ArcelorMittal South Africa : CSP External Audit Report for AMSA Vanderbijlpark April 2022

ArcelorMittal LimitedSouthAfrica

2022 External Environmental Performance Audit on the RoD for the Carbon Separation Plant

Vanderbijlpark, Gauteng Province

21 April 2022

Prepared for:

Ilze Broekman

Of

ArcelorMittal: Vanderbijlpark Steel

QUALITY MANAGEMENT

Report Title	2022 External Environmental Performance Audit on the RoD for the Carbon Separation Plant
Project Number	CIG/ENVSOL/22/PROJ/0085
Draft Report	Final Report	Revision 1
Date	20 April 2022	21 April 2022
Author	Malebogo Mosepele	Malebogo Mosepele
Reviewed By	Renee RensburgJansevan	Renee RensburgJansevan
Authorised By	Jacques Harris	Jacques Harris

DISCLAIMER

Information contained in this report is based on information received from the client and other external sources. Where data supplied by the client or other external sources, including previous site investigation data, have been used, it has been assumed that the information is correct unless otherwise stated. No responsibility is accepted by CIGroup Environmental (Pty) Ltd (CIGroup) for incomplete or inaccurate data supplied by others. We are aware that there might have been project or operational changes since this report was submitted, however this report and its findings is based on the last information received from the client and/or the site visit undertaken. To the best of our knowledge the assumptions and findings are correct at the time of submission of the report. Should any of the assumption or findings prove to be incorrect subsequent to submission of the report we as the specialist cannot be held accountable. Note that whilst CIGroup has made every effort to obtain the correct information and to carry out an appropriate, independent, impartial and competent study, CIGroup cannot be held liable for any incident which directly or indirectly relates to the work in this document, and which may influence the client or on any other third party.

CONFIDENTIALITY

The content of this report will be kept confidential. Copies of the report will not be distributed to other parties except with the expressed permission of the client. The exception to this confidentiality being the requirement from the relevant authority or department and as a result of legislated public review requirements. Copyright is vested in CIGroup in terms of the Copyright Act (Act No. 98 of 1978) and no use, reproduction or duplication of this report may occur without the written consent of the author.

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DECLARATION OF INDEPENDENCE

CIGroup Environmental (Pty) Ltd (CIGroup), as the Environmental Solutions specialists, were appointed by ArcelorMittal to conduct the 2022 External Environmental Performance Audit on the RoD for the Carbon Separation Plant. CIGroup does not have a vested interest in the proposed activity proceedings, will not engage in and have no conflicting interest in the undertaking of the activity. CIGroup has provided all information at their disposal regarding the external audit, whether such information is favourable to the Client or not.

21 April 2022

Malebogo Mosepele Environmental Advisor CIGroup Environmental (Pty) LtdDate

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EXECUTIVE SUMMARY

ArcelorMittal South Africa Vanderbijlpark Works (ArcelorMittal) is one of the world's largest inland steel mills and the largest supplier of flat steel products in sub-Saharan Africa. The central focus is to maintain and grow its established share of the local market through development of additional value-added products and a focus on industry partnerships. Its international position is being refined by focusing on identified high profit export markets and meeting international levels of operational excellence, product quality and customer satisfaction.

The plant's steel products are manufactured in an integrated process. Raw materials such as iron ore, coke and fluxes are charged to blast furnaces where they are converted to liquid iron. The liquid iron is refined in basic oxygen furnaces to produce liquid steel. The liquid steel is cast into slabs, which are hot rolled into heavy plate in a plate mill, or into coils in a strip mill. The coils are either sold as hot rolled sheets in coil or processed further into cold rolled and coated products, such as hot dip galvanized, electro galvanised and pre-painted sheet.

AMSA was issued a Record of Decision (RoD) by the Gauteng Department of Agriculture, Conservation and Environment (GDACE), now the Gauteng Department of Agriculture and Rural Development (GDARD), for the installation and operation of a Carbon Separation Plant (CSP) (RoD number: GAUT 002/05-06/0510) in terms of the National Environmental Management Act, 1998 (Act No. 107 of 1998) (NEMA) and the Environmental Impact Assessment Regulations, 2006.

In terms of the RoD, AMSA is required to appoint an independent external auditor, to conduct an Environmental Performance Audit (EPA) on compliance with the conditions of the RoD on an annual basis. CIGroup was appointed to undertake the EPA audit for 2021. The external auditor's assessment was based on the information provided, interviews conducted, and observations made during the site inspection on 22 March 2022. This information was inputted into a compliance checklist and informed the external auditors' determination of compliance.

The external auditor found ArcelorMittal to be complaint to all conditions of the RoD. It is evident to the external auditor that the amount of effort and continuous actions undertaken at AMSA have resulted in the significant level of compliance to the RoD presented in this External Audit Report.

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TABLE OF CONTENTS

• 1 INTRODUCTION .................................................................................................... 1

• 1.1 Background .......................................................................................................... 1

• 2 EXTERNAL AUDIT PROCESS .................................................................................. 2

• 2.1 Appointment of the External Auditor .................................................................... 2

• 2.2 Confirming the Scope of the Audit ........................................................................ 3

• 2.3 Audit Preparation and Planning ............................................................................ 3

• 2.4 Conducting the Audit and Site Inspection ............................................................. 4

• 3 CIGROUP'S RISK-BASED AUDIT APPROACH ......................................................... 5

• 3.1 Compliance Assessment ....................................................................................... 5

• 3.2 Compliance Analysis ............................................................................................. 7

• 3.3 Determination of Level of Effort or Action ............................................................ 7

• 3.4 Identification of Remedial Action Options ............................................................ 8

• 3.5 Risk-Based Audit Reporting Matrix ....................................................................... 8

• 4 ROD AUDIT FINDINGS .......................................................................................... 9

• 5 EXTERNAL AUDITOR'S DETERMINATION OF COMPLIANCE ................................. 18

• 6 CONCLUSION ...................................................................................................... 19

LIST OF FIGURES

Figure 1.1: Location of the ArcelorMittal Vanderbijlpark Works . ............................................... 1

Figure 3.1: Risk-based Audit Approach ................................................................................. 6

Figure 3.2: Illustrative Risk-Based Audit Reporting Matrix . ..................................................... 9

Figure 3.3: Illustrative Level of Risk Reporting Matrix . ........................................................... 9

Figure 5.1: ArcelorMittal's Risk-Based Audit Reporting Matrix (RoD) . ..................................... 18

Figure 5.2: ArcelorMittal's Level of Risk Reporting Matrix (RoD) . ........................................... 18

LIST OF TABLES

Table 2.1: Details of the Independent External Auditor ........................................................... 3

Table 3.1: Assessment Categories . ...................................................................................... 7

Table 4.1: RoD Compliance Checklist . ................................................................................ 10

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