Raahe Works. Environmental Report 07



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Raahe Works Environmental Report 7

Raahe Works Environmental report 7 Introduction Summary 3 Comments 4 Ruukki 5 Raahe Works 6 Principles of environmental work and the state of the environment Environmental policy 1 Environmental management system 11 Environmental targets 12 State of the environment 14 Environmental impacts and actions to minimise them Energy 18 Emissions to air 2 Emissions to water 22 Waste 24 By-products 25 Transport 26 Investments 27 Contact information Rautaruukki Corporation Raahe Works PO Box 93 FI-9211 Raahe Telephone +358 2 5911 www.ruukki.com VP, Energy and Environment Toni Hemminki Telephone +358 2 592 9217 toni.hemminki@ruukki.com Director, Development of Hot Metal Production Erkki Pisilä Telephone +358 2 592 244 erkki.pisila@ruukki.com Environment Manager Pirjo Lerssi Telephone +358 2 592 264 pirjo.lerssi@ruukki.com Environmental reports can be ordered by email: environmentalreport@ruukki.com Personnel 28 Glossary 31 Editor: Hanna Tuuva, Rautaruukki Oyj Design and realisation: Viestintätoimisto Pohjoisranta Oy Pictures: Pekka Hannila, Timo Heikkala ja Jukka Male Printed by: Kalevaprint Oy Paper: Munken Polar 24 / 13 g 2 Ruukki s Raahe Works environmental report 27

Summary Most significant environmental project new landfill site Less carbon dioxide emissions than earlier Environmental permit process nearly completed Increased particulate emissions compared to previous year The largest environmental project at Ruukki s Raahe Works was the construction of a new landfill site. Work on the landfill began during the summer and the first part of the site was brought into use towards the end of the year. The construction work continues in 28. Increased particulate emissions Except for particles, volumes of significant emissions continued to decrease during 27. Increased particulate emissions were mainly due to malfunction of the blast furnace and coking plant dust extraction equipment. Corrective actions to reduce emissions has been taken. Environmental permit process nearly completed In July 27, Vaasa Administrative Court issued a decision regarding the appeal made in respect of the environmental permit granted to the Raahe Works in 26. An appeal against the court s decision was submitted to the Supreme Administrative Court in August 27. Eco balance 27 per tonne of steel produced Emissions to air Carbon dioxide 1,778 kg Nitrogen oxides.83 kg Sulphur dioxide 1.6 kg Particulates.85 kg The most significant emissions and energy consumption 27 26 25 Carbon dioxide, millions of tonnes 4.53 4.81 4.75 Particles, tonnes 2,169 1,819 1,922 Sulphur dioxide, tonnes 4,79 4,526 4,96 Nitrogen oxides, tonnes 2,117 2,273 2,46 Energy consumption, GJ/t steel 19.7 18.49 18.95 Voluntary reporting This environmental report for 27 continues the Raahe Works policy of openly communicating environmental issues to the works own personnel and other stakeholders. The report discusses the results achieved, as well as the targets and plans forming the focus of development work. The information in the report is based on data from Ruukki s accounting, monitoring and enterprise resource planning systems. The data for materials, emissions and energy consumption in this report excludes Oy Polar Gas Ab s oxygen plant and Nordkalk Corporation s lime kilns located on the site of the Raahe Works. Ruukki s operational policies and principles, the Annual Report 27, this report and environmental product declarations can be viewed online at www.ruukki.com. Purchased electricity 176 kwh Coal and coke 539 kg Oil 98 kg Liquid petroleum gas 1 kg Iron ore concentrates 766 kg Pellets 416 kg Recycled steel 217 kg Alloying and other agents 139 kg Slag formers 121 kg Oxygen and other materials 867 kg Raahe Works Steel 1, kg Mineral products 348 kg Other recycled by-products 17 kg District heat.223 GJ Hazardous waste.21 kg Municipal waste.15 kg Dust and sludge 27.5 kg Emissions to water Suspended solids.19 kg Zinc.5 kg Oil.1 kg Ruukki s Raahe Works environmental report 27 3

Comments Focus on special steel products and energy efficiency Sakari Kallo Senior Vice President Hot-rolled plate and strip products Ruukki Production Raahe Works Ruukki s Raahe Works is focusing strongly on special steel products, which can help reduce the fuel consumption and carbon dioxide emissions of end-products such as lifting, handling and transportation equipment. Ruukki plans to significantly increase the production capacity of high-strength and wear-resistant special products at Raahe by 29. Investment projects also include environmental protection aspects, which are considered when planning new lines and equipment. The management of environmental issues at the works is continuously being improved. Environmental protection is an integrated part of everyday operations at the works and each and every employee is responsible for it in his or her own job. New landfill site brought into use Construction of a new landfill site was the biggest environmental project at the works in 27. An environmental permit for the landfill was issued in July and the first part of the site was brought into use in December. Construction work on the next phase continues during 28. The sinter plant at the Raahe Works will be closed down by the end of 211. The company will switch over to using iron pellets only instead of sinter as a raw material in the iron-making process. Closing the sinter plant will reduce carbon dioxide emissions by 1 per cent. Signatory to new energy efficiency agreement Rautaruukki was a signatory to the Finnish Ministry of Trade and Industry s voluntary energy conservation agreements between 1992 and 27. The Raahe Works has addressed long-term energy efficiency and achieved significant energy savings during the last period of the agreement. Attention will continue to be paid to energy efficiency also in future. In December 27, Rautaruukki signed up for action programmes in an energy efficiency agreement hammered out by the Ministry of Employment and the Economy, the Confederation of Finnish Industries (EK) and sector associations. As part of the agreement, Ruukki made plans to include energy efficiency in environmental management systems. An energy efficiency system will be rolled out at Raahe during 28. Improved safety In 27, the accident frequency rate at the Raahe Works decreased to 17 per million working hours. The target for 28 is 1. Efforts will be made to further improve safety by developing proactive work. A new safety action programme for 28 21 was also made during 27. Safety tool, a new electronic information system to notify and report safety non-conformances, was introduced throughout Ruukki. 4 Ruukki s Raahe Works environmental report 27

Ruukki Ruukki in brief Produces metal-based components, systems and integrated systems Customers in the construction and engineering industries Operations in 24 countries, net sales of EUR 3.9 billion Rautaruukki supplies metal-based components, systems and total systems to the construction and engineering industries. The company has a wide selection of metal products and services. Rautaruukki has operations in 24 countries and employs 14,6 people. Net sales in 27 totalled EUR 3.9 billion. The company s share is quoted on the OMX Nordic Exchange Helsinki (Rautaruukki Oyj: RTRKS). The corporation uses the marketing name Ruukki. Ruukki has three customer divisions: Ruukki Construction, Ruukki Engineering and Ruukki Metals. The fourth division, Ruukki Production, is responsible for cost-effective production. Ruukki Construction supplies metal-based solutions for building construction, especially for commercial, industrial and logistics construction, as well as for infrastructure construction. Ruukki Engineering supplies metal-based solutions to the lifting, handling and transportation equipment industry, as well as to the energy, offshore & marine and paper & wood processing industries. Ruukki Metals supplies first-class steel products to customers in the form they require either prefabricated or as parts from works or stock. Ruukki Production, which includes the Raahe Works, makes hot-rolled, cold-rolled and coated plate and strip products, as well as steel tubes and cold-formed sections. All production, starting with steel output, is based on needs of Ruukki s customer divisions. Key figures 27 26 25 Net sales, m 3,876 3,862 3,654 Operating profit, m 637 529 618 Operating profit, as % of net sales 16.4 14.4 16.9 Profit before taxes, m 621 635 612 Return on capital employed, % 29.6 31.5 32.8 Gearing ratio, % 1.4 1.2 22.8 Personnel on average 14,715 13,121 11,684 Net sales by division Net sales by region Personnel by division Production Processing Sales and service Ruukki Construction 27% Ruukki Engineering 17% Ruukki Metals 56% Finland 31% Other Nordic countries 3% Central Eastern Europe, Russia and Ukraine 21% Rest of Europe 15% Other countries 3% Ruukki Construction 36% Ruukki Engineering 21% Ruukki Metals 9% Ruukki Production 31% Corporate headquarters and corporate functions 3% Ruukki s Raahe Works environmental report 27 5

