive rehabilitation of the former Kidd Metallurgical site ahead of time and on budget, with no safety or environmental incidents. Our XCMD high-margin feed team identified and implemented several opportunities to grow the volume of high-margin feeds supplying our metallurgical facilities. Awards and Recognition We were honoured to be recognised with the following awards in CCR Refinery Received the Hélène-Vandal award for promoting the inclusion of women in its workforce. See page 23 for details. Awarded the Grande Mention prize from the Mouvement québécois de la qualité for outstanding performance in the areas of quality and management practices resulting in major gains in productivity as well as improvements in health, safety and energy use. See page 11 for details. Kidd Operations Won a Porcupine United Way Spirit Award for its 2011 employee endeavours in fundraising. Won the NorthernTel Technology Award at the Timmins Chamber of Commerce s NOVA Awards for integrating advancements in technological and product innovation with measurable and positive results. Definition of Purpose We are proud to be developing the leading copper business in a sustainable manner, providing vital resources to society while delivering superior shareholder returns. We are passionately committed to our people, safety and health, the environment and our host communities. We work in open partnerships to create enduring value for all our stakeholders. Horne Smelter Awarded the F.J. O Connell Trophy for the third time in four years. The award is presented annually by the Québec Mining Association to companies demonstrating the best safety performance in the province. Presented an Extra award by the Chamber of Commerce and Industry of Rouyn-Noranda for outstanding performance in mineral processing. Received the 2012 Gift of Life Humanitarian Award from the Québec branch of the Kidney Foundation of Canada, recognising the site s commitment to the organ donor cause and an employee-run fundraiser to help one of the Horne Smelter s employees donate a kidney to a friend. Our Strategic Objectives Injury-free, safe work environments Demonstrated leadership in environmental performance Reputation for social responsibility Realisation of the full potential of our people Maximise value from our physical assets Cost competitiveness through the cycles Value creation through dynamic growth and continuous improvement Our Values We do what we say We act decisively to create value We dare to be different We act with care We hold ourselves accountable Stronger Together 1

6 Who We Are Xstrata Copper Operations in Canada With headquarters in Toronto, Ontario, Xstrata Copper s Canadian operations comprise Kidd Operations, the Horne Smelter, the Canadian Copper Refinery (CCR), Xstrata Recycling and Closed Sites. Approximately 2,800 employees and contractors manage activities at all stages of the sustainable development cycle, including exploration, mining and milling, smelting and refining, and closure and rehabilitation. Xstrata Copper Xstrata Copper is the fourth largest global copper producer and one of the world s largest producers of smelter, refined and recycled copper, including from third-party materials. In 2012, we produced 747,000 tonnes of mined copper in cathodes and concentrates. We are one of the commodity business units within the major global diversified mining group Xstrata plc. Our headquarters are located in Brisbane, Australia, and we operate in eight countries: Argentina, Australia, Canada, Chile, Peru, the Philippines, Papua New Guinea and the United States. We employ over 20,000 people and play an essential role in the communities in which we live and work, providing jobs, training, infrastructure, income for suppliers and social development. Our highly decentralised organisational structure allows our regional management teams to directly manage their operations and projects with a strong sense of ownership. Important business decisions are made locally, which allows us to act decisively and create sustainable value for both our business and our stakeholders. The copper we produce is vital to our modern society and used extensively in energy generation and distribution, building products and electronic equipment. With its growing use in green-technologies and antimicrobial applications as well as its ability to be recycled, copper is playing an important role in creating a sustainable future. Zug Kidd Operations (Timmins) Horne Smelter (Rouyn-Noranda) Dubai Shanghai Tokyo Recycling (San José) Toronto New York CCR Refinery (Montréal-East) Recycling (East Providence) Penang Tampakan Frieda River Ernest Henry Mining Townsville Copper Refinery Mount Isa Mines and Port Operations Mount Margaret Antamina Las Bambas Antapaccay Altonorte El Pachón Santiago Energía Austral Tintaya Collahuasi Lomas Bayas Agua Rica Minera Alumbrera Operations Projects Recycling Commercial and Marketing Joint Venture Operations 2 Xstrata Copper Canada Sustainability Report 2012

7 Kidd Operations Kidd Operations, located in Timmins, Ontario, includes a mine and a concentrator. In operation since 1966, Kidd Mine is the deepest mine below sea level in the world. The concentrator processes copper-zinc ore into concentrate, which is shipped to the Horne Smelter and other smelters worldwide. We employed close to 1,300 employees and contractors at year-end. Horne Smelter Located in Rouyn-Noranda, Québec, the Horne Smelter is the only remaining stand-alone copper smelter in Canada. The smelter uses both copper concentrates and precious-metal-bearing recyclable materials as its feedstock to produce a 99.1% copper anode. The site also operates a sulphuric acid plant. At year-end, we employed close to 700 employees and contractors. Xstrata Recycling Xstrata Recycling is one of the world s largest recyclers of metallic copper and electronic scrap. The business contributes to the production of significant quantities of copper, gold, silver, palladium and platinum for our smelting and refining facilities. Facilities are located in East Providence, Rhode Island, San Jose, California (both of these facilities are ISO certified) and Penang, Malaysia. Xstrata Recycling employed 75 employees and contractors at year-end. More information is available at Closed Sites A total of 15 closed sites located in Québec, Ontario and British Columbia are managed by Xstrata Copper in Canada. At large sites, seven full-time Xstrata employees and contractors conduct environmental monitoring and surveillance and maintain infrastructures. Where needed, they operate water treatment plants. Canadian Copper Refinery (CCR) Located in Montréal-East, Québec, CCR Refinery is the only copper refinery in Canada. The site refines copper anodes from the Horne Smelter and the Vale and Altonorte smelters, as well as other unrefined copper and precious metals from Xstrata and third-party sources. We employed some 650 employees and contractors at year-end. Our Québec-based metallurgical operations are highly integrated. The Horne Smelter provides two-thirds of the anodes processed by the CCR Refinery. Most of our refinery's precious metals come from our smelter Production (tonnes, unless otherwise noted) Kidd Operations Horne Smelter CCR Refinery Xstrata Recycling plants Total Milled ore 2,268,700 Copper in concentrate 34,375 Zinc in concentrate 78,094 Copper anodes 194,819 Sulphuric acid 618,048 Copper cathodes 265,538 Gold (oz) 573,266 Silver (oz) 30,951,749 Platinum-palladium (oz) 36,780 Rhodium (oz) 2,314 Selenium 458,775 Tellurium 53,870 Material processed 12,200 Closed Sites Location Operated Bell Granisle, British Columbia Brenda Mines Boss Mountain Peachland, British Columbia Hendrix Lake, British Columbia Camchib Timmins, Ontario Gaspé Murdochville, Québec Granisle Mine Granisle, British Columbia Kidd copper and zinc plants Rouyn-Noranda sites (8) Timmins, Ontario Rouyn-Noranda, Québec Horne Smelter Logo Gets a Makeover The Horne Smelter celebrated its 85 th year of operation in To mark the occasion, the smelter unveiled a new logo and hosted a number of events for employees and neighbours. The circle and the three arrows represent the smelter s history and the infinite recycling capabilities of copper. The smaller circles represent the collaboration of our employees, together and with the community. Stronger Together 3

8 Our Sustainable Product Cycle In 2012, the Horne Smelter extracted almost 25,000 tonnes of copper and two million ounces of precious metals from 92,833 tonnes of recycled material. 1Everyday Products Customers use Xstrata metals to manufacture industrial and consumer products that are part of our everyday lives. 2Sampling High-value precious-metal materials, primarily from the electronics industry, are sampled, assayed and prepared for smelting. 3 4Refining - CCR Refinery Anodes from the Horne Smelter are refined into pure copper and precious metals at the CCR Refinery, which are then sold. Smelting - Horne Smelter Recyclable materials are processed for metal recovery at the Horne Smelter, along with copper concentrates from Xstrata s mining operations and metallic scrap and low-value precious-metal materials from scrap dealers. 4 Xstrata Copper Canada Sustainability Report 2012

9 Xstrata plc 17 SD Standards 1 Leadership, Strategy and Accountability 2 Planning and Resources 3 Behaviour, Awareness and Competency 4 Communication and Engagement 5 Risk and Change Management 6 Catastrophic Hazards 7 Legal Compliance and Document Control 8 Operational Integrity 9 Health and Occupational Hygiene 10 Environment, Biodiversity and Landscape Functions 11 Contractors, Suppliers and Partners 12 Social and Community Engagement 13 Life Cycle Management Projects and Operations 14 Product Stewardship 15 Incident Management 16 Monitoring and Review 17 Emergencies, Crises and Business Continuity Societal Benefits of Copper Copper and its alloys are widely used in a variety of products that enable and enhance our everyday lives due to their excellent electrical and thermal conductivity; strength and formability; outstanding resistance to corrosion and fatigue; and natural antimicrobial properties. In fact, copper is playing an increasingly important role in addressing many of society s greatest sustainability challenges, including energy efficiency, food supply, public health and renewable energy. Energy Around 20% of the world s population lives without electricity and the opportunities it provides for working, learning and operating a business. Increasing access to electricity is seen as fundamental to improving global living standards. In 2012, the United Nations (UN) Secretary General launched a new long term program entitled Sustainable Energy for All. Its aim is to achieve universal access to electricity by 2030 and to greatly expand the use of clean, renewable energy and increase energy efficiency globally. Copper is used extensively in electrical wire and cabling, electric motors and green technologies, such as wind turbines and solar panels and, as such, will have a significant role to play in achieving these ambitious UN targets. Food Supply According to the UN s Food and Agriculture Organisation, nearly 75% of the world s fisheries are fully exploited and demands on the aquaculture industry are outpacing population growth. Innovative aquaculture techniques, such as copper-alloy nets, are helping to improve farm productivity. The nets natural ability to stay clean prevents them from clogging with organic matter, improving water circulation and leading to healthier fish, higher yields, lower costs and reduced environmental impact as a result of increased water flow. The strength of copper alloy nets also aids in fish development by reducing attacks from predators. Furthermore their recyclability provides a responsible waste management solution and promotes a sustainable environment. Public Health Copper and its alloys have a natural ability to kill 99.9% of bacteria within two hours of exposure on surfaces that are cleaned regularly. This unique ability has been recognised by the U.S. Environmental Protection Agency (EPA) and copper is the only solid touch surface permitted to make human health claims. Antimicrobial copper is increasingly being used in efforts to reduce the spread of disease in public spaces and has already been applied in healthcare facilities, childcare centers and public transport systems throughout the world. With hospital-acquired infections impacting around 25 million people annually, copper touch surfaces can make a valuable contribution to improving patient wellbeing and reducing the burden on public healthcare systems. For further information regarding copper s many benefits to modern society, including international case studies and news updates, visit and Stronger Together 5

10 Chief Executive s Message 2012 was a transformational year for Xstrata Copper as we successfully commissioned several major development projects that have transformed our portfolio of older, end-of-life mines into long-life, lower-cost and highervolume operations. The principles of sustainable development (SD), which are fundamental to our business practices, were an important driver behind our commitment to investing in these new mines and expansions. Through these growth projects we are able to continue our significant contributions to the communities and countries in which we operate through local employment, investment in social projects and community partnerships, opportunities for local suppliers and enterprise development and important fiscal contributions to governments. With the increased activities at our major construction projects, in addition to our existing operations and other sites, our total hours worked per month increased by more than 30% in 2011 averaging around seven million hours per month. It is noteworthy that despite this significant increase in exposure hours, our total number of recordable injuries decreased compared with the previous year and we were able to reduce our Total Recordable Injury Frequency Rate (TRIFR) and Lost-Time Injury Frequency Rate (LTIFR) by 31% and 11% whilst maintaining our low Disabling Injury Severity Rate (DISR). Since 2006, we have achieved significant year-on-year improvements in our key safety indicators recording reductions of around 90% during this period. Regrettably, however, over the 80 million hours worked during the past year we recorded two fatalities at our operations. We know these incidents should never occur in our organisation, and we remain resolute in our efforts to eliminate fatalities and serious injuries from our workplace. Throughout the year we maintained our solid track record in environmental management, meeting our 2012 performance targets with no Category 3 (moderate), or more serious, environmental incidents recorded at our operations and projects. Over the past few years we have seen significant improvements in our environmental performance and awareness across our organisation as reflected by the extensive reporting and investigation of Category 1 (negligible) and Category 2 (minor) incidents, which continued in We have also made considerable progress in improving our data collection and analysis to ensure we can better identify and pursue opportunities to further enhance the eco-efficiency of our operations, and we are seeing positive results from this work. Our environmental footprint in terms of greenhouse gas emissions, energy consumption and fresh water usage remained at a similar level from the previous year, despite the environmental challenges presented by ageing or growing operations and the construction of new mines and mine expansions. 6 Xstrata Copper Canada Sustainability Report 2012

