icmm annual review 2012 pdf

8/13/2019 ICMM Annual Review 2012 PDF

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Annual Review2012

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respectru

accountability

Richard Adkerson, President and Chief ExecutiveOfficer, Freeport-McMoRan Copper & Gold

The challenge we face is to continuouslyadvance our sustainable development

performance so that we can provideeconomic and social benefits to ourstakeholders, and continue to build strongpartnerships with local communities andhost countries in which we operate.

Catherine Coumans, MiningWatch Canada

Distrust will continue so long asindividual companies professto respect human rights or, forexample, the need to achieve asocial licence to operate, whilelobbying against mechanisms thatensure these rights in policy or law.

Charles Jeannes, President andChief Executive Officer, Goldcorp

Perception about the industry hascome a long way, but we still havea way to go. Advances in modern,sustainable mining techniques as wellas efforts in the areas of environmentstewardship, corporate governance andisclosure have supported improvingpublic perceptions. These efforts arestarting to achieve external recognitioamongst socially responsible investorgovernments, NGOs and civil society.

TR

UST


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3 ICMM Building trus

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ntegr tMarketa Evans, Extractive Sector CSR Counsellor,Government of Canada

There are few short cuts to trustbuilding. It relies on industry tocommit to continuous disclosure,information sharing, openness toengagement and dialogue.

Jamie Sokalsky, President and ChiefExecutive Officer, Barrick

The mining industry has to create shared value,whereby both communities and shareholdersbenefit from the development of naturalresources. If we share common goals, we canmore easily build the trust thats necessary fora successful mining operation today.

Andrew Michelmore, Chief Executive Officer, Minerals and Metals Group (MMG)

Trust is a long-term investment. Forus, ICMM sets a benchmark and a guideto ensure we protect and build thatinvestment for the long term.

Yoshimasa Adachi, President and Chief Executive Officer, JX Nippon Mining & Metals

The mining industry must win the public trust to stay in our ownbusiness. To this end, our first priority must be full compliancewith laws and regulations, but we also need to go beyond our legalobligations, fulfilling our duty to society through corporate socialreponsibility programs and engaging in regular communicationwith the public about those activities.

Jochen Tilk, President and ChiefExecutive Officer, Inmet

Trust is a vital componentof our bond with society andespecially with our localcommunities and stakeholders.ICMM members are workinghard to build broad-based and

durable privilege to operate byimproving social performanceand addressing concernsraised by their stakeholders.


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The International Council on Mining and Metals (ICMM) was establishedin 2001 to act as a catalyst for environmental and social performanceimprovement in the mining and metals industry. Today, the organizationbrings together 22 mining and metals companies and 34 national and regionalmining associations and global commodity associations to address the coresustainable development challenges faced by the industry.

ICMM is a not-for-profit association formed under the Canada CorporationsAct. Its 24 permanent staff members are all based at ICMMs premises in

Portman Square, London.

ABOUT THIS REVIEW

Welcome to ICMMs Annual Review 2012. This publication highlights some ofthe most significant events ICMM has been involved with in 2012, reviews theprogress we are making with our various work programs and outlines some ofthe challenges we face moving forward into 2013.

The theme of this years review is building trust. Trust is central to what we doat ICMM. It underpins the collaborative relationships we have, both with ourmembers as well as all the other stakeholders involved in our work. ICMMsfocus is on improving sustainable development performance in the mining

and metals industry. Details of the performance of our member companies inmeeting their member commitments are on pages 12 to 13.

In 2012, ICMM set out its strategic direction for the next three years with thenew Strategy and Action Plan (page 14). At the same time, we reaffirmed ourvision, values, goal and objectives. It is partly through establishing and acting inaccordance with these values that we are able to build trust as an organization.Examples of how ICMM has worked to demonstrate each of its values in 2012can be found throughout this review on pages 18 to 25.

We also launched an important new series of publications in 2012, which wehope will both inform and prompt dialogue and discussion about miningscontribution to sustainable development (page 16).

Reports from our work programs Social and Economic Development,Environment and Climate Change, Health and Safety, Materials Stewardship,Communications are featured on pages 18 to 27.

Financial information for the organization can be found towards the back of thereview (page 28). For a more regular update on ICMMs work, please subscribeto our online news service by emailing us at [email protected] or follow us@icmm_com on Twitter.

We hope you enjoy the review.