Raahe Works One of Finland s largest industrial workplaces Raahe produces hot-rolled steel plates and strips The works provides more than 3, jobs Increased production capacity for special steel products The Raahe Works makes steel plates and strips and is the largest steelworks of its kind in the Nordic countries. It is also one of the largest single industrial workplaces, employing 3,82 people - which is over 4 per cent of Ruukki s employees in Finland and around a quarter of the company s entire personnel - at year-end 27. In addition, some 5 subcontracted employees work on the site. Iron ore concentrates and recycled steel Of the works main raw materials, the iron ore and pellets are imported from Northern Sweden, the limestone from Gotland in Sweden and the coal mostly from North America. Recycled steel, which comes from Ruukki s own processes and the scrap steel market, is also an important raw material. Coal is made into coke in the coking plant. Iron ore concentrates are sintered into lump form in the sinter plant. The iron oxide in the sinter and pellets are reduced to molten iron in the blast furnace using coke and special heavy fuel oil as the reducing agents. Steel is produced in converter The molten iron and recycled steel are poured into a converter, where the unwanted carbon contained in the iron is burnt off through injections of pure oxygen. After the converter, part of the crude steel is processed in a ladle furnace and vacuum degassing plant, where the steel receives its final properties, which are based on customer orders. Finally the steel is cast into slabs and rolled into plate or strip in two rolling mills. The works site is also home to a power plant, which is fired mainly by blast furnace gas, a by-product of the blast furnace. The power plant generates heat and electricity for the works. The burnt lime needed in the processes is made on the works site by Nordkalk Corporation. Likewise, Oy Polargas Ab is responsible for storing and delivering oxygen and nitrogen on the works site and Tehokaasu Oy for storing liquefied petroleum gas. Steel production Iron ore concentrates 1,95, t Coal 1,241, t By-products: - Tar 31, t - Crude benzol 1, t - Suphur 1,2 t particulates phenols COD suspended solids Coking plant Coke 865, t Coal is made into coke in the coking plant. particulates sulphur dioxide nitrogen oxides Sinter plant Limestone 46, t particulates Lime kilns (Nordkalk Oyj Abp) particulates sulphur dioxide Iron ore concentrates are sintered into lump form at the sintering plant. Oxygen Sinter 2,648, t Oxygen plant (Oy Polargas Ab) 6 Ruukki s Raahe Works environmental report 27

Raahe Works Raw materials of iron production: - Sinter 2,648, t - Pellets 1,58, t nitrogen oxides carbon dioxide sulphur dioxide particulates carbon dioxide sulphur dioxide particulates Recycled steel 552, t Oxygen particulates sulphur dioxide Reducing agents: - Coke 865, t - Oil 242, t Power plant Molten iron 2,373, t Steel 2,546, t Oxygen-enriched air The iron oxide in the sinter and pellets are reduced to molten iron in the sinter plant. Blast furnaces Blast furnace slag 659, t suspended solids Desulphurisation In converters the unwanted carbon contained in the the iron is burnt off with oxygen. Converters Steel plant slag 226, t suspended solids, zinc Slabs Slabs oil Casting Vacuum treatment Ladle furnace The final properties of steel are processed in a ladle furnace and vacuum degassing plant. typen nitrogen oksidit oxides Plate mill Walking beam furnaces oil, suspended solids Preleveller Direct quenching unit and accelerated cooling Hot levelling Marking Inspection volatile organic compounds Plates 576, t Normalising furnace Hot levelling Cooling banks nitrogen oxides Roughing mill Walking beam furnaces Vertical mill oil, suspended solids Coil box Strip mill emissions to air emissions to water Coils 1,81, t Coilers Water cooling Ruukki s Raahe Works environmental report 27 7

Raahe Works Expansion of delivery capacity for special steel products Most of the steel strip coils produced at the Raahe Works are transported to Ruukki s Hämeenlinna Works for processing and cold-rolling and coating. Almost all of the hot-rolled steel plates are delivered direct to customers such as shipyards, heavy engineering shops and the construction industry. Hot-rolled strip is also used in Ruukki s tube works. The production capacity of high-strength and wear-resistant steels increased at Raahe during 27, with the start-up of a new direct quenching unit in September. Additional investments to expand the range and delivery capacity of special steel products will also be made during 28 and 29. Special steel products are particularly used in the lifting, handling and transportation equipment industry. Works site of 53 hectares Ruukki s Raahe Works is on a 53-hectare site on the coast of the Gulf of Bothnia and is surrounded by protection forest. The site is about six kilometres from the centre of Raahe and 1 1.5 kilometres away from the nearest residential areas. The local climate is coastal and the terrain is flat. Kuljunmäki meadow, an area of some three hectares forming part of the Natura network, is within the works site. The Kuljunlahti freshwater reservoir is located in the immediate vicinity of the works. The reservoir provides some of the water used by the works and is separated from the sea by a dam. Water is fed into the reservoir from the Haapajoki and Piehinjoki rivers, and the Haapajärvi reservoir. Within the works area, there is a landfill for ordinary waste, where dust and sludge created during the steelmaking process are disposed of. Raahe Works history Rautaruukki established 196 Completion of harbour 1963 Start up of steel plant, continuous casting plant and plate mill 1967 Start up of blast furnace 2 1975 Start up of direct quenching unit 27 Start up of blast furnace 1, sinter plant and power plant 1964 Start of the construction work 1961 Start up of strip mill 1971 Extension of coking plant 1992 Start up of coking plant 1987 8 Ruukki s Raahe Works environmental report 27

Principles of environmental work and state of the environment An environmental policy committed to continuous improvement guides environmental work at the Raahe Works. In practice, the policy is implemented using a certified environmental management system. All Ruukki s employees are responsible for environmental matters related to their own work. Ruukki s Raahe Works environmental report 27 9