11 During the year we participated in a wide range of corporate social involvement programs, primarily in the areas of social and community development, education, enterprise and job creation and health, and we invested around US$58 million in these initiatives that were developed in consultation with local communities. We also continued to engage closely with local communities and other stakeholders on a range of issues related to our mining operations and projects. We understand that within our host communities there is a diverse range of views and beliefs regarding our activities and respecting the rights and fundamental freedoms of our stakeholders and listening to their concerns is an important part of our business approach. In 2012, under Xstrata Copper s management, we continued to operate in line with Xstrata s Business Principles, Code of Conduct and 17 SD Standards that aligned with international standards, including the International Council on Mining and Metals (ICMM) sustainability principles and guidelines; the UN Global Compact; the UN Declaration of Human Rights; the Voluntary Principles on Security and Human Rights; and relevant ISO standards. Together with our business assurance and reporting systems and processes, they provided us with a robust framework for upholding human rights within our organisation. We sought to strengthen our approach to managing human rights related issues during the year through additional guidance and training for our operations and projects. Key areas that we continue to focus on include community consultation and resettlement, supply chain management, community grievance mechanisms and the management of private security providers and our interactions with public security forces. We operate in several regions where security issues make it necessary for us to provide increased protection for our sites and employees, including Peru, Papua New Guinea and the Philippines. In these locations, human rights awareness training forms part of our employee induction programmes, and we manage our private security service providers in line with the Voluntary Principles on Security and Human Rights (VPs). We ensure that our security personnel are trained on the VPs, and we continue to seek opportunities to actively promote the VPs with our key stakeholders, including public security forces. Xstrata s commitment to the VPs was formally recognised in early 2013 when we were granted membership in the Voluntary Principles on Security and Human Rights Initiative. Over the past decade, Xstrata has gained an industry-leading reputation for SD management and performance. As a member of the Xstrata senior executive team and as Chief Executive of Xstrata Copper, I have been very proud of the SD initiatives that have been developed and implemented across our global copper business and of the significant performance improvements we have achieved over this time. It has also been very satisfying and encouraging to have our performance in this area recognised by our external stakeholders, and this continued in 2012 with our copper sites receiving a total of 36 national and regional awards for their sustainability achievements. Transparent communication with regard to our SD performance has been an important aspect of our management approach, and our operations and projects have been publishing annual sustainability reports, such as this one, since the inception of Xstrata Copper in These reports contain clear, audited data by which our stakeholders can assess our performance against our SD targets and commitments. We welcome any feedback you may have regarding our sustainability reporting or performance by at [email protected] or through the contact details provided in this report. The Glencore International/Xstrata plc merger will create a major natural resources group with a world-class portfolio of assets and enhanced marketing capabilities. The combined copper business will have over 30 operations and projects across 11 countries and employ more than 40,000 people. With Xstrata Copper s strong track record of operational and SD performance and the enviable reputation that we have earned with our stakeholders, I am confident that we have the people, systems and culture in place to positively influence and support the broader organisation in sustaining and further enhancing the very high SD standards that we have become so proud of as an organisation. Charlie Sartain Chief Executive Xstrata Copper Stronger Together 7

12 Senior Management s Message In early 2012, Xstrata Copper was restructured in order to be able to compete more effectively in the global marketplace. To tighten the alignment between sales and production worldwide, all custom Xstrata Copper metallurgical plants, including the Horne Smelter, the CCR Refinery, the Recycling plants and our Canadian Closed Sites, were integrated into the Xstrata Copper Marketing Division (XCMD), along with the Altonorte Smelter in Chile and the CRL Refinery in Australia. Throughout the year, there was also the prospect of a merger between Glencore International and Xstrata plc to create a global mining giant. The merger was approved by Xstrata shareholders in November and is awaiting regulatory approval in Bruce Anderson Despite the changes in organisational structure and reporting relationships, our business activities in Canada remained the same and we maintained our strong commitment to operational excellence and to our people and communities. Operational Excellence In a year that saw a significant amount of change in our organisation, Xstrata Copper s Canadian operations achieved impressive results in many key areas. Our accomplishments are a testament to our people s commitment to working together across our sites, within our communities and around the globe to make a positive difference in the world. Tom Semadeni Safety performance was the highlight of the year. There were zero Lost-Time Injuries (LTI) at the Horne Smelter and Kidd Operations. In fact, the Horne Smelter has now achieved two consecutive years of zero LTIs. At the former Kidd Metallurgical site, employees and contractors involved in closure and reclamation activities worked more than 57,000 hours without an LTI. Across our Canadian sites, we had only two LTIs, which involved a contractor at the closed Gaspé property and a CCR Refinery employee. During times of change, it s not unusual for safety performance to slip. However, we remained vigilant and our results are a reflection of the importance that each and every person placed on working safely. Our employees showed great resolve and creativity in overcoming operational challenges during the year. Kidd Mine achieved 97% of its annual production targets despite a section of the mine remaining closed due to a seismic event the previous year. Thanks to the ideas brought forward by employees as part of the Vision 2020 programme, we are now in a position to potentially extend the life of the mine to At the metallurgical operations, operational and supply issues hampered plant output; however, our team worked hard to manage costs and, as a result, came in under budget on expenditures. One of the key initiatives for meeting our objective of working across XCMD to maximise the value of our metallurgical assets was the creation of a high-margin feed steering team, made up of representatives from the Altonorte and Horne smelters and the CRL and CCR refineries as well as marketing representatives from the Dubai and Toronto offices. The goal of the team in 2012 was to deliver revenue improvements by optimising the quantity of high-margin feeds into our facilities, and this target was achieved. 8 Xstrata Copper Canada Sustainability Report 2012

13 The year-end completion of the progressive rehabilitation of the closed Kidd Metallurgical site was a milestone in our history. This was a tremendous undertaking that involved removing equipment, dismantling buildings, disposing of hazardous materials and collecting and transporting scrap metal and other materials for reuse and recycling, as well as closing and capping the jarosite pond. Almost $300,000 worth of equipment and supplies was donated to local organisations and First Nations communities. Not only was the project completed on time and on budget, there were also no safety or environmental incidents. Soil remediation will be the final phase of the work, but that will only occur once the Kidd Mine and Kidd Concentrator cease operations. On the environmental front, we continue to make good progress through ongoing investments and process improvements. At Kidd Operations, we have invested more than $4.5 million over the past two years in environmental projects to reduce risks of non-compliance and have achieved water, greenhouse gas (GHG), and energy reduction targets recommended by the Mining Association of Canada. The Horne Smelter and the CCR Refinery are both aging plants that require substantial capital spending to meet current environmental standards. In 2012, we completed a multi-year phase I plan for arsenic reduction at the smelter at a cost of $20 million, which resulted in a significant improvement in ambient air quality. However, there is more work to be done and we have earmarked $43 million for environmental improvements at both the Horne Smelter and the CCR Refinery in the next five years. These operations are tightly integrated as the Horne Smelter provides up to two-thirds of the refinery s feed. Our challenge is to minimise environmental impacts while expanding the electronics recycling business and treating more complex concentrates as we seek to secure the future of these plants. People and Communities Developing our culture and our workforce was a priority in Within XCMD, there was a strong emphasis on establishing a clear vision and mission for this new division and aligning people and processes to realise our full potential as an integrated organisation. One of our goals was to encourage the sharing of best practices across the organisation through online portals, networks and global teams. Many employees are now publishing their work and research findings on the intranet for the benefit of others. We are genuinely excited by the potential of these initiatives to build relationships and generate breakthrough ideas. At the mine, we made a decision a couple of years ago to hire employees to do certain jobs rather than outsourcing the work as a means of better managing costs and safety performance. We have since added approximately 250 employees, some of whom worked at the Kidd Metallurgical site or Xstrata s Brunswick Mine and others who are former contractors. As a large, global organisation, Xstrata Copper can offer employees compelling career opportunities. We have introduced various initiatives to capitalize on this advantage, including the new Technical Talent Development Programme (TTDP), which has opened doors for Canadian employees. TTD is an exchange programme for Xstrata Copper sites that gives technically skilled employees the opportunity to work in another country for several months. In 2012, Kidd Mine and Australia hosted one resource from their respective operation. All metallurgical sites will participate in an exchange in Kidd Mine will send three people to South America next year as part of the programme and host four individuals at the mine. The objective is for each site to participate in at least one exchange per year. We enjoy good relations with the communities in which we operate and we strive to meet their needs and help them build capacity to sustain themselves in the event that our operations cease. At Timmins, we are working with community groups to identify potential future economic uses for the closed Kidd Metallurgical site. Since 2007, we have invested $1.75 million in non-profit organisations and projects that contribute to community capacity building and sustainability. This past year, we conducted a biannual survey at each operating site to assess community perceptions of Xstrata Copper and potentially guide our community involvement activities over the coming years. Looking Ahead While we expect 2013 to be another challenging year for the copper business, we are confident in our ability to generate significant value for our company and our many stakeholders. Lastly, we would like to take this opportunity to thank our employees for their focus, dedication and contribution this past year. Sincerely, Bruce Anderson Executive General Manager Xstrata Copper Marketing Division Tom Semadeni General Manager Kidd Operations Stronger Together 9

14 How We Manage Sustainable Development The principles of sustainable development are integral to our business model and guide our daily decision-making. We are committed to balancing economic, health and safety, environmental and social considerations when managing our business to ensure the long-term viability of our operations and our host communities. In 2012, under Xstrata plc management, we operated in line with Xstrata s comprehensive SD Framework that aligned with international standards, including the International Council on Mining and Metals (ICMM) sustainability principles and guidelines; the UN Global Compact; the UN Declaration of Human Rights; the Voluntary Principles on Security and Human Rights; and relevant ISO standards. In addition, we were guided by Xstrata Copper s Definition of Purpose, Strategic Objectives and Values, which provided an overarching vision and strategic road map for managing our global business. Throughout the year, we continued to take a systematic approach to setting targets, monitoring performance and reporting against our SD commitments and targets. We also regularly participated in internal and external audits to ensure that we continued to comply with Xstrata s Business Principles, Code of Conduct, Global Policy on Bribery, Fraud and Corruption, SD Policy and 17 SD Standards. Our SD performance was monitored and evaluated by the Xstrata Copper SD Committee, which met monthly. Performance was also regularly reported to the Xstrata Executive Committee through Xstrata Copper s board of directors. The Executive General Manager of XCMD represents Canada s Horne Smelter and CCR Refinery on Xstrata Copper s SD Committee and is responsible for establishing and implementing SD strategies and management systems across the division. Kidd Operations is represented by the Chief Executive of Xstrata Copper. The General Manager of Kidd Operations is responsible for implementing SD strategies and managements systems across the site. Governance Structure Determining Materiality Our most material issues are those topics that have the potential to affect the long-term success of our business or the sustainability of the economies, environments and communities in which we operate. To identify our material issues, we consider: risks recorded in our risk registers; feedback from key internal and external stakeholders; specific issues arising from the management of our business; specific issues raised by our employees; company-specific issues raised directly or indirectly by external stakeholders such as governments, communities, NGOs, investors and the media; challenges faced by the mining industry, locally and globally, raised in industry associations and forums; Xstrata Copper s SD Policy and SD Strategy and Management Framework; Xstrata Group s Business Principles and SD Policy and Standards; indicators and topics included in the GRI G3 Guidelines, the principles of the International Council on Mining & Metals (ICMM), the GRI Mining and Metals Sector Supplement and other best-practice guidelines and initiatives. From this exercise, we determine the issues on which to report, seeking to present a view of our sustainability performance that is accurate, clear and balanced. Xstrata plc Xstrata Copper Board Xstrata Copper SD Committee Xstrata Copper Executive Committee Divisional Management Operations/ Projects CEO, Xstrata Copper Executive General Manager, Xstrata Copper Marketing Division General Manager, Kidd Operations General Manager, Horne Smelter General Manager, CCR Refinery General Manager, Finance & Commercial General Manager, Environment, Site Rehabilitation and Resource Conservation General Manager, Strategy & Improvement Manager, Health & Safety and SD Assurance Manager, Human Resources Manager, Corporate Affairs Legal Counsel 10 Xstrata Copper Canada Sustainability Report 2012

15 Managing Risks All sites and key functional areas document their principal risks, as identified through stakeholder engagement, audits, surveys, incident reporting procedures and trend analyses, legal compliance systems and other sources. Each identified risk has a corresponding response that either enhances the opportunity or (more commonly) reduces the threat. Risks range from legal changes and compliance to health and safety, environmental, customer, community, equipment and human resource risks. Identified risks are aggregated in the divisional risk register and regularly monitored. We have also put in place a risk auditing programme. In 2012, the lack of significant and reportable findings suggests that our risk management programmes have matured. In addition, the scores reflected higher implementation and evaluation of formal control systems, with 38% achieving a level 4 rating (formal control system implemented, evaluated and sustained) and 62% achieving a level 3 rating (formal or informal control or processes established to manage the risk) Audit Plan Risk Control Audit Summary Rating - 4 Rating CCR Refinery awarded the Grande Mention prize from the Mouvement québécois de la qualité Our CCR Refinery was awarded the Grande Mention prize from the Mouvement québécois de la qualité for outstanding performance in quality and the application of best management practices. In accepting the award, Marcel Faucher, General Manager of the CCR Refinery, stated: "At the CCR Refinery, quality is an organisation-wide concern and this award recognises the efforts of all the men and women who work here every day and who are the main reason for our success." With an emphasis on sustainable development, the CCR Refinery has developed a broad array of management tools in the past few years that focus on prevention, continuous improvement and exemplary performance in every aspect of its operations. Backed by measurable goals, rigorous standards and procedures inspired by industry best practices, the CCR Refinery s approach has produced remarkable results. Not only has the CCR Refinery realised improvements in health, safety and energy use; it has also achieved major gains in productivity, thereby enhancing its competitiveness and profitability. Rating Rating We also conducted SD compliance audits to evaluate adherence to our SD standards and procedures. Scores were favourable with 47% achieving a level 4 rating and 53% achieving a level 3 rating. SD Compliance Assurance Summary Rating Rating Rating - 2 Rating From left: Luc Piché, Bob Leclair, Pierre Lemire, Naomie Fournier, Alain Bilodeau, Marcel Faucher, Guylaine Gasse, Luc Fortin, Jacques Pageau, Arun Majumdar, Yves Beaudry, Isabelle Marinho Rating 4: Formal control system implemented, evaluated and sustained. Rating 3: Formal or informal control or processes established to manage the risk. Rating 2: Meaningful attempts to manage and control activity or issues through the limited implementation of effective formal or informal control systems and processes. Rating 1: Initial attempts to manage activity or issues, but no effective implementation of formal or informal control systems or processes. Rating 0: No formal or informal control systems or processes to manage activity or issues. Stronger Together 11