ABOUT ICMM

4 About ICMM and this review

5 Vision, values, goal, objectives

6 Chairs foreword

7 Council members

8 Presidents report

10 Members

12 Member performanceassessment

14 Strategy and Action Plan

20132015

16 Minings contribution tosustainable development

18 Social and economicdevelopment

20 Environment and

climate change

22 Health and safety

24 Materials stewardship

26 Strategic alliances

27 Communications

28 Financials

CONTENTS

4 ICMM Building trust


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Improve sustainability performanceTo catalyze and facilitate the definition and continuous improvement ofsocial, environmental and economic practices.

Listen to others and anticipate changeTo listen to others, identify public concerns and anticipate change somembers can better understand evolving societal values, proactivelyaddress risks, avoid crises and serve in a leadership position inaddressing issues of public concern.

CommunicateTo identify and communicate the nature of the contribution of themining, minerals and metals industry to sustainable development.

Strengthen engagement capacityTo build and maintain effective relationships with those important forensuring the industrys licence to operate.

Seek fair and consistent regulationTo seek and support the collaborative development and implementationof fair and consistent policies and regulations for governing theperformance of companies involved in mining-, minerals-, and metals-related activities around the world.

Represent

To represent the collective views and interests of member companiesas appropriate and act as a principal point of contact with the industryskey constituencies in the international arena.

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2

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CareFor the safety, health and well-being of workers, contractors,host communities and the usersof the materials we produce.

RespectFor people and the environment,ensuring that we are sensitiveand responsive to the values ofhost societies.

IntegrityAs the basis for engagement

with employees, communities,government and others.

AccountabilityTo do what we say we will do anduphold our commitments.

CollaborationWorking with others in an open,transparent and inclusive way aswe address the challenges.

Leading companies workingtogether and with others tostrengthen the contribution ofmining, minerals and metalsto sustainable development.

Working collaboratively with others, toenhance the value creation role and long-termnet contribution of the mining, minerals andmetals industry and its products to people, theenvironment and economies.

VISION AND VALUES GOAL AND OBJECTIVES



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Marius Kloppers, ICMM Chair

It has been an important year for ICMM.As an organization, ICMMs role is towork with its members and others tostrengthen social and environmentalperformance and through that, miningand metals contribution to sustainabledevelopment.

Strengthening that contribution isfundamentally important to our industry.The mining and metals industry providesmany benefits to society, includingemployment, business development,training, education and capacity building,as well as the more obvious ones suchas royalties and taxes. Through ourengagement with stakeholders, we mustcontinue to build a deeper understandingof the broad-ranging contributions theindustry makes to economies andsocieties at large.

Demand for the minerals and metals weproduce is expected to increase overtime, driven by population growth and theway societies are evolving. The industryneeds to make long-term investments tomeet this demand, often in the face of anuncertain economic outlook. Industryneeds to partner with stakeholders inproviding predictable policy frameworksthat reflect a full understanding of thebroad contribution the mining and metals

industry makes to society. In many ways,ICMM was created just over a decade agoto close this gap in understanding. It is amajor, critical challenge.

As ICMM chair, I work with my fellowindustry CEOs on ICMMs Council to setthe overall priorities and governancemechanisms for the organization. As a

Council, we are determined that ICMMfocuses its resources and efforts wisely on where it can make a difference toaddressing the sustainabilitychallenges we face.

To that end, we encouraged a numberof important actions in 2012 that are nowentrenched for the next three years inICMMs Strategy and Action Plan20132015. Internal controls have beenstrengthened, priorities have beenfocused and governance processeshave been streamlined. These are allsignificant and important steps forensuring ICMMs ongoing success.

In hosting its second Health and SafetyConference in Santiago, Chile, ICMMemphasized its commitment to theissues of health and safety. The three-day conference was attended by over 300health and safety experts and mining andmetals executives, and opened by theChilean Minister of Mines, Mr Hernn deSolminihac. The ICMM Council is deeplycommitted to further reductions in injury

rates and the absolute elimination offatalities within our businesses.

Mining and metals are vital foreconomic growth and prosperity, andICMM continues to help demonstratethe contribution of mining to society.In 2012, we produced a new series ofpublications that detailed miningscontribution to sustainable development.These publications offer a fresh approach

to the subject and are a starting point forthe industry and others to more fullyexamine the benefits, costs, risks andresponsibilities related to mining andmetals in the twenty-first century.