Environmental policy Environmental policy commits us to sustainable development Ruukki s environmental policy commits it to acting in accordance with the principles of sustainable development. The policy forms the basis for the company s environmental targets and also tells how we will try and achieve them in practice. Ruukki s environmental policy We are committed to continuous improvement in the prevention of pollution in accordance with the principles of sustainable development complying with environmental laws and regulations and the environmental principles of the International Iron and Steel Institute (IISI) and the Business Charter for Sustainable Development of the International Chamber of Commerce (ICC). Together with our customers, we develop competitive eco-efficient products and solutions. All Ruukki s employees are responsible for environmental matters related to their own work. All significant units and operations are covered by certified environmental management systems. 16 May 25 Peter Sandvik Senior Vice President, Technology We use the following ways and means to put our environmental policy into practice: In accordance with the principles of sustainability, we seek to reduce the adverse environmental impacts of our products and operations on the air, water and land. We take into account the environmental aspects and risks and the best available economically viable technology when planning, making and implementing decisions. We assess the environmental practices of our contractors, subcontractors and suppliers and encourage them in continual improvement. Compliance with legislation and regulations is for us a matter of honour and a prerequisite for the continuation of our operations. We work together with interest groups and the authorities in the development of legislation by providing technical information, issuing statements and presenting our viewpoints. We develop high-quality, financially competitive products and solutions that use natural resources sparingly and reduce environmental loading. We take into account such things as recyclability, strength, usability and durability, hazardous materials and impacts on production processes. We provide our customers with information on the properties of steel and the environmental impacts of finished products. This information can be found in our life cycle analyses and environmental data sheets. Our product methods are both materials and energy efficient, waste and emissions are kept to a minimum. We regularly audit our operations and develop them on the basis of environmental assessments and studies. Management is responsible for resources and for defining the objectives, targets and programmes to ensure the development of environmental operations. All Ruukki s employees are aware of the environmental impacts of their own jobs and activities and are also responsible for controlling these. The R&D organisations are responsible for a high level of environmental awareness, for furthering the environmental knowledge of Ruukki s personnel, developing eco-efficient products, commercialising secondary materials, conducting life cycle studies and for working together with the authorities in the development of new legislation. The environmental and communications organisations are together responsible for the balanced and transparent communication of environmental issues. 1 Ruukki s Raahe Works environmental report 27

Environmental management system Environmental management system part of overall management ISO 141 -compliant environmental management system Audits used to assess operations Audits reported no serious non-compliances Using the environmental management system, the Raahe Works implements the environmental policy adopted by Ruukki s management. The environmental management system is part of a management system that covers Ruukki Production division and complies with ISO 91:2 quality management and ISO 141:24 environmental management standards. In accordance with the environmental management system, environmental aspects of operations are identified at the Raahe Works and environmental targets and the programmes to achieve them are drawn up on the basis of these aspects. The works management is responsible for establishing, maintaining and developing operational resources. All Ruukki s employees are responsible for environmental matters relating to their own work. Part of the environmental management system is to identify statutory requirements relating to operations and to ensure compliance with these and voluntary commitments. Identifying and developing the needs of stakeholders is also an important part of managing environmental issues. Audits ensure the system works The system and operations are regularly assessed using both internal and external audits. In audits it will be established whether or not the system meets the requirements. In addition, management will regularly establish in its reviews, whether or not the environmental management system meet the targets set. A total of 18 external audits, two of which related to environmental issues, were conducted at the Raahe Works in 27. Although the external audits reported no serious non-conformances, one of the audits made an environmental observation relating to dust removal in the coking plant. The dust removal problem was already identified at the time and corrective actions had been started. An environmental observation, regarding the dust removal system and its function of the hot-rolling line pre-fabricated plate products unit, was likewise also made in internal audits. Maintenance actions have been stepped up as a result. Ruukki s Raahe Works environmental report 27 11

Environmental targets Environmental aspects ranked in order of importance Targets are set based on significance assessment Main aspects are emissions to air as well as sludge and dust Internal recycling of dust and sludge is being studied The aim of the significance assessment is to identify environmental aspects. The objectives and targets of unit s environmental work are set on the grounds of the significance assessment. Significance assessment of environmental impacts ranks environmental aspects in order of importance. Assessments are carried out every three years, or whenever there is a significant change in the environmental situation. The most recent significance assessment carried out by a panel of specialists in spring 26 examined the environmental aspects of both the entire works and on-site contracting parties. The most important environmental aspects were deemed to be particulate emissions, other emissions to air and dust and sludge for final disposal. Emissions to air from the Raahe Works are high by Finnish standards, with particulate emissions accounting for some three per cent, sulphur dioxide six per cent and nitrogen oxides for one Environmental aspect Major impact Particulate emissions Dust and sludge for final disposal Environmental impact impair air quality foul the surroundings inhalable particles under 1 microns may impair health take up landfill space Significant impact Sulphur dioxide emissions Heavy metal emissions to air Nitrogen oxide emissions Environmental accident risks Unusable slag Energy consumption Reclamation of municipal waste cause acidification of soil and water in high concentrations cause irritation of the respiratory passages may impair health contribute to ozone formation in the lower atmosphere cause acidification of soil and water in high concentrations cause irritation of the respiratory passages forewarning requires a detailed study of individual risks and a systematic analysis of any accidental emissions takes up storage space causes emissions to air consumes natural resources saves natural resources Minor impact PAH compounds Dioxins Malodorous sulphur compounds Carbon dioxide emissions Wastewater solids to the sea Wastewater oils to Kuljunlahti reservoir Environmental noise Municipal waste Usable slag Wastewater zinc Water consumption VOC emissions may impair health may impair health may impair health create an unpleasant environment accelerate the greenhouse effect, which causes global warming silt up watercourses cause turbidity of the water hamper the functioning of organisms in relatively high concentrations are toxic to organisms restricts use of the area for residential and recreational purposes fills up landfills increases landfill emissions to air and water reduces carbon dioxide emissions in cement production conserves natural raw materials in large volumes slightly toxic to organisms can hamper recreational use of rivers and lakes during dry years are toxic contribute to the formation of ozone 12 Ruukki s Raahe Works environmental report 27

Environmental targets per cent of similar emissions in Finland. Carbon dioxide emissions were deemed to be of minor impact because there is no short-term viable technology available. A new landfill site for dust and sludge for final disposal was built on the works site in 27. Studies are also being made on the viability of increasing their internal recycling. Ruukki committed to continuous improvement Ruukki s environmental policy commits it to the continuous improvement of environmental issues. The focus of development work at Raahe is on decreasing particulate emissions and reducing the amount of waste. In addition, efforts are being made to economically manage carbon dioxide emissions as a result of emissions trading. The environmental targets at the Raahe Works have been fixed until the end of 29. As part of strategic planning, management looks at the achievement of these targets in its review each year and sets new targets. The actions required are delegated to be dealt with by the relevant area of responsibility. 25 26 27 28 29 Environmental aspect Environmental Means target target target target target objective /actual /actual /actual Carbon dioxide emissions, economic energy conservation 1,757/1,728 1,76/1,686 <1,74/1,783 1) kg/t st management programme, cutting comsumption of blast furnace reducing agents Particulate emissions reduction measurable, kg/t st investments, maintenance 1.11/.71.91/.64.66/.85.62.62 fugitive investments +.18/+.33 +/ + + collection, kg/t st 2) covering the ground, ha planting and surfacing -/+.9 -/ +12/<.5 - - Use of energy, GJ/t st improved energy energy efficiency -/18.95 -/18.41 -/19.7 3) efficiency programme Suspended solids discharged reduction clarifier functions.19/.2.18/.19.2/.44.2.2 into the sea, kg/t st Municipal waste, kg/t st reduction in training in <.2/.19 <.25/.17 <..19/.21 <.17 <.17 waste to landfill waste sortering Lawful operations, number of compliance with permit meticulous operation /4 /3 /1 violations of the permit limits limits and legislation Environmental noise, reduction in noise insulation of noise -/2 1/1 /3 number of complaints sources, ways of working Sulphur dioxide emissions, reduction choice of raw materials, 1.74/1.79 1.73/1.59 1.78/1.6 1.6 1.6 kg/t st planned maintenance of desulphurisation plant Nitrogen oxide emissions, reduction energy efficiency -/.88.9/.8 <.89/.83 <.89 <.89 kg/t st programme Oil discharged into reduction bearing overhaul <.3/.3 <.3/.2.3/.1.2.2 Kuljunlahti, kg/t st programme Coking plant wastewater, reduction in improving operation -/.137 -/.139 efficiency >85% >85% kg/t coal chemical oxygen of treatment plant of treartment demand plant >85%/85% Zinc discharge, kg/t st maintaining quality of recycled steel,.1/<.1.1/<.1.1/<.1.1.1 level achieved improving clarifier function at steel plant Environmental awareness increasing awareness training events -/1 2-3/4 1-2 1-2 1) New Emissions Trading period 2) Collection of fugitive dust will increase the measured amount of particulates 3) Targets according to energy efficiency agreement will be set during 28 kg/t st = kilograms per tonne of steel produced GJ/t st = gigajoules per tonne of steel produced <= below >= over Ruukki s Raahe Works environmental report 27 13