16 Sustainable Development Assurance We participate in internal and external assurance activities to ensure compliance with our SD Policy and Standards and continuously improve performance. These activities also ensure that SD targets are in place for relevant issues, monitoring systems are robust, and our reporting is material, accurate and timely. In 2012, all Canadian operations underwent an Xstrata plc audit on the 17 SD Standards. Results show progress at the Horne Smelter and Kidd Operations while they remain at par at the CCR Refinery. SD Assurance Scores Site2010* Kidd Operations 72%* 69%* 72% CCR Refinery 71%* 76%* 75% Horne Smelter 74% 76%* 79% * Internal audits Key SD Challenges and Opportunities Climate Change We recognise that the future effects of climate change including increased regulation, higher energy costs and physical impacts such as drought and flooding represent a significant business risk. We seek to be as energy efficient as possible to minimise our greenhouse gas (GHG) emissions and reduce operating costs. There is currently uncertainty around climate change legislation and treaties that are being introduced at the international, national, provincial and local levels. In Québec, the Regulation Respecting the Cap-and-Trade System for Greenhouse Gas Emissions took effect in 2012 and will affect the first group of companies as of January 1, This initiative was initially part of the Western Climate Initiative, which included 11 Canadian provinces and territories and four American states. So far, only the Québec government implemented GHG cap and trade, which limits the trading of emissions to Québec companies only. Cost increases are expected at both the Horne Smelter and the CCR Refinery. Because of the unique nature of its business, the Horne Smelter obtained a specific intensity calculation for carbon emissions from end-of-life electronic materials recycling. Talent Management As the mining industry prospers and with the implementation of mining projects in Canada and around the world, more and more companies are competing for professionals with mining-related skills and experience. To ensure the success of our business, we must be able to attract and retain top talent. Costs More than 60% of the expansion of metallurgical capacity since 2000 has taken place in China. Low operating costs at Chinese facilities put pressure on the competitiveness of smelting and refining operations worldwide, including Xstrata s. Behaving Ethically Xstrata Copper employees, contractors and business partners have a responsibility to act ethically and in accordance with our Business Principles and associated Code of Conduct. Our Code of Conduct describes our policies on topics including gifts and hospitality; payments to public officials; specific areas or situations that may present the risk of the occurence of bribery and fraud; and dealing with specific business issues in a transparent and ethical manner. In accordance with our Global Policy on Bribery, Fraud and Corruption, we do not tolerate any incidence of bribery, fraud or corruption committed by employees or others, either from within or outside the organisation. We take immediate and serious action against those committing a fraud. In 2012, no employees were terminated for non-compliance with Xstrata Business Principles. The Ethics Line and Xstrata Business Principles are promoted at our sites through newsletters, television communication systems, bulletin boards, and internal websites. In addition, Kidd Operations created an anonymous telephone line for employees, contractors and local residents and has placed a comment box at the main entrance. The full version of Xstrata s Business Principles, Code of Conduct and Global Policy on Bribery, Fraud and Corruption are available at In 2012, Xstrata s Ethics Line was promoted at all Canadian locations through a new poster campaign. The Ethics Line is a confidential telephone line, operated independently by Expolink, that employees, contractors and suppliers can use to report any breach of our Business Principles, Code of Conduct, policies or applicable legislation. Xstrata provides a toll-free phone number in every country in which it operates. The number for Xstrata Copper Canada is The Ethics Line can also be accessed online at 12 Xstrata Copper Canada Sustainability Report 2012

17 Conflict-Free Gold Policy To remain on the London Bullion Market Association (LBMA) Good Delivery List and comply with the Organisation for Economic Co-operation and Development (OECD) guidelines for conflictfree gold, XCMD commenced a process of obtaining conflictfree gold certification. A policy and procedures were developed to ensure that gold produced at the CCR Refinery is not linked to human rights abuses and does not support armed conflict, money laundering or terrorist financing. The site will be audited for compliance with the OECD standards by an LBMA-approved auditor in early We expect to obtain certification before the end of the year. Participating in Public Policy Xstrata plays an active role in a number of international and national industry organisations and multi-stakeholder groups, through membership, funding, provision of expertise and participation in committees and working groups. In 2012, the primary public policy activity of Xstrata Copper s Canadian operations involved submissions to the Québec government on the provincial Regulation Respecting the Cap and Trade System for Greenhouse Gas Emissions. Although we have been granted an exemption from the regulation for emissions derived from the recycling of secondary materials at the Horne Smelter, we requested that the government also consider the sizeable, earlier emissions reductions achieved at the CCR Refinery and the Horne Smelter. Towards Sustainable Mining As a member of the Mining Association of Canada, Xstrata Copper Canada supports the association s Towards Sustainable Mining (TSM) initiative, aimed at increasing public trust in the mining industry s ability to manage environmental and social issues. TSM has clear performance indicators and targets in the areas of tailings management, energy use and greenhouse gas management, external outreach and crisis management. Frameworks have also been developed for biodiversity protection, aboriginal relations and health and safety. More information is available at Xstrata Copper Canada is a member of the following industry organisations: Mining Association of Canada Canadian Institute of Mining, Metallurgy and Petroleum British Columbia Mining Association Québec Mining Association Ontario Mining Association Ontario Prospectors Association International Council of Mining and Metals International Copper Association International Copper Refining Group Institute of Scrap Recycling Industries International Precious Metals Institute Canadian Copper and Brass Development Association Copper Development Association Conseil pour la réduction des accidents industriels majeurs Association québécoise pour l hygiène, la santé et la sécurité du travail Workplace Safety North Mining Diesel Emissions Council MISA (Mines, Innovation, Solutions, Applications) Natural Resources Canada Thiosalts Consortium Ontario Ministry of Training, Colleges and Universities Industrial Accident Prevention Association Mouvement québécois de la qualité Association industrielle de l est de Montréal Association québécoise des consommateurs industriels d électricité Chambre de commerce et d industrie de Rouyn-Noranda Chambre de commerce de la Pointe-de-l Île Chambre de commerce de l Est de Montréal Chambre de commerce du Montréal métropolitain Fédération des chambres de commerce du Québec Table de concertation de l industrie métallurgique Timmins Chamber of Commerce Timmins Economic Development Corporation Conseil du patronat du Québec Conseil patronal de l environnement du Québec Canadian Payroll Association Canadian Mining Innovation Research Organization Deep Mining Research Consortium Canadian Mining Innovation Research Organization Centre for Excellence in Mining Innovation International Fault Slip Control Research Initiative Centre for Excellence in Mining Prospectors and Developers Association of Canada Mining Legislative Review Committee Porcupine Northeastern Ontario Mining Safety Group Timmins 2020 Steering Committee Canadian Mineral Analysts Stronger Together 13

18 2012 Scorecard and 2013 Targets Safety 2012 Target Performance 2013 Target Fatalities Xstrata Copper Canada LTIFR < < 0.29 TRIFR < < 3.01 DISR < < 70 Fatalities CCR Refinery and Recycling LTIFR < < 0.79 TRIFR < < 2.41 DISR < < 77 Fatalities Horne Smelter LTIFR < TRIFR* < < 1.40 DISR < < 14 Fatalities Kidd Operations LTIFR < TRIFR* < < 3.2 DISR < < 67 Fatalities Closed Sites LTIFR TRIFR DISR * Targets were revised following the implementation of the Xstrata Copper Marketing Division. Health and Safety 2012 Target Performance 2013 Target Leadership and competent leaders Safety leadership division Safety leadership sites Controlled work environment Safety cultural assessment survey Finalise medical examination and clinical testing protocols. Finalise high-hazard activity control protocol self-assessment tool. Upon release of the tool, complete self-assessment against division high-hazard activity control protocols. Incorporate management actions into site business plans to address gaps identified in 2009 risk control audits. 2% of outstanding issues at Kidd Operations. Establish a baseline of our safety culture within the division. Achieved Achieved Achieved Achieved Achieved No further action No further action No further action No further action No further action Business continuity Develop business impact analyses for all sites. Achieved No further action Crisis management New initiative for 2013 Risk management New initiative for 2013 Revise and evaluate crisis management programme at all sites. Establish compliance with Xstrata Copper s Common Systems. 14 Xstrata Copper Canada Sustainability Report 2012

19 Environment 2012 Target Performance 2013 Target Fines and penalties Zero Two Zero Category 3, 4 or 5 incidents Zero Zero Zero Regulatory non-compliance incidents Sulphur dioxide capture/treatment at the Horne Smelter Energy intensity (energy/tonne of product, Gj/t) targeting a 5% overall reduction from 2007 to 2012 Carbon intensity (GHG/tonne of product, CO 2 -e t/t) targeting a 1% per year reduction from 2011 to 2016 > 95% 95.5% > 95% CCR Refinery Horne Smelter Kidd Operations CCR Refinery Horne Smelter Kidd Operations Water intensity (water consumption in 000 litres/tonne of product) targeting a 1% per year reduction from 2011 to 2016 Closed Sites, Kidd Operations rehabilitation Reduce potential impact on human health and community complaints CCR Refinery Horne Smelter Kidd Operations Conclude building demolition and jarosite pond rehabilitation. Achieved Submit the action plan for approval by the government, and initiate activities to achieve a target of arsenic concentration in ambient air to <100 ng As/m 3 /y at Horne. No further action Plan submitted in 2012; obtain ministry approval and start implementation in Deliver expected environmental performance Community relations New treatment for selenium in CCR Refinery s effluent. New initiative for 2013 Develop successful relations and memorandum of understanding with First Nations close to Kidd Operations. Achieved Start extensive testing for the replacement of CCR Refinery s baghouse. Ongoing relations/outreach regarding the mine s tailings closure plan and consultations about Kidd Operations community perception study; MOU yet to be signed due to higher priority projects in the region. Social 2012 Target Performance 2013 Target Set aside a minimum 1% Donations Set aside a minimum 1% of pre-tax profit. Achieved of pre-tax profit. Gauge community perceptions Conduct community perception study. Achieved Baseline needs analysis Complete implementation of revised Community Partnership Programmes. Kidd Operations to conduct a baseline analysis in Achieved Achieved Not applicable, conducted every two years. No further action Horne Smelter will conduct a baseline analysis in 2013 (every four years). Stronger Together 15

20 Economic Contribution Xstrata Copper s Canadian operations make a significant contribution to the communities in which we operate by providing jobs, skills and training; paying taxes and royalties; buying goods and services from local businesses; supporting community development programmes; and by developing and improving local infrastructure. In this way, we play an important role in improving local health, education, employment and living standards and we work with local governments, communities and other stakeholders to share these benefits in a sustainable manner Highlights Kidd Mine achieved 97% of its annual production targets, producing 34,375 tonnes of copper and 78,094 tonnes of zinc, despite the continued closure of a section of the mine. Managing costs in a challenging economic climate was a top priority for our metallurgical facilities. While output from the Horne Smelter, the CCR Refinery and the Recycling sites declined from 2011 due to various operational and supply issues, the facilities contained expenses extremely well, coming in under budget for the second year in a row. The CCR Refinery commenced a new operating plan that could increase annual copper cathode production from 285,000 tonnes to 308,000 tonnes as of 2013 as well as add nine new jobs. The additional feed would be sourced from XCMD s Altonorte Smelter in Chile. The facility will also expand gold and silver production with feed from Xstrata Copper s Townsville, Australia, copper smelter and from Xstrata Zinc s Brunswick Smelter in Bathurst, New Brunswick. 16 Xstrata Copper Canada Sustainability Report 2012

21 Economic Contribution Building Strong Communities We want to contribute to the social and economic development of the regions in which we operate. Among the ways we do this is by hiring local people and procuring goods and services from local businesses. In 2012, we paid $259.9 million in wages and benefits to employees, the large majority of whom live in the surrounding communities. We also spent nearly $110 million on goods and services from regional suppliers, accounting for close to 60% of total purchases. When price and quality are equal, preference is always given to local suppliers. Community donations and sponsorships are another way in which we contribute. In 2012, Xstrata Copper s Canadian operations committed nearly $850,000 to large and small community projects. Please see page 26 for more information. Securing Our Future One of the first initiatives of XCMD was to establish a high-margin feed steering team whose goal was to identify and deliver $10 million in revenue improvements by securing the highest-margin feed for each metallurgical operation. The team was made up of representatives from the Altonorte (Chile) and Horne smelters and the CRL (Australia) and CCR refineries as well as marketing representatives from our Dubai and Toronto offices. We are pleased to report that the team surpassed its goal, identifying and implementing 10 high-margin feed opportunities that increased margins significantly in A Vital Role in Québec The Horne Smelter and the CCR Refinery employ more than 1,200 people and are the only independent copper-processing facilities in operation in Canada. Located in Québec, the operations of these two facilities are closely integrated, with the Horne Smelter supplying two-thirds of the anodes processed by the CCR Refinery. They also support the Québec manufacturing industry, sourcing feed from, and supplying products to, many other Québecbased processing companies. Focus on Kidd Operations Kidd Operations today comprises Kidd Mine and Kidd Concentrator, both of which will continue to operate until the mine reaches the end of its productive life. The mine is the deepest mine below sea level in the world. We have invested more than $100 million in the mine in recent years to expand the underground workings to the 9,600-foot level and extend its life to Across the organisation, our 2020 Vision programme encourages employees to come up with ideas for extending the mine life even further to Kidd Concentrator produces copper and zinc concentrate and treats all ore from Kidd Mine. We are exploring custom milling opportunities to take advantage of excess capacity. In 2010, we made a decision at Kidd Operations to hire employees to do certain jobs (rather than outsourcing the work) as a means of better managing costs and safety performance. We have since added approximately 250 people, including 87 from the closed copper and zinc plants, 11 from Xstrata's Brunswick Mine (zinc) and former contractors. Following the closing of the Kidd Metallurgical site, a local adjustment centre was opened to find alternative employment. Alternative Uses for the Kidd Metallurgical Site With rail and road links, access to water, power and natural gas, and approximately 280 hectares of available land, the closed Kidd Metallurgical site presents an excellent opportunity for new economic development and growth in the area. We actively support alternative uses for this land, and we are working with the City of Timmins, the Timmins Economic Development Corporation and other organisations to generate ideas and encourage proposals. About the Copper Industry The copper industry comprises two major activities: mining, which has enjoyed favourable pricing in recent years; and smelting/refining, which treats ore concentrates into anodes and cathodes used by companies to manufacture vital products for society. More than 60% of the expansion of metallurgical capacity since 2000 has taken place in China. Low operating costs at Chinese facilities put pressure on the competitiveness of smelting and refining operations worldwide. Direct Economic Contribution (excluding Closed Sites) Cost of all goods, materials and services purchased from suppliers ($ million) Purchase of regional goods and services ($ million) Kidd Operations Horne Smelter Canadian Copper Refinery (CCR) Xstrata Recycling Total $ $53.31 $28.69 $1.03 $ $59.22 $30.44 $19.19 $0.81 $ % spent on regional goods and services 57.0% 57.1% 66.9% 78.6% 58.6% Cost of utilities (power, water, rail, etc. - $ million) $27.20 $22.54 $13.67 $0.60 $64.01 Wages and benefits ($ million) $ $65.01 $56.89 $6.02 $ Local taxes ($ million) $3.40 $2.26 $1.60 $1.04 $8.30 Community donations and sponsorships (C$ thousand, including in-kind) Infrastructure provided for public benefit (C$ thousand, included in total contributions) $82.51 $551.5 $ $0 $ $0 $0 $0 $0 $0 Capital investments ($ million) $35.78 $42.84 $8.58 $0.23 $87.42 Stronger Together 17