It was pleasing then for ICMM to receiverecognition in 2012 for the new series inthe form of the Mining Journals

Outstanding Achievement Award forsustainable development. Equally, it wasrewarding to have ICMMs contributionsacknowledged in the InternationalInstitute for Environment andDevelopments (IIED) review publicationMMSD+10: reflecting on a decade ofmining and sustainable development.Besides commending a number ofICMMs initiatives and affirming ourorganization as a foundation for drivingchange throughout the industry, IIEDhighlighted the fact that it is dialogueand collaboration that underpinICMMs success.

And it is here that trust, the theme ofthis years review, is paramount.ICMMs Council of CEOs recognizes thevalue of strong trusting relationshipsamong the industry and its keystakeholders. It is why we as a group ofCEOs ordinarily in competition witheach other come together at ICMM tocollaborate in strengtheningenvironmental and social performanceand through that, our contribution to

sustainable development.

Marius Kloppers, Chair

CHAIRS FOREWORD


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Marius KloppersICMM ChairChief Executive OfficerBHP Billiton

Cynthia CarrollICMM Deputy ChairChief Executive OfficerAnglo American

Mark CutifaniICMM TreasurerChief Executive OfficerAngloGold Ashanti

Patrice MotsepeExecutive ChairmanAfrican Rainbow Minerals

Luc OurselChief Executive OfficerAreva

Jamie SokalskyPresident and Chief Executive Officer

Barrick

Thomas Keller LippoldPresident and Chief Executive OfficerCodelco

Richard AdkersonPresident and Chief Executive OfficerFreeport-McMoRan Copper & Gold

Charles JeannesPresident and Chief Executive OfficerGoldcorp

Nick HollandChief Executive OfficerGold Fields

Svein Richard BrandtzgPresident and Chief Executive OfficerHydro

Jochen TilkPresident and Chief Executive OfficerInmet

Yoshimasa AdachiPresident and Chief Executive OfficerJX Nippon Mining & Metals

Simon ScottActing Chief Executive OfficerLonmin

Andrew MichelmoreChief Executive OfficerMinerals and Metals Group

Hiroshi YaoPresident

Mitsubishi Materials

Richard OBrienPresident and Chief Executive OfficerNewmont

Sam WalshChief Executive OfficerRio Tinto

Nobumasa KemoriPresidentSumitomo Metal Mining

Donald LindsayPresident and Chief Executive OfficerTeck

Murilo FerreiraPresident and Chief Executive OfficerVale

Mick DavisChief Executive OfficerXstrata

COUNCIL OFFICERS COUNCIL MEMBERS



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Dr R Anthony Hodge, ICMM President

ICMM has much to be proud of. In its 2012discussion paper MMSD+10: reflectingon a decade of mining and sustainabledevelopment, the International Institutefor Environment and Development (IIED)notes that ICMM is now considered theport of call on industry standards forbest practice.

Yet, at a recent meeting, one of ourCouncil members quietly noted thatthe greatest insurance policy I haveis community trust. We know that themining and metals industry continuesto face a substantial trust deficit. At thesame time, mining-related conflict inmany countries is increasing the tragicevents at Marikana in South Africa beingthe most high-profile example in 2012.

Recent work by public opinion researchconsultants GlobeScan highlights the

scale of the trust challenge, particularlyin countries such as South Africa andPeru. ICMM and its members have a vitalrole to play in reducing this trust deficit.

The ICMM values care, respect,integrity, accountability and collaboration are key drivers of trust. But trust mustbe founded on more than words. It needs

concrete actions that demonstrateconsistent delivery of commitments.It requires effort to understand theperspectives of others and solutionbuilding that respects the values of allinterested parties.

Within the industry, there is a growingsense that the full benefits of mining

and metals activities and the resultingproducts are rarely understood andrecognized, particularly when publicpolicy is debated and enshrined in law.This realization gives rise to a feelingof frustration. But the industry hasnot been very good in articulatingthe full benefits, costs, risks andresponsibilities of mining and metalsactivities and products.

However, while the industrys story isnot being fully recognized, neither is thatof the host communities and countries.This overall lack of understanding andarticulation of the full range of benefits,costs, risks and responsibilitiesassociated with mining and metals isa serious gap. It is leading to baddecisions, hard feelings, underminedtrust and, in the extreme, conflict.

ICMMs work on understanding the fullcontribution of mining and metals is justbeginning. It is a critical task andfundamental to building trust. During2012, we launched our Minings

contribution to sustainable developmentseries of five publications. For the firsttime, we published a listing of the role ofmining in the economies of 212 countries.This is a small step forward and 2013 willsee more work on this front.