State of the environment State of the environment monitored in cooperation Air quality at Raahe is better than the limit values Phosphorous concentration falling in Kuljunlahti reservoir Permit limits exceeded a few times The impacts of the Raahe Works on the surrounding environment are actively monitored. Air quality is constantly measured and monthly samples are taken of seawater. Fisheries are also monitored in the sea area. Some of the impact assessments are carried out in cooperation with the town of Raahe. In addition, the Raahe Works monitors, for example, the quality of the Kuljunlahti freshwater reservoir. System includes three measuring stations The Raahe air quality measurement system includes three measuring stations, whose locations are were jointly decided by the works, the town of Raahe and the North Ostrobothnia Regional Environment Centre. The locations take into account the prevailing winds. The measuring station nearest the works is one kilometre away at Lapaluoto, the second nearest is five kilometres away at the town depot and the furthest is in the town centre, six kilometres from the works. The station in the town centre monitors mainly traffic emissions, whereas the others measure the environmental impacts of industry. All three stations monitor inhalable particles. In addition, the town depot station measures sulphur dioxide content. Besides particles and sulphur, the Lapaluoto station measures polycyclic aromatic hydrocarbons (PAH) and heavy metals. The town centre station measures nitrogen oxide emissions from traffic and a meteorological station there measures wind, temperature and air pressure. Some of the measurements are continuous and the data is transferred automatically to the joint municipal health authority s IT systems. The information is also available on the town s website at www.raahe.fi and on the Finnish Meteorological Institute s website at www.ilmanlaatu.fi. Air quality better than limit values In 27, the annual average value of inhalable particles was 19.3 micrograms per cubic metre at Lapaluoto, 16.3 at the town depot and 19.6 in the town centre. The average annual limit value for inhalable particles is 4 micrograms per cubic metre. The 24-hour limit value for particles is 5 micrograms per cubic metre and this figure may be exceeded for a maximum of 35 days during the calendar year. There were a total of 15 exceedings at the town centre station and nine at the Lapaluoto and town depot stations during 27. The annual average value of sulphur dioxide was 2.4 micrograms per cubic metre at Lapaluoto and 2. at the town depot. Sulphur dioxide concentrations were well below the recommended maximum and limit values. Nitrogen dioxide concentrations in the town centre averaged 25.8 micrograms per cubic metre in 27 and were below the recommended maximum and limit values. State of the sea satisfactory The sea area off the coast of Raahe is subject to discharge from the Raahe Works and Raahe sewage treatment plant. Under a decision by the water court, the works and town of Raahe are responsible for monitoring the impacts of wastewater on the seawater in a manner approved by the authorities. Also the state of the fish fauna and fishing is monitored each year. The area monitored covers the sea area off the coast of Raahe between the Kuljunlahti reservoir and Pattijoki river. The area stretches to about six kilometres from the mainland to outside the archipelago area near the coast. Monitoring is performed by an independent authorised testing laboratory. The sea area monitoring programme was revised during 27. The new plan covers monitoring of the waterways and fisheries between 28 and 215. Changes have been made to some observation points and sampling periods as regards monitoring seawater and samples of phytoplankton are now included. No changes of principle have been made to the monitoring of fisheries. According to general classification norms, the seawater off the coast of Raahe is mostly classed as good. Owing to slightly increased level of eutrophication, the coastal water immediately outside the steel works and town of Raahe is classed as satisfactory. During 27, North Ostrobothnia Regional Environment Centre, the town of Raahe and the Raahe Works restored the land and water bordering the works at Aittalahti. Water quality was improved by increasing the flow and by dredging an area of open water. The land was improved for recreational use and as a habitat and nesting place for birds by clearing the beaches and building a bird observation tower. The project also safeguards natural biodiversity in the area. 14 Ruukki s Raahe Works environmental report 27

State of the environment Air and water quality measuring stations Maapauha Ulkopauha Preiskari Pitkäkari TOWN CENTRE Vilpunkangas Pikkuholmi Isoholmi Pyhtilä Kesälä Antinkangas Lappanen Iso- Kraaseli Virpiperä Pikku- Kraaseli LAPALUOTO Lapaluoto Varvi Välikylä Satamakangas TOWN DEPOT Kummatti Koivuluoto Mettalanmäki Junnilanmäki Pereenmäki Palonkylä Ollinsaari Mestauskallio Paraatinmäki Tikkamäki Saloinen Hannulankangas Water quality measuring stations Water quality monitoring Benthos monitoring Phytoplankton monitoring Air quality measuring stations Kuljunniemi Aunolanperä Tarpio Inhalable particles Sulphur dioxide PAH and heavy metals Nitrogen oxides Metereological station Ruukki s Raahe Works environmental report 27 15

State of the environment Phosphorous concentration falling in Kuljunlahti Kuljunlahti is a reservoir that was dammed off from the Gulf of Bothnia in 1963 and receives freshwater from the Haapajärvi reservoir and Haapajoki and Piehinkijoki rivers via Siniluoto bay. Based on phosphorous and nitrogen concentrations, Kuljunlahti is classified as eutrophic. However, its phosphorous concentration was lower last year than earlier and at times was even classified as slightly eutrophic. The nitrogen concentration has remained unchanged. Bio-indicators depicts the state of the environment In 27, a bio-indicator study was carried out to map air quality in the environs of the Raahe Works. The study analysed samples of conifer needles, moss, soil and mapped tree trunk lichen. The results depict the impact of impurities in the air on the surrounding nature. The final results of the study will be obtained during 28. Studies have also been made to explore the possibilities to reduce the noise caused by the works. On this basis, the technical and economic studies of potential actions to reduce noise are now under way and decisions on the measures to be taken will be made during 28. Treatment efficiency at the sewage treatment plant as regards biological oxygen demand was under par in 27. This was due to the tepidity of incoming water on the one hand and poor treatment efficiency at times on the other. Ten environmental complaints were received during the year. Six of these complaints concerned dust, three noise and one was about water protection. The reasons for the complaints were studied and replies were sent to those persons concerned who had given their contact information. Few environmental queries were received. Environmental provisions totalling two million A provision totalling EUR 3 million was put aside in 25 and 26 for landscaping the waste sorting area. The EUR 2 million of the provision remaining at the end of 27 is expected to be capitalised within two years. Some compensation was paid to the owners of waterfront plots around Kuljunlahti reservoir and to the town of Raahe for wastewater discharges into the sea. No environmental fines were payable. Permit limits exceeded a few times Suspended solids discharged into the sea exceeded the permit limit for a period of three months. Non-compliance was caused by an increase in the solids content of intake water in connection with earthworks to extend the water intake pipe at the works. The permit limit is for gross discharge, which means the properties of the intake water also affect it. Dust emissions exceeded permit levels at the coking plant as a result of incorrect interpretation of maintenance readings and the ensuing deterioration of the scrubbers. Chemical oxygen demand exceeded the permit limit once at the coking plant wastewater treatment unit due to a faulty sample. Corrective actions were taken immediately. Average monthly values for inhalable particles 27 μg/m 3 6 5 4 3 2 1 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Lapaluoto Town depot Town centre Dec 16 Ruukki s Raahe Works environmental report 27