22 Health and Safety 18 Xstrata Copper Canada Sustainability Report 2012

23 Health and Safety We strive to achieve injury-free, safe work environments and we hold our management accountable for safety performance and providing visible leadership. We ensure that our employees and contractors receive training to improve their safety knowledge and skills and make them aware that they have a responsibility to themselves and their family and friends to work and act safely. We detect and eliminate or mitigate conditions that pose a risk to the health and safety of our workplaces and neighbouring communities. We ensure that every task undertaken in our operations has a safe system of work defined and that our people have the right tools and equipment to complete tasks safely and productively. We also monitor our employees health, wellbeing and fitness for work through our comprehensive screening programmes. When we detect an unsafe condition or when a safety incident occurs, we investigate immediately and take the necessary action to eliminate the risks involved. We ensure that our employees and contractors are aware of safety initiatives and issues, and we undertake regular safety audits across our business to continuously improve our safety standards, practices and performance Highlights Lost-Lime Injuries declined from five in 2011 to two in In the month of September, both the Horne Smelter and the CCR Refinery achieved three million hours without an LTI. Kidd Operations closed the year with 2.8 million hours worked without an LTI. At the former Kidd Metallurgical site, employees and contractors involved in closure and reclamation activities worked more than 57,000 hours without an LTI. The Horne Smelter received the prestigious F.J. O Connell Trophy for the third time in four years. The award is presented annually by the Québec Mining Association to companies demonstrating the best safety performance in the province. The Horne Smelter was recognised in the surface operations, transportation and primary metals category. Total Recordable Injuries (including MTI, LTI and RWI) Custom-Built Equipment Contributes to Zero Harm Objective For the very first time, Paul Guenette from Kidd Mine is driving a new custom-built unit to install underground fans more efficiently and safely. The equipment took two years to develop and replaces six-yard scoop trams, which were not designed for this kind of work. The new unit is also used as a pipe handler, a scissor deck and a flatbed. Safety Performance Safety performance was the SD highlight of There were only two LTIs, one at the CCR Refinery and one at the closed Gaspé site. Our continuously improving safety record is a reflection of the importance that each and every person places on working safely, starting with the management teams who set the tone. We continue to introduce new initiatives to build on our performance. For example, Kidd Mine initiated the SafeStart programme in 2012, which is designed to help employees improve their personal safety at home and on the job. Despite our record, we will not be satisfied until we achieve our goal of zero harm. One of the areas of concern in 2012 was an increase in the number of first-aid incidents at our metallurgical facilities, which could be a precursor to more serious injuries. To address the issue, we enhanced certain safety controls and standardised the near-miss programme in order to collect valuable data on incidents that have the potential to be serious. Safety Performance Lacerations 12 Strains/sprains 5 Fractures 8 Burns 2 Bruises 1 Total TRIFR LTIFR DISR Stronger Together 19

24 High-Hazard Activities To improve safety performance, we have developed protocols that clearly define the safety controls that must be in place when performing a high-hazard activity. All sites track high-hazard activities and complete self-assessments to identify and address any gaps in their controls. Number of Incidents Contact with energy 7 Working at heights 2 Environment natural hazards 2 Contractor Safety While we do not differentiate between contractors and employees in tracking the total number of accidents, we keep separate statistics in order to identify gaps in our management systems. Contractors registered 39% of all recordable injuries in 2012, down from 48.6% in Nine were medical treatment injuries, one was a restricted work injury and one was a Lost-Time Injury. Sites continued to integrate a service called Cognibox into their contractor management programmes. Cognibox enables us to screen contractors to ensure that they meet our safety and training requirements prior to arriving on-site. Occupational Health Occupational health prevention plans at our sites include audiogram testing and education to ensure proper hearing protection at work and at home and education on the prevention and proactive assessment of musculoskeletal programmes. We know that the key occupational health challenges facing our operations are exposure to hazardous substances, long-term employment in physical roles that could contribute to degenerative musculoskeletal conditions and working in dusty, hot and noisy environments. Each site is required to develop annual health and safety plans, as well as ergonomic programmes. The plans include: Monitoring arsenic, lead, asbestos, beryllium, silica, heat stress and noise Individual counselling for employees whose biological monitoring results are above a certain level Regular medical checkups for employees sensitised to beryllium Prevention/risk control training on topics such as exposure to beryllium, transporting hazardous materials and working in confined spaces Engineering controls, such as ventilation Safety Culture In 2012, sites participated in a safety cultural awareness survey to identify the level of employee safety engagement. In comparison with benchmark data from other heavy-manufacturing companies, the results indicated that our level of safety culture is well above others. With this data, we can now target for improvement areas with lower scores and move to best practice in safety Front-Line Employees Scoring 1-2 Serious concerns 3-4 Targeted areas for improvement 5 Strengths Priorities for 2013 Crisis management Risk management Leadership Safety Benchmark Training Communication Employee Engagement XCMD Revise and evaluate crisis management programme for all sites. Establish compliance with Xstrata Copper s Common Systems Xstrata Copper Canada Sustainability Report 2012

25 Health and Safety CASE STUDY Safer Together: A Year for the Record Books Alain Trudel, Horne Smelter In September 2012, the Horne Smelter and the CCR Refinery celebrated remarkable milestones three million hours worked without a single Lost-Time Injury, while Kidd Operations registered 2.8 million hours worked without an LTI. Tremendous efforts at all sites contributed to these results. Since 2006, the Horne Smelter has achieved a 95% reduction in recordable injuries and reduced LTIs from 22 to zero in Many initiatives contributed to this achievement: improvements to safety management systems and processes; increased discipline around the use of work permits; additional safety training; improved contractor management; implementation of the Positive Attitude Safety System (PASS) and the Prevention Reflex programme; and the reinstatement of Health and Safety Week. These activities certainly contributed to the year-end record of 3.5 million hours worked without an LTI at the smelter. During the same period, the team at the CCR Refinery has collectively instilled a culture of safety prevention and continuously improved its safety practices from the management of major risks to the attention given to the most routine tasks. In addition to programmes like PASS or the analysis of hundreds of activities to reduce risks, more frequent safety meetings with all employees, including a meeting before each shift for plant employees, helped put safety top of mind for everybody. Kidd Operations adopted the SafeStart programme in This advanced safety awareness and safety skills training programme not only addresses workplace safety but also on-the-road and home safety. It allows everyone in the family to participate. From on-the-job-training to online courses and DVDs geared to families and children, the programme focuses on both state of mind and tasks. This performance from sites is the result of making safety an absolute priority and implementing programmes and activities to support safe practices. More than anything, the attitudes and behaviours of each person have made the difference. Stronger Together 21

26 Our People David Lerikos, Kidd Operations Our ability to attract, develop and retain the best talent has been fundamental to our business success. In addition to providing development and training opportunities and safe and healthy workplaces, we have a strong set of corporate values, which are based on integrity, trust, personal accountability, respect and care for others Highlights We spent $8 million in training to equip our employees to excel at their jobs and advance their careers, an increase of 43% compared to Our new Technical Talent Development Programme is an exchange programme for Xstrata Copper sites that gives professionals an opportunity to work on a project in another country for several months. A new smelting and refining best practices portal encourages employees to share and collaborate. It has proven to be a great way to create a virtual discussion on a plant issue and to share research findings with other employees. Over the past two years, we have added approximately 250 jobs at Kidd Mine by hiring employees instead of outsourcing work. As a result, more time than usual has been invested in training new people on Xstrata standards and expectations. Kidd Operations also reinstated the apprenticeship programme for electricians and mechanics. Our competency framework and recruitment strategy were aligned to reflect our strategic objectives and the "Xstrata Difference" launched in early in Total Training Investment 10 3, $8 million $7 million $6.7 million $5.6 million $8 million Training per Permanent Employee 3,000 2,500 2,000 1,500 1, Engaging Employees $2,816 $2,570 $3,052 $2,532 $3, We firmly believe that our success hinges on the ideas, talents and contributions of our people. It is critical for us to engage our employees and ignite their passion for their work. We regularly perform employee engagement surveys to assess how well we are doing and address opportunities to improve. The results of our 2010 engagement survey has formed the basis of our human resources action plan for the past two years. In 2012, we conducted a safety cultural survey to evaluate employee engagement in this important part of our culture. The results were encouraging and can be found on page Xstrata Copper Canada Sustainability Report 2012

27 Mentoring Women Marie-Pier Bédard was the first woman in Xstrata Copper to benefit from the Women s Executive Network s mentoring programme, in which members mentor other women in various organisations. The programme provides networking and learning opportunities so that young women can benefit from the experiences of more senior female executives. According to Marie-Pier, her mentor has helped her career aspirations and provided valuable counsel on business and other issues. Sharing Best Practices One of the goals of the new XCMD organisation is to encourage the sharing of best practices, both across our division and across the larger Xstrata Group. In 2012, Xstrata Best Practices intranet portals were launched as collaborative sites that enable employees from Xstrata s copper, zinc and nickel business units to seek advice from colleagues and share information, ideas and best practices. These multilingual forums are open to all employees working across all disciplines, including operations, maintenance, health and safety, environment and metallurgy. Of special interest to XCMD employees is the smelting and refining best practices portal, which has proven to be a great way to create a virtual discussion on a plant issue or opportunity or to share a presentation or research findings with other employees. Leadership Development Focus on Culture In 2012, we added a new module to our Leadership Development Programme (LDP) focused entirely on XCMD culture. The session addresses the strategic framework of XCMD, and topics include key success factors in achieving our goals, such as who we are, how we make a difference, entrepreneurship and business acumen, synergies and best practices, and communication. A pilot conducted at the Horne Smelter was a great success. Workshop participants felt that the Horne Smelter could make a difference within XCMD by maintaining leading health and safety performance, strengthening the Horne Smelter s position worldwide to meet increased competition, managing people and technology to realise the full potential of employees, and securing social acceptability at the start of any initiative. The new leadership module, called "Xstrata Copper Marketing Strategy Execution," will be rolled out to all facilities early in Technical Talent Development Our new Technical Talent Development Programme (TTDP) is creating invaluable career experiences for Xstrata employees and helps us leverage the core technical competence that exists across our business. TTDP is an exchange programme for Xstrata Copper sites that gives professionals in a technical field an opportunity to work on a project in another country for 12 to 18 months. Participants are matched to a project based on their professional development needs. Approximately 40 people will be selected annually to work in the areas of mining, processing, geology or the environment. In 2012, we ran a successful pilot for mining engineers. All metallurgical sites will participate in the programme in 2013 to develop our internal talent by sending and welcoming participants around the world. Kidd Mine will send three people to Xstrata Copper s South American operations as part of the programme and host four individuals at its site. Labour Relations All employees at Xstrata Copper s Canadian operations have the right to collective representation and are free to join a union of their choice. In March, the unionised employees of the Horne Smelter and management concluded an agreement for a three-year labour contract. CASE STUDY Hiring Women at the CCR Refinery Our People Kathy Megalizzi, Technician, Environment Over the past five years, 17% of permanent hires and 20% of student hires at the CCR Refinery have been women. However, we would like to see these numbers grow. To achieve this goal, we introduced a variety of initiatives to promote the field of metallurgy to women in the Greater Montreal Area and highlight our interest in hiring them. For the past two years, we have participated in Metallurgy Week, an annual event held across Québec to promote the metallurgical industry. Several women from the CCR Refinery have joined in the event and helped showcase women in the industry. In 2012, we initiated a project aimed at reaching out to external groups such as career counsellors in order to increase the pool of potential female candidates for jobs. Twenty career counsellors from 12 organisations responded to an invitation to tour the plant and listen to presentations about our culture and commitment to sustainable development and the opportunities for women. Attendees also received CCR Refinery recruiting materials clearly outlining the policies, work conditions and types of jobs that are available in the industry. Feedback was highly positive, with most participants indicating that they would recommend metallurgy as a career choice for women. While the full impact of these initiatives remains to be seen, we were pleased to learn that the CCR Refinery was a recipient of the Hélène-Vandal award for promoting the inclusion of women in its workforce. Presented every two years, the award recognises companies in the Québec metallurgical industry that have distinguished in this regard. Stronger Together 23

28 Communities Rick Fiset, Coach of Timmins Majors hockey team and Kidd Operations employee 24 Xstrata Copper Canada Sustainability Report 2012