Like all organizations, ICMM mustperiodically reassess its own activities

and ensure priorities are strategic andactivities are focused. The year 2012saw completion of our next Strategy andAction Plan (20132015). Mining andmetals contribution is the integratingthread of our work during this next three-year cycle. Importantly, we introduceda comprehensive project prioritizationprocess. We have also put in place a set

of organizational performance indicatorsthat extends the system of performancemeasurement and progress assessmentintroduced in the previous action plan.Matching all of this is a streamlining ofICMM structure that matches thechanging priorities moving forward.

For many across the world, mining isseen as dangerous and injuries andfatalities inevitable. In 2012, we held theICMM Health and Safety Conference inSantiago, Chile. What struck me aboutthis event was the attitude of theparticipants. The inevitability ofinjuries and fatalities was put aside infavour of an unequivocal commitmentto fight fatalities. This is a significantstep change in attitude.

On another front, we continued tostrengthen our capacity to recognizetrends in society that might lead tochanging social, economic, political,cultural and environmental conditionsimportant to both our industry andsociety in general. More than ever, we

need to anticipate emerging trends andaddress challenges positively to avoidthe reactive and defensive stance thathas so often characterized the miningand metals industry in the past.

The richness of our work programs isreflected throughout this review. All of itis aimed at reducing the industrys trust

PRESIDENTS REPORT


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deficit through strengthening ourcontribution to sustainable development.Doing so is a huge but critical challenge.

ICMMs team is deeply committed,highly professional and fully engaged.I am proud to work with my colleagues inthe secretariat and the many individualsfrom across our 22 company members

and 34 associations who contribute vastamounts of time to the projects we workon together. Twice a year we bring some200 people together from across theworld to review, strengthen and directour work. For our members this is ahuge commitment and without thiscommitment, we cannot succeed.

Finally, I would like to extend awelcome to ICMMs newest membercompany, Inmet, who passed throughthe ICMM new member process in2012. We look forward to continuingour work with them, and the rest of ourmembership, as we move into 2013.

Dr R Anthony Hodge, President

Kathryn McPhail is moving onto a new a career challenge as VicePresident of Sustainability at BGGroup, having been with ICMM since itsinception. I would like to thank Kathrynfor her outstanding contribution toICMM over the past decade on behalfof our members, employees and ourmany stakeholders.

Kathryn, who worked for the WorldBank prior to joining ICMM, wasinvolved in the genesis of ICMM. She

joined ICMM in 2002 for a limitedperiod in order to help establish theorganization, and has been with usever since. Over the last 10 years shehelped guide ICMM through its earlyevolution, contributed to the creationand establishment of our coreprinciples and led ICMMs highlyregarded Mining: Partnerships forDevelopment project.

No one who has met Kathryn canbe in any doubt about her passion,drive and commitment to her work,shaping ICMMs role as a change

agent for the improvement of socialand environmental performance inthe mining and metals industry. Inparticular, she has been a leadingadvocate of collaboration and open,honest dialogue as a means tocreating winwin situations for hostcommunities, developing countriesand companies.

We will miss Kathryn at ICMM thoughwe look forward to collaborating withher in her new role.

We wish her every success in her newposition and hope that she continues tomake a difference through her work,just as she has done so effectively atICMM these past 10 years.

KATHRYN MCPHAIL



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ICMM has 22 member companies and34 member associations. Our membercompanies are many of the largest in thesector based on 2012 data for the valueof mineral production, five of the largest10 companies are ICMM members.

Together, our members operate at over1,200 sites in 68 countries across theglobe. Exploration activities extendthis reach significantly. They areresponsible for a significant proportionof global minerals production forexample, copper (47%), platinum groupmetals (42%), iron ore (37%), gold(34%), nickel (32%) and zinc (22%) (Intierra RMG, Sweden).

Our member associations are amix of national and regional miningassociations and global commodityassociations. Through them we reachanother 1,500 companies in the sector.

They contribute specialist (regionalor commodity-specific) expertise andknowledge to the development andimplementation of ICMMs work. Theyact as partners in raising the profile ofthe sustainable development agendawithin the industry. The ICMM-hostedAssociations Co-ordination Group servesas a forum for knowledge exchange on

issues of common interest.For the fourth time in the annual review,we have conducted an assessmentof the progress that each membercompany is making against theirreporting and assurance commitments.The table overleaf gives full details.

For their 2012 reports, members wererequired to report in-line with theGRI G3 Guidelines and the Mining andMetals Sector Supplement, declarean application level of A and obtain

MEMBERS

independent external assurance ofsubject matters 15 (see the assuranceprocedure publication for details).