Environmental impacts and actions to minimise them Industrial activities inevitably impact on the environment. At the Raahe Works, emissions to air cause the most significant impacts. Work is constantly being done with the help of investments, careful operations and recycling to minimise these impacts. Construction of the first part of a new landfill was the most significant environmental investment in 27. Ruukki s Raahe Works environmental report 27 17

Energy Electricity needs mostly met by own power plant Electricity from blast furnace gas and steam Works supplies almost all the district heat used in Raahe Rautaruukki is party to new energy efficiency agreement The works own power plant generates around 6 per cent of the electricity used on the works site. In 27, the power plant generated 632 gigawatt hours of electricity. Blast furnace gas and the high pressure steam available from the dry cooling of coke are the most important energy sources. External fuel, oil, accounted for just three per cents. Blast furnace pre-heaters and the power plant use blast furnace gas as the main fuel. This gas is produced in the iron reduction process in the blast furnaces. The coke oven gas produced in the coking plant is also used as a fuel in different processes at the works. Use of blast furnace gas and coke oven gas saves an amount of energy equivalent to annual energy use of some 265, singlefamily houses. The third process gas is converter gas, which is generated in the steel plant. The energy contained in this gas is partly recovered for use as district heat. In addition to electricity and fuels purchased - liquefied petroleum gas and fuel oil - energy consumption at the Raahe Works includes the reducing agents used in iron-making: coke produced from coal and special heavy fuel oil. The blast furnaces use almost the minimum amounts of these technically possible in the process. Specific energy consumption at the Raahe Works in 27 was 19.7 gigajoules per tonne of steel produced. Specific consumption was slightly higher than for the previous year owing to scaling down production in line with profitable demand. Half of district heat goes to Raahe Energy Raahe Works sells half of the 32 gigawatt hours of district heat it produces each year to Raahen Energia Oy. More than 9 per cent of the district heat generated is obtained from process cooling systems. 18 Ruukki s Raahe Works environmental report 27

Energy Almost all the district heat in the Raahe area is produced by the steel works and used by around 15, residents and most public and industrial buildings. A wood drying kiln in the vicinity of the works also uses district heat. There is also a 12 megawatt wind farm owned by Hyötytuuli Oy on the works site. The works buys some of the electricity generated by the wind farm, which accounts for about one per cent of the electricity bought by the Raahe Works. Focus on energy efficiency Ruukki s sites in Finland were party to the Ministry of Trade and Industry s voluntary energy conservation agreements between 1992 and 27. Using different actions during the final period of the agreement, the company s sites were able to make implicit energy savings of 1.25 terawatthours. This is roughly a quarter of the total energy saved by Finnish industry and is equivalent to the annual amount of energy used by 62,5 single-family houses and reduced carbon dioxide emissions by about 48, tonnes a year. The Raahe Works achieved an energy saving of around 1.65 gigajoules per tonne of steel produced. In December 27, Rautaruukki Corporation signed up for action programmes in a new energy efficiency agreement hammered out by the Finnish Ministry of Employment and the Economy, the Confederation of Finnish Industries (EK) and sector associations. The new agreement is valid from 28 to 216. Motiva and various sector associations have also prepared an agreement model aimed at sustainable improvement in energy efficiency. Under the new agreement, the Raahe Works comes under the action programme for energy intensive industry. Despite the progress made to date, energy at the Raahe Works can still be used more efficiently. During 28, energy efficiency will be integrated into the works environmental management system. Energy efficiency targets will be fixed for 28 to 216 in the same context. Different departments will appoint contact persons for energy to coordinate development work and integrate energy efficiency into departmental and process instructions. Specific energy consumption GJ/tonne of steel produced 22 2 18 16 14 12 1 8 6 4 2 23 24 25 26 27 Consumption of reducing agents indexed consumption of reduction agents in ironmaking on basis of coal used 18 16 14 12 1 8 6 4 2 1 Ruukki EU average NAFTA Energy balance 27 Purchased energy 2.89 GJ / t te 18 111 CIS* China India* Source: Stahl-Zentrum, based on data from 25 Total energy used 41 GJ / t te 125 127 Energy consumption 19.7 GJ / t te *estimate 153 Sold energy 1.93 GJ / t te Recyled energy 2 GJ / t te GJ / t st = gigajoules per tonne steel produced Ruukki s Raahe Works environmental report 27 19

Emissions to air Production volumes impacts on carbon dioxide emissions Less sulphur dioxide and nitrogen oxide emissions to air than earlier Malfunctions increased particulate emissions Heavy metal emissions depend on quality of raw material The Raahe Works is a source of considerable carbon dioxide emissions, which in 27 were 4.5 million tonnes, or six per cent of Finland s greenhouse gas emissions. Emissions at the works vary depending on production volumes and were lower in 27 than in 26. The coal in reducing agents and limestone in the steelmaking process account for 95 per cent of carbon dioxide emissions at the works. Only a small amount originates from fuels such as coke breeze, liquefied petroleum gas and fuel oils. There are no quick solutions available to cut the use of reducing agents. Hopes are being placed in new technologies to provide long-term solutions. An example of efforts on this front is the UL- COS (Ultra Low CO 2 Steelmaking Process) project, which is being carried out by a partnership of steelmakers and research organisations in Europe. ULCOS aims to develop a steel production concept that would cut carbon dioxide emissions by over 5 per cent compared to benchmark ore-based production. Closure of the sinter plant by the end of 211 will result in a decrease of around 1 per cent of carbon dioxide emissions at the works. The Raahe Works comes within the scope of the EU emissions trading scheme. During the first emissions trading period 25 27, Ruukki sold unused emissions allowances, which arose as a result of production being adjusted to meet profitable demand. Clear rise in particulate emissions Particulate emissions at the works occur in combustion processes and when handling raw materials. The works has some 65 different dust collection and recovery systems such as electrostatic precipitators, cyclones and scrubbers. Wind-blown dust is also prevented by spraying storage areas, grassing over, screen planting and wind barriers. Particulate emissions increased by 19 per cent compared to the previous year - with the coking plant and blast furnaces accounting for the highest increases. The increase and exceedings of permit limits were due to malfunction of the dust removal devices. The Raahe Works started a study to extensively map fugitive dust emissions throughout the works. The study will be completed during 28. Fugitive dust emissions do not originate in the production process, but come from raw-material stocks and traffic on the works site. Carbon dioxide emissions Particulate emissions millions of tonnes t tonnes kg 6. 2.4 4, 1.6 5. 4. 2. 1.6 3,5 3, 2,5 1.4 1.2 1. 3. 1.2 2,.8 2. 1..8.4 1,5 1, 5.6.4.2 23 24 25 26 27 23 24 25 26 27 Million tonnes/year Tonnes/tonne of steel produced Works own target value for 27 Tonnes/year Kilos/tonne of steel produced Works own target value in 27 2 Ruukki s Raahe Works environmental report 27