29 Communities We work closely with our host communities to maximise the benefits of our activities and minimise or avoid potential negative impacts. We engage openly and honestly with all our stakeholders and respond to all community complaints and inquiries through fair and equitable grievance and conflict-resolution processes. Our community investment activities aim to enhance the social and economic development of local communities in a manner that avoids their dependency on our operations over the long term. Our social involvement plans are established through extensive engagement with communities and other stakeholders and are coordinated with local government and development organisations where possible Highlights We invested close to $850,000 in community initiatives. There was a significant reduction in the number of noise and air quality complaints at the Horne Smelter because of targeted actions at the site. Results from community perception surveys at each site were positive, indicating what we have done right and where our communities would like us to focus in the future. Aboriginal awareness and consultation training was conducted across Kidd Operations. 80% of the people affected by the closure of the Kidd Metallurgical site found alternate employment within one year. Community Dialogue We engage regularly with our many different stakeholders through meetings, presentations, citizens committees, newsletters and other communication forums. In 2012, 82 stakeholder meetings took place across our operations with 1,687 people attending. Both the Horne Smelter and the CCR Refinery have citizens committees that meet two to five times a year to discuss site operations. These interactions give us a good sense of the issues and concerns of the community and provide valuable input for our social involvement programme. Kidd Operations increased the number of community-based meetings and presentations to local organisations. The primary focus of the meetings was Kidd Operations Community Partnership Programme (CPP). In addition, the environmental group hosted two meetings of a community-based air monitoring team. The meeting in May included a tour of the closed Kidd Metallurgical site reclamation activities. We are planning to increase community engagement even more in Workshops were held in Timmins to provide aboriginal awareness and consultation training to members of Kidd Operations Management, Purchasing, Human Resources, Communications and Environmental departments since they are most likely to be engaged with the aboriginal communities through stakeholder engagement, community partnerships, training, service and supply contracts, and environmental/ regulatory permit consultations. The sessions were facilitated by Robert Laboucane of Aboriginal Awareness Canada, who has been delivering this type of training for over 30 years. A Helping Hand At Kidd Operations, we took important steps in 2012 to expand local community participation in our Community Partnership Programme (CPP). We conducted several presentations to explain how the programme works and encourage groups to apply for funding. We also increased the number of community members on the application evaluation committee. As a result, nearly $1.5 million in application requests were received. While we could not grant every single request, more community involvement and rigorous evaluation criteria helped ensure that the limited funds available were directed to the areas of greatest need. Through this process, we also came to realise that many community groups did not fully understand the meaning of sustainable community development and the types of initiatives that we are interested in supporting. To answer this need, the Kidd team developed a workshop to assist non-profit organisations in developing an understanding of sustainable community development and exploring options to make their projects sustainable. The workshop was piloted with a group of college students studying community development and will be revised for delivery to the broader community in Transition in Timmins The closing of the Kidd Metallurgical site in 2010 resulted in the direct loss of approximately 670 jobs. While the reduction would normally have a significant economic impact on Timmins, several global developments mitigated the effect, including high gold prices, the reactivation of several mines, and significant discoveries in the James Bay lowlands that increased the demand for skilled miners, engineers and tradespeople. According to the Kidd Action Centre a government-funded project to find employment for displaced workers over 80% found work within a year. Employee Volunteers We applaud our employees who graciously volunteer their time to help our communities. Many site management team members sit on community boards and act as advisers to local institutions and associations. Other people are actively involved in community clubs and non-profit organisations. In 2012, Horne Smelter managers and superintendents spent 1,830 hours volunteering in the community, an increase of 7%. Our Community Service Fund is a grant programme that recognises employee volunteers. Employees can apply for a grant of up to $1,000 for the organisation where they volunteer at least 40 hours of their time during the year. In 2012, $25,000 was granted to community groups through the Community Service Funds, thanks to the efforts of 25 of our employees. Our Stakeholders At the division or national level, environmental, economic development and health authorities are Xstrata Copper Canada s main external stakeholders. At the site level, stakeholders include: Municipal authorities Provincial and federal elected representatives Local environmental, economic development and health authorities Educational institutions Environmental groups First Nations communities Citizens groups Local suppliers and contractors Local media Non-profit organisations We identify local stakeholders on the basis of criteria such as their location relative to the site, their involvement with the site, their influence on site operations or activities, and their role in the community. Stronger Together 25

30 Supporting Local Initiatives We provide donations, sponsorships, in-kind contributions and support to communities through our Community Partnership Programme. These contributions totalled close to $850,000 in Listed below are contributions valued at $10,000 or more. Horne Smelter Ressourcerie Bernard-Hamel (food bank) to support renovation of roof and windows École La Source to encourage students from dropping out of school Fondation du Cégep de l Abitibi-Témiscamingue Fondation du Centre de santé et des services sociaux de Rouyn-Noranda Total donations of $551,500 $100,000 (first instalment of a three-year, $240,000 donation) $100,000 (first instalment of a three-year, $250,000 donation) $35,000 (final instalment of a three-year, $100,000 donation) $32,500 (final instalment of a three-year, $90,000 donation) Commission scolaire Rouyn-Noranda for the purchase of musical instruments for elementary school children and math $25,000 kits for kindergarten students Festival de musique émergente $20,000 Conseil régional en environnement de l Abitibi-Témiscamingue $15,000 Salon du livre à Rouyn-Noranda $15,000 L Écart... Lieu d art actuel contribution to a building renovation fund $10,000 Arrimage mobile Creating links with youth from rural areas $10,000 Festival du cinéma international en Abitibi-Témiscamingue $10,000 Osisko en lumière, festival pyromusical $10,000 Winter festival $10,000 Rouyn-Noranda Capitale cultural events $10,000 CCR Refinery Total donations of $215,135 Projet Télésoins du CSSS de la Pointe-de-l Île (remote patient monitoring) Centre Viomax $12,000 Centre communautaire Hochelaga $10,000 Je Réussis (programmes/activities that encourage students from dropping out $10,000 of school) Institut de recherche en biologie végétale $10,000 Fondation du Dr Julien $10,000 Maison Adhémar-Dion (palliative care) $10,000 $50,000 (second instalment of a three-year, $200,000 donation) We re on the Web The CCR Refinery launched a new website ( to introduce people to the organisation, explaining what we do, what we stand for and what it is like to work at the facility. To drive traffic to the site, we held contests for employees and the public, which gave them the chance to win $50 gift cards for correctly answering questions about the CCR Refinery. The contests were promoted at the site, through and in local newspapers. Recycling Day at the Horne Smelter Two new activities were added to the annual Recycling Day at the Horne Smelter in 2012 to mark the site s 85 th anniversary. Following an earlier event in which Horne Smelter employees planted trees in the community, visitors to the site on Recycling Day were invited to plant trees in their name around the company property. We also set up a recruiting kiosk to raise awareness about career opportunities at the Horne Smelter and explain how to apply for a job online. This was the sixth consecutive year for Recycling Day. It has proved to be a highly successful way to get the message out to the community about the Horne Smelter s recycling and sustainable development activities. More than 600 people attended, bringing with them 7.1 tonnes of old electronic and electrical devices for recycling. Community Complaints and Events Community residents and employees are invited to call their local Xstrata Copper site if they have a complaint about the company s operations or to report an event. Each site follows a detailed procedure to ensure that concerns are appropriately addressed. In 2012, we registered 61 complaints and events, compared to 73 the previous year. The improvement is mainly attributable to a significant decline in the number of complaints about odour or fumes at the Horne Smelter. Located adjacent to a residential area, the Horne Smelter faces unique challenges and continuously strives to reduce complaints and improve air quality for nearby residents. Complaints about noise decreased by more than 50% (from five in 2011 to two in 2012) as a result of a number of targeted actions taken to limit noise. We installed signage near the site to reduce vehicle speed in the neighbourhood, and modified several schedules and processes: for example, closing the doors of buildings, planning noisy work for daytime hours, and removing a loud fan from the roof of the concentrator. Complaints about odour at the Horne Smelter decreased by 24%, from 51 in 2011 to 39 in 2012, largely as a result of equipment and process controls working well. In recent years, we optimised the gas collection system and implemented a process for investigating each sulphur dioxide fugitive emissions incident to find the root cause and making the necessary corrections. 26 Xstrata Copper Canada Sustainability Report 2012

31 Communities Number of Complaints/Events Complaints/Events by Category 41 Odour or fumes 8 Fallout damage claims 6 Other 5 Noise 1 Dust 0 Access to property Biking with a Purpose Horne Smelter employee Guy Bilodeau biked across Canada in 2012 to raise money for the Canadian Cancer Society. His ambitious effort brought in $5,575 from the community and employees as well as a matching donation from the company. Recognising Student Achievement To support the education and training of future generations of workers, the Horne Smelter recognises the academic achievements of students at the Cégep de l Abitibi-Témiscamingue. Each year, we are proud to present scholarships to the students who have achieved the highest grades in a variety of subjects. Gabrielle Spiegle-Morin (centre), recipient of the Governor s medal and the Xstrata Copper Horne Smelter scholarship with Sylvain Blais (Director of Education) and Mireille Grenier, Coordinator, Communications and Community Relations at the Horne Smelter CASE STUDY Our Neighbours Speak Johanne Côté, Horne Smelter Every two years, we conduct community perception surveys in the communities near our operations to measure the effectiveness of our community programmes, shape communication plans and focus our donations and resources on local priorities. Research is conducted through telephone surveys and the 2012 survey results were encouraging. In Montréal-East, the majority of people who knew of the CCR Refinery felt that we provided a safe work environment, showed respect for our employees and were committed to reducing our environmental impact. The most well known of our community investments was our $200,000 donation to the Projet Télésoins du CSSS de la Pointede-l Île (last instalment planned for 2013), a remote-patient monitoring that has been publicly recognised for its technological innovation and effectiveness in improving public access to health services. The top two priorities suggested for future community investment were health services and environmental protection. In Rouyn-Noranda, the Horne Smelter was highly regarded for its contribution to economic development and creating a safe workplace and for upholding all laws and regulations. Many respondents noted improvements in our efforts to reduce our environmental impact and communicate with the community. Respondents identified the areas of social development, employment and housing as priorities for future community investment. In Timmins, Xstrata was viewed positively overall as a fair employer and a safe place to work and there were no major concerns about our environmental and health and safety performance. In addition to the perception survey, Kidd Operations conducted a community- and stakeholder-needs assessment. based on an analysis of demographics, public consultations, focus groups and one-on-one interviews. Among stakeholders were employees, contractors and suppliers, government and NGOs, community and health services organisations as well as aboriginal-rights holders. Generally, respondents confirmed the perception survey s findings that the site supports community projects and organisations and that it could help increase understanding of sustainable development. Suppliers and local organisations mentioned that support to help them build their own capacity in this regard would be appreciated while others suggested additional employee participation in community events, especially in leadership roles. The feedback from both studies will provide useful insight for the development of stakeholder engagement and social investment plans for Kidd Operations. Stronger Together 27

32 Environment Xstrata Recycling Farms In 2009, Patricia Gemma at Xstrata Recycling in East Providence found that gardening was becoming increasingly popular with businesses as a way to relieve stress and give back to the community. A shift leader and avid gardener, Paul Medeiros, along with other employees, tend to four raised beds full of organically grown tomatoes, cucumbers, peppers, zucchini, green beans, peas and lettuce. Expansion is planned for 2013! 28 Xstrata Copper Canada Sustainability Report 2012

33 Environment Xstrata Copper s Canadian operations are committed to mitigating the environmental impacts of our activities. Our environmental management approach is centred on preserving and restoring the natural environment throughout the life cycle of our operations. This is underpinned by a risk management approach that requires the implementation of control measures for mitigating possible identified risks. If environmental incidents do occur, we determine the cause and take immediate action to remediate and prevent a recurrence. In addition, our company s North American recycling business is helping to extend the useful life of valuable base metals and reduce electronic scrap, which is an increasing source of environmental concern and landfill waste Highlights We completed the rehabilitation of the closed Kidd Metallurgical site. Kidd Mine maintained ISO certification of its environmental management system. The site has been certified since We initiated C$3 million upgrades to Kidd Mine s water treatment plant. The number of non-compliance environmental incidents declined from 19 in 2011 to 12 in 2012, a 37% reduction. A C$3.4 million investment at the CCR Refinery selenium recovery plant reduced the selenium concentration in a waste stream by 90% and enabled us to meet stringent new limits on final effluent quality. Since 2010, the installation of a variable speed pump at the Horne Smelter reduced by 35% the amount of fresh water withdrawn for industrial usage from nearby Lac Dufault. We replaced the aging vehicle fleet at the Horne Smelter with eight hybrid cars and 27 low-fuel-consumption trucks. Hybrid cars produce 70% fewer GHG emissions than typical conventionally powered new vehicles. A new effluent polishing pond constructed at the Horne Smelter number 5 tailings site, at a cost of C$13 million, enables us to maintain operations and ensure compliance with final effluent quality regulatory standards. In Case of Emergency To test its emergency-response plan, the CCR Refinery simulated the spill of a bag of nickel sulphate into an on-site sewer and assessed how well its teams performed in discovering the spill, alerting internal resources, informing the authorities, clean-up and reporting. The exercise was filmed for later review and learning. After the exercise, feedback was gathered from all participants to ensure that the right procedures had been followed. Environmental Incidents The number of non-compliance environmental incidents declined from 19 in 2011 to 12 in This is partly due to better environmental operating performance and efforts deployed at the Horne Smelter to reduce Daphnia magna (a water flea) toxicity in effluents. All tests for trout showed compliance. We are pleased to report that at Kidd Operations, the mine has passed all effluent toxicity tests for the past 13 years and the concentrator has passed all toxicity tests for rainbow trout and Daphnia magna for more than four and a half years. At the Horne Smelter, we had one non-compliance for effluent toxicity test for Daphnia magna and the panel of independent experts we hired has yet to identify the root cause of this issue. The CCR Refinery discharges effluent into the municipal waste waterworks. Non-compliance incidents are usually related to ph control over short periods of time and have limited impact on the environment. In 2012, we also had four incidents of selenium concentration above the new criteria in the effluent, which seemed to be related to rain washing the industrial yard. We were required to pay two fines totalling $14,500: a nonenvironmental, C$2,500 fine related to the operating hours defined in the Horne Smelter s Quarry Certificate of Authorisation and a USD$12,000 environmental fine related to a U.S. Department of Transportation charge for inadequately securing caps on acid tankers from the Horne Smelter (no spillage occurred). Number of Non-Compliance Incidents CCR Refinery Horne Smelter Kidd Operations Xstrata Recycling (2 sites) Closed Sites (15 sites) Total Municipal Hazardous and Special Waste Day in Timmins: City of Timmins Environmental Compliance Coordinator Scott Tam (centre) with volunteers Stephanie Thibault (left) and Danielle Wieteska (right) from Kidd Operations Environment Department in front of the waste receiving and sorting area. Stronger Together 29

