Sustainability Performance H1 2022: Transcript

Sustainability Performance 2022

Thursday, 14th April 2022

Key Sustainability Metrics

Anik Michaud

Group Director, Corporate Relations and Sustainable Impact

Introduction

Welcome everyone to our first sustainability update of the year. We endeavour to do these updates twice a year, not because of the numbers themselves, though they are important, but because this is a journey with multiple steps and we want to make sure we engage and share these elements as we progress.

Health and safety

Covid impacts

Covid is still very much front of mind despite us all starting to learn to live with it; but as you know, infections are spiking again as restrictions continue to ease in many countries. We see the ongoing effects of the disease on our workforce health tracking, on attendance or absenteeism and on productivity, and we just cannot let our guard down. We continue to focus on keeping employees and community members safe through our WeCare programme and you can see the four pillars of the programme on the slide. We are flexing our ongoing health protocols to reflect the evolution of the disease in each part of the business and we are of course encouraging vaccination at every turn.

As you can imagine, some of these pressures have led to a slower start to the year operationally.

Consistent metric tracking

Sustainability compared to ESG

We track a consistent set of metrics to manage our performance across all aspects of sustainability. This is not just about ESG, this is about sustainability and ensuring we have a truly sustainable business across all dimensions. And Mark in his closing is going to address this point.

Sustainability report

You have seen the data points in our 2021 results and the Sustainability Report and I am not going to walk you through them all, but since Stephen is not presenting today, I will do the numbers and highlight a couple of points. We are not perfect and we know there is still a lot of work to do but having said that, we are making some progress and Mark will specifically cover the area of safety in a moment.

Progress on all key metrics

A continued reduction in GHG emissions, down 8% year on year despite 5% higher production volumes, which Mark will also touch on. Strong progress on the implementation of our leading Social Way 3.0 management system. I talked to you about this a year ago. It is a significantly higher bar than any that has been set before in the industry and we are making progress in the roll out. 49% of foundational requirements have now been fulfilled, up from 23% last year. Just to give you a sense of how high that bar really is, I would consider that the 49%implementation we achieved in 2021 represents a higher overall level of performance than the 96% we reported in 2019 against our old Social Way.

Finally, I'm delighted with the progress we are continuing to make on female representation in management, up from 27% to 31%.

Safety, Health and Environment

Mark Cutifiani

Chief Executive

Environmental journey

Good performance, more to be done

On safety, health, and environment, we continue to focus on our environmental journey. Eight years on, for the year's result we see some of our best performances, although as Anik said, there remains a lot to be done.

Two fatalities

Tragically, we have lost one colleague this year in an incident at the Moranbah colliery and unfortunately, we have also now reported the loss of a colleague from an incident back in 2021. Julian was making good progress but unfortunately has succumbed following medical complications. So it's been a pretty sad three weeks for us here in the business.

Trying to hit zero harm

It is my biggest regret that during my tenure we have not reached zero harm. We have reduced fatal incidents by over 90% but again we haven't hit zero and certainly in my view, and I know Duncan has said this, it will be his most important challenge going forward. So as he takes the business forward, I know it's his top priority and certainly commitment to all of our colleagues to provide a safe workplace remains our most important objective and certainly front and centre in terms of our values.

Focus on planned work

We did record a 59% reduction in safety incidents over the last few years, although as Anik pointed out, the Covid issues continue to impact our planned works through the operation. As a consequence, we have seen a flattening off of performance, and so there are some very specific interventions that we are taking out as we seek to try and take that to the next level. First is going to focus on getting a much higher proportion of planned work, which has dropped off through the Covid period, and that has certainly impacted our ability to deliver a safer working environment. That is where we've got to go.

Operations impacted

It does also impact on the operations; and as Anik said earlier, we have had a bit of a tough start. We have had record rainfall in South Africa and Brazil in the first quarter. That impacts the way we prepare areas and that has also impacted our planned work, which has had broader implications. So a tough quarter but something that we will pick up and try and improve as we go forward.

Significant improvement in health and environmental cases

The good news is that we have seen 92% reduction in occupational health cases and 97% reduction in environmental incidents where the increase in planned works from where we started a number of years back has certainly driven significant performance improvement. Again, we have got to keep our eyes on that planned work and make sure it continues to go up as we continue to eliminate the incidents that we've seen.

So generally good progress but a little bit tougher over the last couple of years with the Covid impacts. Something we are all working on.