Emissions to air Decrease in sulphur and nitrogen oxides emissions Sulphur dioxide is released into the air during combustion processes at the works. Emissions fell by 11 per cent in 27 as a result of lower sulphur content of the raw material. The works has achieved its own target of 5, tonnes maximum a year of sulphur dioxide emissions since the start of 22. The emissions limit under the new forthcoming environmental permit is 5,5 tonnes a year. Nitrogen oxides similarly occur during combustion processes and are mostly released into the air in the sinter plant, rolling mills and coking plant. Nitrogen oxide emissions decreased by seven per cent on the figure for the previous year. Heavy metals originate in raw materials The raw materials used contain small amounts of heavy metals such as lead and zinc. Most of these remain in the steel and slag during the production process. Heavy metals enter the air with particulates. Lead emissions were higher, whereas zinc emissions were considerably lower compared to 26. Annual rates vary due to fluctuations in the heavy metal concentrations in raw materials. A study of dioxin and furan emissions into the air was carried out at the Raahe Works in 27. Most of these originate in the sinter plant. Dioxin and furan concentrations in exhaust gases are relatively low compared to the best practicable technology and benchmarking. Heavy metal emissions kg 27 26 25 24 23 Lead 2,476 2,86 2,295 4,162 2,687 Chrome 44 348 376 542 648 Zinc 426 1,18 2,544 1,572 1,645 Nickel 266 224 236 362 37 Cadmium 1) 3 35 84 79 5 Mercury 2) 19 19 1) Measured at the sinter and steel plants. 2) 19 kg measured at the sinter and steel plants in 26. The previous measurement at the sinter plant was in 1999, when it was 1 kg a year. Sulphur dioxide emissions Nitrogen oxide emissions tonnes 9, kg 4.5 tonnes 4, kg 1.6 8, 7, 6, 5, 4, 3, 2, 4. 3.5 3. 2.5 2. 1.5 1. 3,5 3, 2,5 2, 1,5 1, 1.4 1.2 1..8.6.4 1,.5 5.2 23 24 25 26 27 23 24 25 26 27 Tonnes/year Tonnes/year Kilos/tonne of steel produced Kilos/tonne of steel produced Permit limit 8, tonnes/year Works own target value for 27 Works own target value for 27 Ruukki s Raahe Works environmental report 27 21

Emissions to water Suspended solids are discharged into the harbour area Water is used for cooling and washing Permit limits exceeded a few of times New environmental permit tightens up emissions limits The Raahe Works uses seawater for cooling in blast furnaces, the steel plant and power plant, and to scrub flue gases in the steel plant. Freshwater is used for cooling in the coking, sinter, continuous casting, oxygen and power plants, and at the rolling mills. It is also used for the production of boiler water in the power plant, gas scrubbing in the blast furnaces and for slag granulation. The works is permitted to take 23, cubic metres of water an hour from the sea and 15, cubic metres of freshwater an hour from the Kuljunlahti reservoir. Between 75 and 98 per cent of the freshwater is re-circulated in processes. An extensive study of harmful substances ending up in the waters and damaging the environment was carried out throughout the works in 27. The study showed that suspended solids are the most detrimental substance in the waters. It consists of calcium, magnesium and silicon compounds, which mostly originate from steel plant and blast furnace slag. Suspended solids silt up the harbour area. Permit limits exceeded a few of times In 27, the permit limit for the gross discharge of suspended solids into the sea was exceeded three times and the target value for the net discharge was exceeded on one occasion. The gross discharge includes natural solids contained in the seawater and the so-called net discharge attributable to the works. The permit limit was exceeded as a result of an increase in the solids content of intake water in connection with earthworks to extend the intake water pipe at the works. Non-compliance was temporary. Construction work in the harbour basin was also to blame for exceeding the target values for both suspended solids and zinc. The target value for zinc discharge was exceeded once. Wastewater from the coking plant is cleaned biologically and fed into a sludge basin before flowing into the sea via the works seawater circulation system. Chemical oxygen demand exceeded the permit limit at the coking plant wastewater treatment plant once due to a faulty sample. Zinc discharge into the sea Suspended solids discharge into the sea kg/day kg/day 25 8, 7, 6, 5, 4, 3, 2, 1, 2 15 1 5 23 24 25 26 27 23 24 25 26 27 + Zinc discharge from the works = net discharge Zinc in sea water Gross discharge Permit limit for gross discharge 25 kg/day Target value for net discharge set by the Water Court 8 kg/day + Solids from the works = net discharge Solids in the seawater Gross discharge Permit limit for gross discharge 4, kg/day Target value for net discharge set by the Water Court 1,3 kg/day 22 Ruukki s Raahe Works environmental report 27

Emissions to water Treatment efficiency at the sewage treatment plant as regards biological oxygen demand was under par in 27. This was due to the tepidity of incoming water on the one hand and poor treatment efficiency at times on the other. Tighter permit limits in future The impending environmental permit for the works specifies new limits for the net discharge of suspended solids, zinc and oil emissions. The permit limit is 2 t/day for suspended solids, 8 kg/day for zinc and 5 kg/day for oil. The emission limit for oil into the Kuljunlahti reservoir will be 3 kg/day gross discharge. Coking plant emissions limits will also be tighter for tar, oil, chemical oxygen demand and nitrogen. Coking plant discharges kg/day permit limit 27 26 25 24 23 Nitrogen 5 95 89 11 89 12 Cyanide.5.1.9.1.12.8 Tar and oil 15.3.1.3.65 1.3 Phenols.1...1.1.1 Chemical oxygen demand (COD) 9 518 472 474 472 459 Water cycle 27 water volumes in cubic metres per hour Sea Sea water cycle Fresh water cycle 11,7 11, Dam 7 7,5 35, 7,3 Kuljunlahti fresh water reservoir 6,4 Siniluotolahti Siniluodonlahden canal kanava Water evaporation averages 2 m 3 per hour. The amount of recycled water are estimations. Oil discharge into the sea kg/day 2 18 16 15 12 1 8 6 4 2 23 24 25 26 27 Oil discharge Permit limit 6 kg/day Target value set by the Water Court 3 kg/day Oil discharge into Kuljunlahti reservoir kg/day 2 18 16 15 12 1 8 6 4 2 23 24 25 26 27 Oil discharge Permit limit 2 kg/day Target value set by the Water Court 9 kg/day Ruukki s Raahe Works environmental report 27 23