34 Climate Change and Energy Use As intensive users of electricity and fossil fuels, Xstrata Copper s Canadian operations contribute to the generation of greenhouse gases (GHG). We strive to reduce our impact by minimising energy use and, where possible, reducing the carbon intensity of the energy used in our operations. Energy consumption remained essentially the same as in Absolute GHG emissions declined slightly, from 99,145 CO 2 -equivalent tonnes in 2011 to 95,080 tonnes in 2012, due to ongoing energy-efficiency projects. The main contributor to the improvement was Kidd Mine, where we optimised a fan for heating cold winter air sent underground, thereby reducing natural gas consumption. Among energy projects, the CCR Refinery lowered the volume of excess air in burners used in the production of nickel sulphate, which in turn reduced natural gas consumption and GHG emissions. In addition to the fan project at the mine, Kidd Operations completed an energy audit of its administrative building, which led to various energy-saving measures. The site also initiated a concentrate dryer burner study to evaluate new burners that would use energy-efficient pulsed-firing technology. The Horne Smelter replaced its aging vehicle fleet with eight hybrid cars and 27 low-fuel-consumption trucks. Hybrid cars produce 70% fewer GHG emissions than typical conventionallypowered new vehicles, as well as lowering fuel costs. The team is also exploring the use of electric vehicles, although their research to date has indicated that the technology is not sufficiently advanced to meet the Horne Smelter s needs. Of the electricity purchased for use at our sites, 39% was generated from renewable sources such as hydro. The remainder was generated from either fossil fuel (35%), nuclear power (20%) or other sources (6%). Energy Consumption (Intensity) From Year to Year Xstrata Copper Canada Energy Use by Source billion 4.5 billion 3.4 billion 2.6 billion 2.6 billion 1.7 billion 1.6 billion 1.1 billion 0.8 billion 0.8 billion Electricity kilowatt hours Xstrata Copper Canada Emissions (CO 2 -Equivalent Tonnes) (CO 2 -e tonnes) 400, , , ,000 Natural gas megajoules (Total CO 2 -e tonnes) Direct Indirect XCC total 700, , , , , , ,000 Energy Saved Operation in 2012 (intensity) CCR Refinery (0.078) GJ/tonne cathode Percent Improvement Over 2011 Energy Saved in 2011 (Intensity) (1.3%) (0.106) GJ/tonne cathode Percent Improvement Over 2010 Energy Saved in 2010 (Intensity) (1.7%) (0.17) GJ/tonne cathode Percent Improvement Over 2009 (2.6%) Horne Smelter (0.8) GJ/tonne anode (6.5%) 0.9 GJ/tonne anode 4.37% (2.48) GJ/tonne anode (18.0%) Kidd Mine (0.029) GJ/tonne of ore mined Kidd Operations (0.068) GJ/tonne of ore milled * Updated from 2011 report ** Closure of Kidd copper and zinc metallurgical plants in 2010 (5.59%) (0.038) GJ/tonne of ore mined (7.58%) (0.839) GJ/tonne of ore milled (7.94%)* (0.334) GJ/tonne of metal in ore (48%)** (4.0%) 30 Xstrata Copper Canada Sustainability Report 2012

35 Air Emissions Apart from greenhouse gases, sulphur dioxide (SO 2 ) from our metallurgical operations is one of our most significant emissions to air. At the Horne Smelter, we achieved our goal of capturing and treating over 95% of SO 2. At the Horne Smelter, we completed a five-year plan to lower arsenic concentrations in ambient air, which resulted in a 70% reduction. We have now submitted a new plan for government approval that aims to reduce arsenic emissions by another 50%. If approved, engineering studies would begin in Another project undertaken at the Horne Smelter in 2012 involved installing a new stainless steel pipe at the sulphuric acid plant to minimise the buildup of ferrous sulphate and associated particulate emissions that occur during start-up after the annual maintenance shutdown. We are also testing new cleansing methods involving dry ice or diluted hydrogen peroxide instead of water and sand to dislodge accumulated scales of sulphates. The CCR Refinery has implemented a number of measures over the past few years to reduce fugitive emissions of arsenic, nickel and acid mist into the work environment and ambient air. However, we continue to be challenged with arsenic emissions and will test a new capture hood for fugitive emissions in This will lead to the testing of a new baghouse in 2014 to replace the one that has been in place since The test will help us determine the best operational parameters for the new installation. Detailed engineering is expected to follow in The baghouse would become operational in At Kidd Operations, air-quality readings in 2012 from four monitoring stations surrounding the facility were within current air limits and guidelines, except for one day in December when limited snow cover and strong winds blowing across the freeze-dried tailings created airborne dust. Two regular meetings of an Environmental Monitoring Team comprising representatives from our local community, aboriginal community, facility labour and government were held in May and November. The meetings are a forum to provide updates on planned and ongoing air emissions reduction projects and ambient air quality results at the former Kidd Metallurgical facility (now the Concentrator site). Meetings profiled recent progressive reclamation and revegetation projects, a tour of the tailings area, as well as ongoing practices to control fugitive dust from open areas and roads. Xstrata Copper Canada Air Emissions CO (carbon monoxide) ( 000 kilograms) Hydrofluorocarbons (HFCs) (kilograms) Sulphur dioxide (SO 2 )** ( 000 tonnes) Total particulates ( 000 tonnes) SO x Oxides of sulphur ( 000 tonnes) NO x Oxides of nitrogen (tonnes) * (est.) *** * The increase in carbon monoxide was registered at the Horne Smelter. It falls within normal operating range and is a function of the ratio of oxygen/ carbon in the metallurgical gases. ** Restated from 2008 to 2011 *** Stack measurement operation in 2009 vs. conversion factor or estimation in previous years. Annual Average Ambient Air Concentrations Near Kidd Metallurgical Site Hoyle Road - AMS#1 (1.6 km east of plant) Environment Ontario Limit or Guidelines Sulphur dioxide ppb Lead µg/m 3 * Cadmium µg/m 3 Arsenic <0.007 < µg/m 3 Total suspended particulate matter µg/m 3 Particulate matter (PM10) µg/m 3 * New limit for lead implemented in 2010; previously was 0.4 µg/m 3. The Kidd Mine Main Access Road was seeded as part of the site s progressive rehabilitation programme. This project is the start of a site beautification initiative that also promotes new habitat for a diversity of plants and animals. The geese love their new migration resting place! Stronger Together 31

36 Water Management All of our sites have water management plans in place. Most of the water used by our operations is raw surface water, and approximately 3% comes from potable water sources. At Kidd Mine, the water is reused more than six times. We have set a goal of reducing water intensity, or consumption per tonne of product produced, by 1% per year from 2011 to CCR Refinery We invested in extra tanks, pumps, instrumentation, ventilation and pollution abatement technology at the selenium recovery plant to reduce the amount of selenium pumped to our wastewater treatment plant by approximately 90%. This in turn enabled us to meet more stringent limits on selenium concentrations in industrial effluent imposed by the City of Montreal as of January With this investment, the plant is also producing more saleable selenium (used in a range of industries from glassmaking to pharmaceuticals) and has been able to reduce waste disposal costs. Horne Smelter We draw water from Lac Dufault for the City of Rouyn-Noranda and for our smelter operations. The installation of a variable speed pump contributed to a 37% decrease in water intensity (per tonne of anode) from 2010 levels (a decrease of 16% from 2011 or 15.5% water intensity). The new pump enables us to limit water withdrawal to only that which is necessary. Kidd Operations Water intensity was reduced by 4% in 2012 compared to The Ontario Ministry of Environment conducted a planned Permit to Take Water inspection of records at the concentrator for the years 2008 to 2011 and found no issues. We received the required approvals and began construction on the mine buffer storage project to improve water treatment and reduce risks from extreme storm events. Environmental effects monitoring of the Kidd Concentrator tailings final effluent on the Porcupine River was completed with the collection of sediment and water-bug samples, as well as water quality monitoring. Results showed the presence of a diverse fish community with high catch rates, including trout, a rare species in this river whose presence is an indicator of a healthy environment. An environmental effects monitoring study of our effluent in Kidd Creek is scheduled for Xstrata Copper Canada Total Water Withdrawal by Source (megalitres) Raw groundwater consumed Raw surface water consumed ,000 32,900 29,885 21,452 20,037 Waste and Tailings Management All of our sites have waste management plans to reduce, reuse, recycle and responsibly dispose of the waste they generate. Tailings are pumped into secure engineered impoundments, known as tailings dams, which are regulated by government standards. Water from the tailings dams is treated to meet regulatory limits before it is discharged to the environment. In addition to regular and annual inspections conducted by our employees or third-party experts, tailings dams are reviewed for technical integrity by independent experts every three to five years. Hazardous wastes are shipped to accredited recyclers or disposal facilities depending on the nature of the waste. Waste rock from Kidd Mine is reused in underground operations or stored and managed on-site according to strict environmental regulations. At the Horne Smelter, the closure plan for all active and inactive tailing sites was approved by the Ministry of Natural Resources in Québec. Also in 2012, we constructed a new polishing pond at the Noranda number 5 tailings site to receive water from the Quémont number 2 tailings site. The new pond enables us to maintain operations and compliance with final effluent quality regulatory standards. At Kidd Operations, we expanded the tailings area east seepage containment pond and constructed a new ditch system to handle runoff from large storm events. The larger capacity of the pond mitigates the risk of the pond overflowing. We also switched to a single-stream recycling programme for domestic waste in 2012, which made it easier for employees to recycle. By year-end, we had diverted 2,362 tonnes of waste from landfill. Xstrata Copper Canada Waste Type and Disposal (tonnes, unless otherwise noted) Hazardous, off-site disposal Hazardous, on-site disposal Hazardous, recycled/reused Non-hazardous, off-site disposal Non-hazardous, on-site disposal Non-hazardous, recycled/reused 6,000 1,300 1,544 1,462 1, ,450 5,500 1, ,079 5,300 2,500 2, ,310 2,400 2,852 2, ,743 5,132 Total water used 34,800 33,570 30,685 22,207 21,062 Total water recycled or reused 13,300 14,000 11,417 10,438 13, Xstrata Copper Canada Sustainability Report 2012

37 Environment Biodiversity All of our sites have biodiversity management plans for protecting and conserving biodiversity. We also support biodiversity initiatives within our local communities. CCR Refinery We made a donation to a local environmental group, the Corporation Aménagement de la Rivière Assomption, for the purchase of GPS equipment for locating and protecting endangered plant species. All sites completed the Mining Association of Canada s Towards Sustainable Mining self-assessments for All protocols are now at our target level of A or higher. Horne Smelter In partnership with the Fondation Hydro-Québec pour l environment, the City of Rouyn-Noranda and the Société du loisir ornithologique de l Abitibi, we are supporting a project aimed at protecting the habitat of the red-necked grebe through the erection of nesting platforms and signage and a public information campaign. Kidd Operations In partnership with the Ontario Ministry of Natural Resources, Ontario Power Generation, Lakeshore Gold, Timmins Fur Council and Club Navigateur, we are helping re-establish lake sturgeon, a designated species of special concern, in their historic habitat. The project started in 2002 when adult sturgeons marked with radio transmitters were transferred back into the habitat. Barn swallows nesting in the rafters of the Kidd Mine surface shop We got involved in 2011 and have continued to provide funding and personnel to support a follow-up fish transfer and monitoring programme. Evidence from recent studies suggests that this re-introduction of sturgeon is working. On a related topic, we have installed eight bat boxes across Kidd Operations that will eventually be suitable roosting sites and are planning on installing nesting platforms for raptors (birds of prey) within the region. A pair of peregrine falcons took up residence at Kidd Mine during the summer of One falcon was seen again in 2012; it is not known if the pair has returned as only one falcon has been confirmed. Peregrine falcons were once considered extinct in the province and are now considered Threatened provincially and of Special Concern nationally. This means that the species is protected from being killed, harmed, harassed, possessed, collected or sold. Their nesting areas are also protected. Xstrata Copper is working with the Ministry of Natural Resources to monitor the success of these birds recovery in Ontario and to locate their nesting areas, which must be protected. Stronger Together 33