Level three environmental incident

In 2021 we recorded one level three environmental incident related to a leakage of discharge from a water transfer line in our base metals plant in the platinum business. That issue has been corrected and we have increased the frequency of pipeline inspections and our repair and maintenance work has certainly been upgraded as part of that process. So that is a very important point to make given the incident that we recorded last year.

Elimination of Fatalities Taskforce

Again, whilst we have made great progress on a number of fronts, the Elimination of Fatalities Taskforce is being reinvigorated to try and take us to that zero target we were talking about. We have also been actioning a lot of the key programmes that came out of that work as well, and that will be our focus during the next 12 months.

Strategy and purpose

Future Smart Mining

You will be familiar with our purpose and strategy context that we talk about for the business. In our case, our strategy is designed to live up to our purpose and with Future Smart Mining we set pathways and plans to deliver on that strategy. So our Sustainable Mining Plan is ultimately to deliver outcomes aligned with our purpose and that is of course reimagining mining to improve people's lives and to deliver enduring value in its many different forms for our range of stakeholders, and that includes obviously shareholders, employees, our local communities in particular, the broader governments and communities that we work within, and all of our stakeholders, including NGOs, that we do listen to and engage with to try and help us improve our business as we go forward.

Sustainable Mining Plan

Three pillars

In the slide we are showing the three pillars of our Sustainable Mining Plan. They include stretch goals that you will now be familiar with. These goals and targets are embedded into our business planning at a very granular level, so we cascade the responsibilities through the organisation, and it is the same way we manage our operational objectives, which is making sure that the things that we're targeting are part of daily life for every individual within the organisation. Similar safety, health, environment, and social metrics are embedded in our executive and senior management pay mechanisms, both bonuses and long-term incentives, including specifically around emissions and off-site job creation. That has certainly been a very strong topic of conversation with many of our stakeholders.

Energy transition

On the energy transition, a key part of story is how we contribute to the global energy transition both through our activities on the ground and through the wider impacts of our portfolio in the business.

Supply chain and maintenance schedules

To follow up Anik's point around the impacts of Covid on our operations, which you can see that the production line, these impacts continue partly due to still stretched supply chains throughout the global supply for mining products, and that is something much broader we have seen and it is being exacerbated further with the Russian-Ukraine conflict. These impacts continue partly due to stretched supply chains but also due to the residual impacts on our maintenance schedules, which can take some time to catch up. So a lot of work in that area of the business and we will certainly see that continue through the next 12 months.

Safety, maintenance, impact whole business

As we have said for some time now, in 2021 we were operating at around 95% capacity; and from our point of view, we are still reviewing each operation to bring practices into line with our expectations, and that is on the plant work so that we can deliver on our potential. I think we've still got a way to go and certainly there is a lot more work to be done. I have been travelling through the operations over the last few weeks. We are reinforcing those measures, making sure we are focused on safety and that we get our maintenance practices back into line along with our mine planning schedules so that we improve first safety, our execution of our key development programmes and then making sure that that is coming through on the productivity line. Certainly, from my point of view, safety is the first point of call but these things impact other parts of the business as well and we acknowledge that it is a whole issue in approach to the way we run the business.

Efficiency improvements

This efficiency improvement is driven by two factors so far and our improvements in terms of carbon efficiency, we have improved around 10%, and we are down 18% on greenhouse gas emissions since 2017. We have made good progress driven by the renewable energy contracts across South America, which will be fully in place by 2023, and to our continued drive towards better operating efficiencies. So two key contributors for us in those two areas and obviously we will continue to try and extend our renewable footprint and improve our operating efficiencies, again with a bit more work to be done.

Allocating capital to support a sustainable future

On the other way which we are supporting the world's movement towards a more sustainable future, this is focused on the strategic allocation of our capital towards future-enabling metals and minerals. The simple message - the world needs the metals and minerals we produce if we are going to decarbonise energy and transport at the required pace. In particular, with us our share of copper growing as Quellaveco approaches start up and also notably even our met coal is of high quality, which is very important in terms of cleaning up and reducing emissions from steel making. We are playing to trends beyond decarbonisation, with crop nutrients playing one of the other key macro roles in our portfolio. A growing consumer-led population in a world with reducing amounts of available agricultural land, crop nutrients becomes a key way for us to play in that space as well. So we are growing our impact on the right areas