Waste New landfill brought into use in works area Landfill site construction continues in spring 28 Less municipal waste, more hazardous waste New blast furnace sludge pre-treatment process A start was made on the construction of a new landfill site at the Raahe Works in 27. The first part was completed and brought into use in December the same year. Landfill site construction work continues in spring 28 and when complete the site will cover around 14 hectares. The landfill site is being constructed as a result of the Finnish Landfill Decree, which states that the dust and sludge storage area at the Raahe Works must be replaced by area that meets the requirements of a conventional landfill. The type and volumes of sludge to be disposed of in the landfill are closely monitored. The solubility of environmentally-harmful substances is specified each year. A new blast furnace sludge pre-treatment process will be completed in 28 and the sludge will be dried before landfill disposal. More hazardous waste The combustible part of the waste produced at the works is separated from municipal waste and taken to an external pellet plant, where it is turned into briquettes. Glass, cardboard, paper and electronic scrap are sorted and removed from the works for utilisation elsewhere. Wood waste is taken to a chipping plant and is not considered as combustible municipal waste. Municipal waste that is unsuitable for recycling is taken to a landfill in Oulu. In 27, the works produced a total of 374 tonnes of such waste, 23 per cent less than a year earlier. The works produced 13 per cent more hazardous waste than in 26. This was due to an investment in the coal tar clarifier at the coking plant, where the coal tar sediment created must be treated as hazardous waste. Most of the hazardous waste produced by the plant is oily water. Dust and sludge to new landfill Most of the dust and sludge forming in the scrubbing of flue gases is recycled as raw material for the sinter plant and blast furnaces. Some 7, tonnes of dust unsuitable for recycling was stored for disposal in the works landfill in 27. This amount corresponds to around one per cent of the raw material used at the works. Waste tonnes 1,8 1,6 1,4 1,2 1, 8 6 4 2 23 24 25 26 27 kg.5.45.4.35.3.25.2.15.1.5 Tonnes of hazardous waste/year Tonnes of municipal waste/year Tonnes of recycled municipal waste/year Kilos of hazardous waste/tonne of steel produced Kilos of municipal waste/tonne of steel produced Kilos of recycled municipal waste/tonne of steel produced 24 Ruukki s Raahe Works environmental report 27

By-products Slag processed into mineral products Many environmental benefits from using mineral products Great demand from cement industry, earthworks and road construction New applications constantly being sought Slag created in the blast furnace and converter processes at the Raahe Works is processed into mineral products, which are used in earthworks and road construction, soil conditioning and as an industrial feedstock. In earthworks and road construction, mineral products are a substitute for natural materials. Products include blast furnace sand, which has good bearing capacity and thermal insulation. The bearing capacity improves with time as the granules bind. The use of mineral products to replace clinker in the cement industry saves natural raw materials and also reduces carbon dioxide emissions. Mineral products are used instead of lime in soil conditioning. The products contain important minerals for plants and also loosen up agricultural land. In 27, the use of mineral products in soil conditioning and in the cement industry reduced global carbon dioxide emissions by a total of some 28, tonnes. There has been especially strong demand for mineral products in the cement industry, earthworks and road construction. Research to find new applications Research and regular quality control support the sale of mineral products and ensure that they comply with statutory environmental and quality requirements. The focus of research in 27 was on new applications for mineral products made from slag created in the converter process. The tar, crude benzol and sulphur created as by-products in the coking plant are sold as raw materials to the chemical industry. Use of mineral products by application 27 tonnes Blast furnace slag Converter slag Cement industry 3, Earthworks and road construction 25, Soil conditioning 13, 79, Other applications 19, Used on site 17, 69, Ruukki s Raahe Works environmental report 27 25

Transport Motivation to reduce energy consumption Logistics unit has separate environmental objectives Increase loading on ships return voyages Deepen shipping lane in Raahe Harbour Ruukki Logistics, the internal service unit, is responsible for transport and other logistics services at the Raahe Works. Raw materials and products are transported by ship, train or lorry. Ruukki also sells transport services to outside customers. Iron ore, pellets and limestone are imported mainly from Sweden and coal from North America. The service unit s environmental objectives are to cut transportation emissions, improve efficiency and reduce energy consumption. The units operations are managed according to certified environmental management system. Higher loading rate The environmental target for vessels operated by Ruukki is to increase the loading on return voyages by five per cent each year. In 27, this meant an increase to 55 per cent. The target was achieved and the loading on return voyages was over 58 per cent. The transportation damage target for 27 was a maximum of 2.8 per cent of transported volume. This target, too, was achieved and transportation damage was 1.33 per cent. The aim is also to minimise shipping risks by chartering seaworthy vessels from reputable shipping companies. No shipping incidents causing environmental risks occurred in 27. All modes of transport give rise to environmental impacts in the form of emissions into air and by consuming energy. Most of the emissions originate from fuel combustion. Ruukki encourages its contractual partners to track and reduce energy consumption in transportation. Finland s fifth largest port The Port of Raahe handles Ruukki s transport and that of other customers. Ruukki Production operates the harbour on the works side and Ruukki Logistics on the town side. In 27, a total of 6.6 million tonnes of cargo passed through the port, up 8 per cent on the figure for 26. During the year, 761 vessels called at the port. Industry in central and northern Finland make up the port s main customer base. As demand for special steel products grows, so does container traffic and various individual consignments in the port. The shipping lane to Raahe Harbour will be deepened from 8 metres to 1 metres by the end of 21. This will enable vessels with greater draught to enter the harbour, improve navigation and reduce environmental risks. Transport volumes of raw materials and finished products to and from the Raahe Works 27 1, tonnes By sea raw materials 5,76 products 561 By rail raw materials 1,373 products 95 By road Total cargo traffic at Port of Raahe millions of tonnes 6.8 6.6 6.4 6. 5.8 raw materrials 27 products 259 Total 8,317 5.6 5.4 23 24 25 26 27 26 Ruukki s Raahe Works environmental report 27

Investments Significant environmental investments Environmental investments accounted for 5 per cent of total investments New treatment plant keeps VOC emissions in check Wastewater treatment plant for new direct quenching unit In 27, environmental investments totalled around EUR 3 million, or 5 per cent of total investments at the Raahe Works. The percentage of investment in environmental protection compared to total investment is determined in conjunction with the technical planning of investments. The largest single investment was a VOC (volatile organic compounds) treatment plant at the component works. The plant improves air protection and helped ensure the works is below the limit values in the EU s VOC Directive, which entered into force in autumn 27. At the coking plant, an investment was made to recycle sludge from the wastewater treatment plant back to the process. This reduces the amount of sludge for final disposal by 5 tonnes per year and improves water protection. A new direct quenching unit for highstrength steel production came on stream at the works. Part of the total investment included building a new wastewater treatment plant for the wastewater from the unit. Its use improves separation of suspended solids and oil from water. In addition, construction work started on a new landfill for process waste on the works site. The first part of the landfill was brought into use in December. Investments in environmental protection in 27 Environmental Share of environmental Target expenditure, 1, protection as % of total investment Treatment of volatile organic compound emissions at component works 1) air protection 1,44 1 Landfill for process waste waste management 85 1 Wastewater treatment of direct quenching unit in plate mill 1) water protection 329 2 Pusher type slab reheating furnace in rolling mill energy efficiency 87 2 Recycled washwater clarifier at coking plant water protection 51 3 Plasma cutter in hot rolling mill air protection 12 2 Coal tar clarifier at coking plant 1) water protection 6 5 Total 2,379 Other investments 374 For example - treatment for bio-sludge from the coking plant - noise meter - energy waste packing equipement - replacement of repair shop lighting Total 2,753 Relative share of environmental investments of total investments 5 1) Investment costs allocated for 26 27. Ruukki s Raahe Works environmental report 27 27