38 Closure Plans All mines have finite lives and require safe, orderly closure processes. Our mine and metallurgical sites have a conceptual closure plan that is regularly reviewed and updated. The forecasted costs of rehabilitation and restoration are reflected in our financial registers throughout the life of the operation. We updated the Kidd Mine closure plan in 2010 as well as the Kidd plant site and jarosite pond closure plans in The tailings management area closure plan was reviewed in 2012 and will be updated in We are planning to progressively cover the Kidd tailings area with compatible granular material. As responsible stewards of our mining materials, we have enlisted two experts in soil cover design who are providing technical advice on how to design and place a final closure cover that has an adequate thickness to minimise long-term potential for acidity generation, stabilises cover and underlying tailings materials from surface and wind erosion, and improves the appearance of the site. By incorporating their specialised knowledge into the closure plan ahead of time, we will reduce any risks associated with implementation and performance. Closed Sites We actively manage closed rehabilitated sites, which are monitored by local employees who ensure that all on-site facilities and equipment, such as water treatment plants, are in good working order and that dams are in proper condition. In 2012, we completed the rehabilitation of the former Kidd Metallurgical site. This was a tremendous undertaking that involved removing equipment, dismantling buildings, disposing of hazardous materials and collecting and transporting scrap metal and other materials for reuse and recycling, as well as closing and capping the jarosite pond. Almost $300,000 worth of equipment and supplies was donated to local organisations and First Nations communities. Not only was the project completed ahead of time and under budget but there were no reportable safety or environmental incidents. Soil remediation will be the final phase of the work, but that will only occur once Kidd Mine and Kidd Concentrator cease operations. Part of our effort at the closed Kidd site includes water quality and acute toxicity monitoring of the Three Nations Creek, which historically received surface runoff from the jarosite pond area. A remediation plan to control zinc and copper concentrations in the creek and address the issue of temporary acute toxic conditions was implemented in Two dams were constructed in the creek to create a water cover over the banks that had the highest zinc concentrations. Ongoing monitoring in 2012 showed a significant improvement in water quality with zinc concentrations down by 88% and no acute toxicity events. In 2012, we completed the remediation of the former Topley Concentrate load-out facility in northern British Columbia. The facility was a concentrate shipment facility supporting the former Granisle Mine operations, located adjacent the Buckley River salmon fishery. Product Responsibility As there are many producers and users of copper, and it is sold in a global marketplace, we believe that meeting our product stewardship commitments is best done in collaboration with our key stakeholders, including governments, industry associations, the scientific community and civil-society groups. Much of our engagement with product stewardship is done via industry associations. Xstrata Copper is a member of the International Copper Association (ICA) and we are actively involved with its efforts to ensure copper is used safely and sustainably through our participation in several of the ICA s advisory and steering committees. Our products have material safety data sheets (MSDS) that provide pertinent information on product composition, toxicology relating to human health and the environment, handling, storage and exposure issues and recommendations for managing spills and disposal. In addition, we inform our employees, contractors, customers and other stakeholders about these potential hazards and product handling best practices. In 2012, revised MSDS sheets for Kidd concentrate products were posted on the Kidd Operations website and communicated to customers and rail transporters. The revised information sheets conform to the globally harmonised system soon to be adopted in Canada. The former Kidd Metallurgical site rehabilitated 2013 Priorities Reduce potential impact on human health and community complaints Deliver expected environmental performance Targets/Actions Ambient air to <100 ng As/m 3 /year at Horne Smelter Obtain approval of plan by government and initiate activities to further reduce arsenic level. Continue efforts to reduce fugitive emissions (SO 2, dust, noise) at Horne Smelter. Start extensive testing for the replacement of CCR Refinery s baghouse. 34 Xstrata Copper Canada Sustainability Report 2012

39 Environment CASE STUDY From left: Troy Miller, geologist (Xstrata Copper); Ray West (Lake Babine Nation, Levert employee); Clay Pountney (Lheidli T'enneh Nation, Xstrata Copper) Consultation and Collaboration at the Closed Bell Mine Property Xstrata Copper Canada owns and maintains the Bell Mine property, a former open-pit copper mine located on the north shore of Babine Lake in northern British Columbia. The mine ceased operations in 1992 and, since that time, the pit has been used to safely store site runoff water. However, the pit is expected to reach capacity in 2018, at which time the water will require treatment before being discharged to Babine Lake. To address the situation, we decided to operate a pilot water treatment plant for three weeks in 2012 to evaluate the treatability and effluent quality of the pit water in preparation for a full-scale water treatment plant. We recognised from the start that the input of local communities would be essential to the success of the project. Water quality, fish and fish habitat in Babine Lake are significant concerns of the nearby First Nations communities (Lake Babine Nation and Yekooche First Nation), residents of the village of Granisle and local environmental interest groups. We initiated contact in the early planning stages and maintained a dialogue throughout the project, through meetings, open houses, site tours and the sharing of key planning documents. These get-togethers gave us an opportunity to explain our plans and to hear concerns about the project as well as gather input for decisions on matters such as the discharge locations for the water treatment plant. We also hired three Lake Babine Nation members for short-term employment in Two people assisted with the aquatic baseline studies and one person worked at the pilot plant. Once the water treatment plant has been constructed, we may hire First Nations members to operate it. The results of the pilot plant were positive and will help ensure that the water treatment plant is designed specifically for that environment. Importantly, the project is also helping us strengthen ties with our community stakeholders. Stronger Together 35

40 GRI Index This table indicates where to locate information related to GRI G3 indicators and principles in this report or other publications. Indicator Description Details Strategy & Analysis 1.1 Statement from the most senior Page 6 decision-maker about the relevance of sustainability to the organisation and its strategy 1.2 Description of key impacts, risks Page 12 and opportunities Organisational Profile 2.1 Name of organisation Xstrata Copper Canada 2.2 Primary brands, products and/or services Copper, zinc, gold, silver, precious metals, sulphuric acid 2.3 Operational structure Page Location of organisation s headquarters Toronto, Ontario, Canada 2.5 Countries where the organisation operates Canada, United States, Malaysia 2.6 Nature of ownership and legal form Page Markets served Primary markets served are copper markets in North America, Europe and Asia. 2.8 Scale of the reporting organisation Page Significant changes from one reporting period to the next The changes made to the scope, boundaries or measurement methods since the last report are noted where applicable Awards received in reporting period Page 1 Report Parameters 3.1 Reporting period for information provided January 1 to December 31, Date of most recent report April Reporting cycle Annual 3.4 Contact point for questions Name: Louis-Philippe Gariepy, [email protected] 3.5 Process for defining report content Page Boundaries of the report Kidd Operations (formerly Kidd Mine and Metallurgical sites), Horne Smelter, Canadian Copper Refinery, Xstrata Recycling operations and Closed Sites 3.7 Specific limitations on the scope Inside front cover or boundaries 3.8 Basis for reporting on joint ventures, Not applicable subsidiaries, leased facilities, outsourced operations and other entities 3.9 Data measurement techniques All data and calculations included in this report were obtained through procedures that are regulated and aligned with measurement models provided by Xstrata and also take into account technical protocols for indicators as set out in the GRI G3 Guidelines Explanation of the effect of any restatements of information provided in earlier reports 3.11 Significant changes from previous reporting periods to the scope, boundaries or measurement methods applied 3.12 Table identifying the location of standard disclosures 3.13 Policy and current practices with regard to external assurance There are no restatements of previously published data or reporting on joint ventures or subsidiaries that could affect the comparability of reporting periods. Few changes were made to the scope, boundaries or measurement methods since the last report; they are noted where applicable. Page 36 Inside cover Indicator Description Details Governance, Commitments and Engagements 4.1 Governance structure of the organisation 4.2 Indicate whether the Chair of the highest governance body is also an executive officer 4.3 State the number of members of the highest governance body that are independent and/or non-executive 4.4 Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body 4.5 Linkage between compensation and the organisation s performance 4.6 Processes in place for the highest governance body to ensure that conflicts of interest are avoided 4.7 Process for determining the qualification and expertise of board members on economic, environmental and social topics 4.8 Statements of mission or values, codes of conduct and principles 4.9 Procedures for overseeing the identification and management of economic, environmental and social performance 4.10 Processes for evaluating board performance 4.11 Explanation of whether and how the precautionary approach or principle is addressed 4.12 Externally developed economic, environmental and social charters, principles or other initiatives to which the organisation subscribes or endorses 4.13 Memberships in associations and/ or national/ international advocacy organisations 4.14 List of stakeholder groups engaged by the organisation 4.15 Basis for identification and selection of stakeholders 4.16 Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group 4.17 Key topics and concerns raised through stakeholder engagement Page 10 Managed by Xstrata plc Page 1 Pages Managed by Xstrata plc We recognise that there may be significant impacts to the existing natural environment, both temporary and long-lasting, due to the presence of our operations. We use a comprehensive risk-based approach to manage the impacts of our activities. Even in the absence of evidence that environmental degradation is occurring or will occur, we take action to mitigate this possibility. Page 13 Page 13 Page 13 Page 25 Page 25 Pages 26, Xstrata Copper Canada Sustainability Report 2012

41 Indicator Description Details Indicator Description Details Economic Indicators EC1 Direct economic value generated Page 17 and distributed EC2 Financial implications, other risks and Page 12 opportunities to the organisation due to climate change EC3 Coverage of the organisation s defined Employees benefit from a comprehensive benefits plan obligations benefits package including health, medical, dental and disability insurance as well as retirement benefits. EC4 Significant financial assistance received Zero from government EC5 Ratios of standard entry-level wages compared to local minimum wage Entry-level wages at Canadian operations are more than double the minimum wage, although the minimum wage may vary by site because it is set by provincial governments and collective agreements are negotiated locally. EC6 Policies, practices and proportion of spending on locally based suppliers at significant locations Page 17 EC7 EC8 Procedures for local hiring and proportion of senior management hired from the local community Development and impact of infrastructure investments and services provided primarily for public benefit Preference is given to local residents when skill sets are equal. Approximately 95% of the workforce is from the local community. We did not provide support for infrastructure investments and services provided primarily for public benefit. EC9 Significant indirect economic impacts We do not track indirect economic impacts; however, indirect impacts include taxes used by governments to fund infrastructure and social programmes and local spending. MM1 Identification of sites where the local economic contribution and development impact is of particular significance MM2 Value-added disaggregated to country level Environmental Indicators EN1 Materials used by weight or volume (tonnes) Oxygen 3,924 m 3 Silica 142,391 Lime 30,889 EN2 Percentage of materials used that are recycled input materials EN3 EN4 EN5 Direct energy consumption by primary energy source Indirect energy consumption by primary source Energy saved due to conservation and efficiency improvements Kidd Operations and the Horne Smelter are located outside of major cities and are important local employers. Not applicable Other than concentrate, the primary materials used are oxygen, silica, lime and cement. Oxygen and silica are used in the smelting process. Lime is used for treating effluent. Not applicable due to the nature of operations, extracting metals from rock that is subsequently smelted and refined. Page 30 Page 30 Page 30 EN6 Initiatives to provide energy-efficient Not applicable or renewable energy-based products and services and reductions to energy requirements EN7 Initiatives to reduce indirect energy Page 30 consumption and reductions achieved EN8 Total water withdrawal by source Page 32 21,062 megalitres, 95% of which is raw surface water EN9 EN10 EN11 Water sources significantly affected by withdrawal of water Percentage and total volume of water recycled and reused Page 32 Most of the water used by our operations is raw surface water, and approximately 3% comes from potable water sources. Page 32 13,214 megalitres or approximately 63% Environmental Indicators (continued) EN12 Description of significant impacts of activities on biodiversity in protected areas and areas of high Xstrata Copper Canada has no significant impact on biodiversity in these areas. biodiversity value EN13 Habitats protected or restored 1,174.5 hectares of land rehabilitated EN14 Strategies, current actions and future plans for managing impacts on biodiversity Page 33 All sites have biodiversity plans in place. EN15 Number of IUCN Red List species and national conservation list species with 32 species Horne Smelter: rusty blackbird habitats in areas affected by operations (vulnerable), olive-sided flycatcher (near threatened), lake sturgeon, chimney swift, common nighthawk, silver-haired bat, red bat and hoary bat (of least concern) Kidd Operations: rusty blackbird (vulnerable), olive-sided flycatcher (near threatened), peregrine falcon, bald eagle, black tern, great grey owl, chimney swift, common nighthawk, short-eared owl, woodland caribou, eastern cougar, lake sturgeon, snapping turtle (of least concern) CCR Refinery: Northern brown snake, northern water snake, short-eared owl, peregrine falcon, loggerhead shrike, least bittern, silver-haired bat, red bat, hoary bat, eastern pipistrelle All are classed as minor preoccupations. EN16 Total direct and indirect greenhouse gas emissions 307,539 CO 2 -e tonnes EN17 EN18 EN19 EN20 EN21 EN22 EN23 EN24 EN25 Other relevant indirect greenhouse gas emissions by weight Initiatives to reduce greenhouse gas emissions and reductions achieved Emissions of ozone-depleting substances by weight NO 2, SO 2 and other significant air emissions by type and weight Total water discharged by quality and destination Total weight of waste by type and disposal method Total number and volume of significant spills Weight of transported, imported, exported or treated hazardous waste Identity, size, protected status and biodiversity value of water bodies and related habitats significantly affected by discharges of water and runoff No other relevant indirect greenhouse gas emissions other than what is reported on page 31 Page 30 Page 31 Page 31 This data is not reported; aside from exceptions mentioned on page 29, our effluents meet all regulatory requirements. Page 32 Zero Not reported There are no bodies of water and related habitats significantly affected by discharges of water and runoff from our operations. Location and size of land owned, leased, managed in or adjacent to protected areas and areas of high biodiversity value outside protected areas IUCN Operation Location Protected Area Area (ha) Category Ecological Sensitivity Îles de Boucherville National Park 1,000 II National park on island in the St. Lawrence River, 3 km from site High bird concentration and muskrat habitat CCR Refinery Montréal, Québec Bois-d Anjou Nature Park 50 III Park in urban setting, 5 km from site Bois-de-la-Réparation, Pointe-aux-Prairies Nature Park 80 III Park in urban setting, 5 km from site Réserve faunique des Chic-Chocs 113,400 VI Park located less than 1 km from closed mine site Gaspé (closed site) Murdochville, Québec York River 140 VI Salmon river located 1 km downstream from closed mine site effluent Madeleine River 100 VI Salmon river located in different drainage basin 10 km from site Parc de la Gaspésie 80,200 II Closed site 10 km from provincial park Stronger Together 37

42 Indicator Description Details Environmental Indicators (continued) EN26 Initiatives to mitigate environmental impacts of products and services, and extent of impact EN27 EN28 EN29 EN30 MM3 MM4 MM5 MM6 Percentage of products sold and packaging materials that are reclaimed by category Value and number of significant fines and sanctions for non-compliance with environmental laws and regulations Significant environmental impacts of transporting products and other goods and materials Total environmental protection expenditures and investments by type Number or percentage of sites identified as requiring biodiversity management plans, and with plans in place Percentage of products derived from secondary materials Products are managed throughout their life cycle through the Xstrata Standard 14 Product Stewardship Standard. All products brought on-site are reviewed and approved for potential health, safety or environmental impacts through the MSDS and WHMIS approval process. Products recovered, recycled and disposed of are managed according to each site s waste management plan. Not applicable Two fines for a total of $14,500 We use trains as our primary mode of transportation; Norfalco, which is in charge of delivering our sulphuric acid, adheres to the codes of practice of the chemical industry s Responsible Care programme and the Responsible Distribution Process SM. Not reported at the divisional level All sites have biodiversity management plans in place. Close to 25,000 tonnes of copper and two million ounces of precious metals were extracted from 92,833 tonnes of recycled material at the Horne Smelter. Policies for assessing the eco-efficiency Xstrata Copper and Xstrata Copper and sustainability attributes of products Canada SD policies; Xstrata Standard 14: Product Stewardship Management Programme; MSDS review of all products that arrive on site Approach to management of overburden, Page 32 rock, tailings and sludges/residues Indicator Description Details Labour Practices and Decent Work LA1 Total workforce by employment type Executive and senior managers 27 Managers 122 Operational, production and maintenance 1,604 Supervisors, administration and technical 636 LA2 Total number and rate of employee turnover by age group, gender and region (partially reported) The turnover rate is 2.81%. LA3 LA4 LA5 LA6 LA7 LA8 LA9 LA10 Benefits provided to full-time employees that are not provided to temporary or part-time employees Percentage of employees covered by collective bargaining agreements Minimum notice period regarding significant operational changes Percentage of workforce represented by joint management-worker health and safety committees Rates of injury, occupational diseases, Page 19 lost days and absenteeism and number of fatalities Education, training, counselling, Page 20 prevention and risk control programmes regarding serious diseases Health and safety topics covered in formal agreements with trade unions Average hours of training per year per employee by category Full-time employees: Health, medical, dental, life, disability insurance, retirement benefits. Contract employees (less than 6 months service): Basic life insurance only. Contract employees (more than 6 months service): Basic life insurance, basic accidental death & dismemberment, 50% medical and 90% dental 40% We consult with employees in advance of any significant operational change. Minimum notice periods vary and are generally specified in collective agreements or by law. 100% Health and safety committees, personal protective equipment, audits, complaint mechanisms, accident investigations, refusal to proceed with work considered unsafe, training and education 41 LA11 LA12 LA13 LA14 MM12 MM13 Programmes for skills management and lifelong learning Percentage of employees receiving regular performance and career development reviews Composition of governance bodies and breakdown of employees by category according to indicators of diversity Ratio of base salary of men to women by employee category Approach to identifying, preparing for and responding to emergency situations Number of new cases of occupational disease by type and programmes to prevent occupational disease Pages 22, 23 All staff employees Women account for: - 2% of employees aged 30 or less; - 6% of employees aged 30 to 50; - 2.3% of employees aged 50 or more. Ratio of base of salaries between men and women is 1:1. All sites have emergency plans that are coordinated with local stakeholders. Not reported 38 Xstrata Copper Canada Sustainability Report 2012

43 Indicator Description Details Indicator Description Details Human Rights HR1 Percentage and total number of Managed by Xstrata plc investment agreements that include human rights clauses or screening HR2 Percentage of significant suppliers and contractors that have undergone All our suppliers receive a copy of Xstrata s Business Principles. screening on human rights and actions taken HR3 Employee training on policies and 2,028 workers were trained. procedures concerning aspects of human rights HR4 Total number of incidents of Zero discrimination and actions taken HR5 Operations in which the right to exercise freedom of association and collective bargaining may be at risk None Canadian & Québec legislations ensure strict respect of freedom of association. HR6 Operations identified as having significant risk for incidents of Zero The Canadian legislation prohibits child labour. child labour HR7 Operations identified as having significant risk for incidents of forced Zero The Canadian legislation prohibits forced or compulsory labour. or compulsory labour HR8 Percentage of security personnel trained in policies or procedures concerning human rights Not reported specifically for security personnel; a total of 2,028 employees were trained. HR9 Total number of incidents of violations involving rights of indigenous peoples and actions taken Zero Society SO1 SO2 SO3 SO4 SO5 SO6 SO7 SO8 MM7 MM8 Nature, scope and effectiveness of programmes and practices that assess and manage the impacts of operations on communities Percentage and total number of business units analysed for risks related to corruption Percentage of employees trained in organisation anti-corruption policies and procedures Actions taken in response to incidents of corruption Public-policy positions and participation in public-policy development and lobbying Total value of financial and in-kind contributions to political parties, politicians and related institutions Total number of legal actions for anticompetitive behaviour, anti-trust and monopoly practices and outcomes Monetary value and total number of fines or sanctions for non-compliance with laws or regulations Description of significant incidents affecting communities during the reporting period and grievance mechanisms used Description of programmes in which the organisation has been involved that addressed artisanal and smallscale mining Pages Zero All employees receive a copy of Xstrata s Business Principles; CCR Refinery trains new employees and contractors on the principles. There were no incidents of corruption. Page 13. Xstrata, Xstrata Copper and Xstrata Copper Canada participate in many international and national industry organisations and multi-stakeholder groups through membership, funding, provision of expertise, and participation in committees and working groups. Zero Managed by Xstrata plc Zero No significant incidents were reported. Not applicable MM9 Description of resettlement activities Not applicable Product Responsibility PR1 Life-cycle stage in which health and safety impacts of products are assessed for improvement PR2 PR3 PR4 PR5 PR6 PR7 PR8 PR9 Total number of incidents of noncompliance with regulations and voluntary codes concerning product health and safety impacts Type of product and service information required by procedures Total number of incidents of noncompliance with regulations and voluntary codes concerning labelling and product information Practices related to customer satisfaction Programmes of adherence to laws, etc., re marketing and advertising Total number of incidents of non-compliance with regulations and voluntary codes re marketing and advertising Total number of substantiated complaints regarding breaches of customer privacy Monetary value of significant fines for non-compliance with laws Stage gate reviews and the waste management programme ensure that products are managed throughout their life cycle. CCR Refinery has Buy Green procurement guidelines. All products shipped to Kidd Mine are evaluated for eco-efficiency and sustainability attributes through a review and approval process. This includes the evaluation of recyclability, material used, energy consumption and toxicity of the product. All products are approved by the Health, Safety and Environment department. Product stewardship will also benefit from eco-efficiency and sustainability attributes developed by the International Copper Association (ICA). Zero Material safety data sheets include information on product physical and chemical composition, risks to human health, handling, transport, storage and exposure control. Zero Xstrata Commercial and Sales groups for copper and zinc conduct customer surveys. Not applicable Not applicable Not applicable Not applicable MM10 MM11 Number or percentage of operations with closure plans, company policy, stakeholder engagement processes, frequency of plan review and financial provisions for closure Process for identifying local communities land and customary rights and grievance mechanisms used to resolve any disputes Page 34 All operations have a conceptual closure plan. Page 26 Stronger Together 39

44 Table of Key Sustainability Data Economic Contribution Employee salaries and benefits $223 million $253.5 million $259.9 million Corporate Social Involvement (C$) $841,200 $770,000 $849,140 Public Infrastructure Local taxes $10.3 million $7.1 million $8.3 million Percentage of goods purchased locally 62% 65% 59% Total value of contributions to political parties Our People Total workforce 2,913 2,769 2,826 Permanent employees 2,195 2,190 2,351 Full-time contractors Percentage of employees covered by collective agreements 43% 43% 40% Percentage of employees hired from local area 97% 97% 95% Fatalities Total Recordable Injury Frequency Rate (TRIFR) Lost-Time Injury Frequency Rate (LTIFR) Disabling Injury Severity Rate (DISR) Health and safety prosecutions Health and safety fines Total investment in training $6.7 million $5.6 million $8.0 million Investment in training per permanent employee $3,052 $2,532 $3,402 Sustainable Communities Community complaints Environmental Performance Total energy use Total water use (megalitres) 30,685 22,573 21,062 Total recycling and reuse of water (megalitres) 11,417 10,438 13,214 Direct greenhouse gas emissions (CO- 2 equivalent tonnes)* 221, , ,540 Total green house gas emissions (CO- 2 equivalent tonnes)* 455, , ,539 Total sulphur fixation at the Horne Smelter 95.7% 94.4% 95.5% Category 3 (moderate) incidents Category 4 (serious) incidents Category 5 (disastrous) incidents Prosecutions Fines * Restatement for years 2010 and Graphic Design Tattoo Communication 40 Xstrata Copper Canada Sustainability Report 2012

45 Glossary Anode A rectangular plate of about 99% copper, cast in a shape suitable for refining by the electrolytic process. Biodiversity An abbreviation of "biological diversity," which means the variability among living organisms from all sources, including land-based and aquatic ecosystems and the ecosystems of which they are a part. Carbon intensity Emissions of CO 2 -equivalent tonnes per tonne of product. Cathode A rectangular plate of high-purity copper produced by electrolytic refining, which is melted by our customers into commercial shapes such as wire rods, billets and ingots. Closure plan A formal document detailing a costed conceptual outline of how an operation will be closed, taking into account the options available to meet safety and environmental standards. For property having ceased operation in the past, the closure plan focuses primarily on rehabilitation and, where needed, surveillance, monitoring and maintenance. CO 2 -equivalent Carbon dioxide equivalent is a standard metric by which greenhouse gases other than carbon dioxide are converted to CO 2 equivalence to facilitate comparisons and quantification. Copper concentrate A fine, powdery product of the milling process containing 25% to 40% copper, sometimes with traces of precious metal. Concentrates are treated by smelters. Direct energy Forms of energy that are consumed within operational boundaries. Disabling Injury Severity Rate (DIFR) A measure of the number of days lost due to disabling injuries per one million hours worked. Energy intensity Energy consumption per tonne of product. Environmental incident An environmental incident is classified on a scale from 1 to 5 representing the extent of environmental impact. Category 1, Negligible: An incident that has caused negligible, reversible environmental impact and requires very minor or no remediation. Category 2, Minor: An incident that has caused minor, reversible environmental impact and requires minor remediation. Category 3, Significant: An incident that has caused moderate, reversible environmental impact, with short-term effect, and requires moderate remediation. Category 4, Serious: An incident that has caused serious environmental impact, with medium-term effect, and requires significant remediation. Category 5, Disastrous: An incident that has caused disastrous environmental impact, with long-term effect, and requires major remediation. Global Reporting Initiative (GRI) Globally applicable sustainability reporting guidelines to assist corporations in reporting on the economic, environmental and social performance of their operations. HSEC Health, safety, environment and community. Indirect energy Energy produced outside operational boundaries that is consumed to supply energy for the operation (e.g., purchased electricity). International Union for the Conservation of Nature (IUCN) Based in Gland (Switzerland), IUCN is the world s largest and most important conservation network. Its mission is to influence, encourage and assist societies throughout the world to conserve the integrity and diversity of nature and ensure that any use of natural resources is equitable and ecologically sustainable. ISO The International Organization for Standardization s standard for environmental management systems. Land rehabilitated Land disturbed by operational activities and then reshaped and revegetated. Lost-Time Injury Frequency Rate (LTIFR) A measure of the number of Lost-Time Injuries (occupational injuries and diseases that result in days away from work on any rostered shift subsequent to that on which the injury occurred, including fatalities) per one million hours worked. Materiality Disclosing all information of significant concern to stakeholders for assessing our economic, environmental and social performance. Occupational illness Any abnormal condition or disorder, other than one resulting from an occupational injury, caused by exposure to factors associated with employment. Particulate emissions Controlled discharges from stacks containing microscopic solids in the form of dust. Restricted work injury An occupational injury or illness that results in a person being physically or mentally unable to perform all or any part of his/ her normal assignment during any rostered shift. SD standards Xstrata s 17 SD Standards, which set out corporate SD performance expectations for each project and operation and against which sites and commodity businesses are independently audited through the Xstrata SD Assurance Programme. Six Sigma A disciplined, data-driven methodology for improving the effectiveness or efficiency of operating processes. It assumes a high level of employee involvement through project teams. Statement of Business Principles Xstrata s Statement of Business Principles sets out the ethical framework for the way we work globally. Sulphur dioxide A gas generated during the smelting of most sulphide ores; it is either converted into commercial sulphuric acid or released into the atmosphere in the form of a gas. Sustainable development "Development that meets the needs of the present without compromising the ability of future generations to meet their own needs," as defined by the UN World Commission on Environment and Development, The ultimate goal is to attain balance among social equity, environmental protection and economic prosperity throughout all business activities. Tailings The fine fraction of waste rock remaining after the mining and on-site processing of mineral resources. This consists of finely ground particles and traces of process reagents and chemical residues. Tailings are piped into engineered impoundments known as tailings dams. Total Recordable Injury Frequency Rate (TRIFR) A measure of the number of Lost-Time Injuries (including fatalities), restricted work injuries and medical treatment injuries per one million hours worked. Water intensity Water consumption per tonne of product. Stronger Together 41

46 We value your comments and feedback. To tell us what you think about Xstrata Copper Canada s Sustainability Report, or for more information about our company, please contact: Xstrata Copper Canada 100 King Street West, Suite 7200, P.O. Box 405, Toronto, ON, M5X 1E3, CANADA Tel Fax If you have any questions or comments about this report, please contact: Louis-Philippe Gariepy, Manager, Corporate Affairs: [email protected] Horne Smelter, Rouyn-Noranda, Québec: Canadian Copper Refinery (CCR), Montréal-East, Québec: Kidd Operations, Timmins, Ontario: Xstrata Copper Head Office Level 9, Riverside Centre, 123 Eagle Street, GPO Box 1433, Brisbane, Queensland 4001, Australia Tel Fax