Personnel Personnel competence plays a key role Retirement of large age groups poses challenge Much attention given to safety Works safety reporting updated The main focus of human resources at Ruukki is on resources management, which emphasises the importance of recruiting and developing personnel competence. The retirement of large age groups in Raahe and Finland in the near future poses a particular challenge. Ruukki has been responding to this challenge for a number of years through recruiting and training by recruitment. Raahe is home to Ruukki Industrial Institute, which is entitled to award further vocational qualifications in metal processing, maintenance, machining and sheet metal working. In addition to Raahe, the Institute also has students in Hämeenlinna. In 27, a total of 187 students were studying for a further vocational qualification at the Institute. Of the 115 students in Raahe, 38 completed a further vocational qualification during the year. New foremen and supervisors are trained in a separate two-year Steelmaster programme. The second Steelmaster course began in 27 and aims at multi-form study to meet the needs of the work environment. In addition, Raahe also provides internships and thesis projects for students in different fields. Ruukki also works together with universities, universities of applied science and vocational institutes. In 27, the Raahe Works provided summer jobs and internships for 75 students and 5 thesis projects. As in earlier years, the works supports numerous causes in sports and youth work in the vicinity. 28 Ruukki s Raahe Works environmental report 27

Personnel Proaction important in occupational healthcare Occupational healthcare maintains the physical and mental wellbeing of employees. The focus is mainly on pro-active care through health checks and risk assessment of the working environment. Occupational healthcare also includes medical treatment. All employees are invited to take part in physical rehabilitation when they attain a certain age or if required by their state of health. The results of the corporate-wide employee opinion survey carried out in 26 show that Ruukki s job satisfaction index was 6.4, compared to an international average of 6.8. The index at the Raahe Works was 59.3, slightly higher than the result for Ruukki Production as a whole. The results of work done on the basis of the employee opinion survey were examined in a new survey conducted at the start of 28. Specific working environment development projects will be launched based the results of this study, too. Safety work strategy High-profiile management Safe working practices Experienced, skilled employees Safe equipment and processes Employee commitment Safety management system Aiming for an accident-free Ruukki Safety management at Ruukki is part of operative management. Ruukki s management and employees are committed to complying with, maintaining and developing unified rules of play in safety to create an accident-free Ruukki. Action within the company will lead to continuous improvement of the safety record. Experienced, skilled employees, safe equipment and processes, safe working practices and high-profile safety management are the cornerstones of safety work. The focus has shifted from reactive to proactive safety work. Proactive safety work can help further improve the current level of safety. However, this calls for genuine cooperation between management and employees and the commitment of the entire personnel to safety work. The most important tools in proactive safety work include reporting, analysing and eliminating the causes of near-miss situations. Other methods include risk mapping and assessment, employee induction and guidance, training, instruction, communication and safety management. Personnel by gender permanent employees working at the Raahe Works Workers male 63.3% Salaried employees male 2.7% Workers female 6.7% Salaried employees female 9% Management male and female.4% Personnel by age permanent employees working at the Raahe Works % 45 4 35 3 25 2 15 1 5 <2 2 3 31 4 41 5 51 6 >6 Ruukki s Raahe Works environmental report 27 29

Personnel The accident frequency rate fell in 27 to 17 accidents per million working hours and there were 91 incidents. A total of 24 accidents took place on the way to or from work. The 28 target indicator for accident frequency is 1. The target indicator for proactive safety work is 3,8 near-miss incident reports. An online information system has been deployed to notify and report safety deviations. New safety action programme A new safety action programme was drawn up in 27 for 28 21. Persons in supervisory positions have been trained in safety management in accordance with the principles adopted by Ruukki s management. A total of 4, people consisting of employees at the Raahe Works and some of Ruukki s partners have completed occupational safety training, which is repeated every five years. Line organisation managers have trained their teams to work safely. Process safety training will be held during 28 21 and supervisors will be given advanced safety management training. Repetition of occupational safety card training has also begun. Safety report updated The safety report for the Raahe Works was updated and forwarded to the Safety Technology Authority in December 27. The safety report charts process risks and describes the working practices used to prevent accidents. The report also presents the works safety management programme, the risks of catastrophe in the various departments and preparations made in the event the risks materialise, and also contains detailed plans for alarms and the organisation of rescue work on the works site. A description of the internal rescue plan and arrangements for both internal and external rescue is provided, taking into account the hazardous chemicals stored and handled on the works site. The works fire and rescue plans were reviewed in conjunction with fire inspections in autumn 26. A joint emergency training exercise is carried out with the Raahe Works fire brigade, personnel, regional fire and rescue services and healthcare staff every three years. Jokilaaksot Rescue Department and Ruukki s insurance company take an active part in these exercises. The works automatic fire detection system was modernised in 27 by replacing the control centre system. The works fire detection centres are also being replaced and connected to a new control centre. This will shorten the alarm response time and thus increase fire safety. Risks in respect of internal traffic at the works are being reduced and access control will be improved by reorganising traffic and parking arrangements in the gate area by 21. Accident frequency number of accidents/million working hours Near-miss incident reports number of near-miss incident reports/year 4 35 3 25 2 15 1 5 5, 4, 3, 2, 1, 24 25 26 27 28 29 21 24 25 26 27 28 29 21 Accident frequency Target Near-miss incident reports Target 3 Ruukki s Raahe Works environmental report 27

Glossary Accident frequency The number of accidents per million working hours resulting in absence of more than one day. Audit A systematic and documented verification process used to determine whether the function audited conforms to set criteria. Blast furnace A tall, cylindrical continuous operation furnace in which liquid iron is produced. COD Chemical Oxygen Demand, which indicates the amount of organic and other chemically oxidising materials in the water. Crude benzol A highly inflammable, toxic liquid, which is produced at a steel works as a by-product of the coking process. Cyanide A toxic substance formed by the reaction of carbon with nitrogen. Cyclone A cleaning device in which gas or liquid is given a swirling motion and the centrifugal forces produced are used to remove particulates from them. Dioxin A toxic heterocyclic organic compound. Environment The internal and external surroundings in which a company operates, including air, water, land, natural resources, flora, fauna, humans and the interaction between them. Environmental aspect An element of an organisation s activities, products or services that can interact with the environment. A significant environmental aspect has or can have a significant environmental impact. Environmental impact Any adverse or beneficial change to the environment caused by an organisation s operations, products or services. Iron reduction The freeing of the metal from its combination with oxygen and chemical compounds. ISO The International Organization for Standardization. ISO 141:24 is the international environmental management standard. ISO 91:2 is the international quality management standard. Ladle furnace An electrical heating system in which the temperature of the liquid steel is increased in the ladle or vessel used to carry and pour molten steel. Pellets Small, compressed balls of iron ore concentrate. Phenol A toxic, organic compound with antiseptic properties and a distinctive smell. Polycyclic aromatic hydrocarbons (PAH) Substances readily formed during the incomplete combustion of fuels or heating of organic compounds. PAH form a group which is made up of hundreds of different compounds. Sintering The process of agglomerating fine iron concentrates into lumps or sinters. Slab A cast steel product from which plates and strip products are hot rolled. Specific consumption or emission A consumption or emission calculated per unit of a product, in this case per tonne of steel. Steel tonne 1, kilograms of steel slab. Vacuum treatment A treatment in which steel is subjected to a vacuum to remove carbon, hydrogen and nitrogen. Environmental management system A management system that includes organisational structure, planning activities, responsibilities, practices, processes and resources to develop, implement and achieve the environmental policy. Environmental objective General environmental target set by an organisation itself to improve environmental matters. Environmental programme Actions, allocation of responsibilities and schedule used to achieve environmental objectives and targets. Environmental target A detailed, quantified requirement set by an organisation in order to achieve environmental objectives. Prefixes prefix symbol 1,,,, tera T 1,,, giga G 1,, mega M 1, kilo k.1 milli m. 1 micro μ

32 Ruukki s Raahe Works environmental report 27 PFI 3.2EN/5.28