We have seen our members makesignificant progress again this year.Twenty of our 22 member companiesobtained a G3 A+ application levelcompared to 17 last year and 15 in 2010In addition, 21 companies have soughtexternal assurance in 2012, an increaseof three companies from 2011.

The only member company not todeclare a G3 application level was Arevawho joined ICMM in 2011. The full ICMMrequirements apply within two years ofbecoming an ICMM member.

NORTH AMERICA EUROPEMEMBER OPERATIONS

The maps are indicative of whereour 22 member companies arecurrently active across the globe;we do not claim that the datais comprehensive (especiallyregarding early-stage explorationactivity and post-closure). The sites

displayed range from pre-feasibilityexploration sites through minesunder construction to operatingor temporarily closed mines,refineries and smelters. Pleasenote that in some areas a single dotrepresents multiple operations in aconcentrated area.


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Cmara Argentina de Empresarios Mineros (CAEM)

Cmara Asomineros Andi Colombia

Cmara Minera de Mxico (CAMIMEX)

Cmara Minera de Venezuela (CAMIVEN)

Chamber of Mines of South Africa

Chamber of Mines of the Philippines

Chamber of Mines of ZambiaCobalt Development Institute

Consejo Minero de Chile A.G.

Eurometaux

Euromines

Federation of Indian Mineral Industries

Ghana Chamber of Mines

Instituto Brasileiro de Minerao

International Aluminium Institute

International Copper Association (ICA)

International Iron Metallics Association

International Lead Association

International Manganese Institute

International Molybdenum Association (IMOA)

International Wrought Copper Council

International Zinc Association

ITRI

Japan Mining Industry AssociationMinerals Council of Australia

Mining Association of Canada

Mining Industry Associations of Southern Africa (MIASA)

National Mining Association (NMA) USA

Nickel Institute

Prospectors and Developers Association of Canada (PDAC)

Sociedad Nacional de Minera (SONAMI) Chile

Sociedad Nacional de Minera, Petrleo y Energa (SNMPE) Peru

World Coal Association

World Gold Council

ASSOCIATIONS

SOUTH AMERICA AFRICA AUSTRALASIAASIA


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Sustainabledevelopment (SD)

or integratedreport for

the financialyear ending

1 2 3 4

Alignment between members policyframeworks on SD issues and ICMMs SD

principles and mandatory requirements setout in ICMMs position statements**

Process and outcome foridentifying and prioritizing ma

SD risks and opportunitie

Reported on Assured Reported on Assu

Company subject matter 1 subject matter 2

African Rainbow Mineralswww.arm.co.za

30 June 2012

Anglo Americanwww.angloamerican.com

31 December 2011

AngloGold Ashantiwww.anglogoldashanti.com

31 December 2011

Areva*

www.areva.com31 December 2011

Barrickwww.barrick.com

31 December 2011

BHP Billitonwww.bhpbilliton.com

30 June 2012

Codelco*

www.codelco.com31 December 2011

Freeport-McMoRanwww.fcx.com

31 December 2011

Goldcorpwww.goldcorp.com

31 December 2011

Gold Fieldswww.goldfields.co.za

Integrated annual reportfor the six months ending

31 December 2011

Hydro*

www.hydro.com31 December 2011

Inmet*

www.inmetmining.com31 December 2011

JX Nippon Mining & Metalswww.nmm.jx-group.co.jp

31 March 2012

Lonminwww.lonmin.com

30 September 2012

Minerals and Metals Groupwww.mmgroupltd.com

31 December 2011

Mitsubishi Materialswww.mmc.co.jp

31 March 2012

Newmontwww.newmont.com 31 December 2011

Rio Tintowww.riotinto.com

31 December 2011

Sumitomo Metal Miningwww.smm.co.jp

31 March 2012

Teckwww.teck.com

31 December 2011

Valewww.vale.com

31 December 2011

Xstratawww.xstrata.com

31 December 2011

MEMBERS


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5 6 7 8 9

Systems and approachesto manage material SD risks

and opportunities

Performance for theidentified SD risksand opportunities

GlobalReportingInitiative

Reported on Assured*** Reported on Assured G3 application level

subject matter 3 subject matter 4 subject matter 5

A+

A+

A+

A+

A+

A+

A+

A+

A+

B+

A+

A+

A+

A+

A+

A+

A+

A+

A+

A+

A+

NOTESColumn 1: a dot in this column indicates thatmembers have reported on the alignment of theirpolicies with ICMMs 10 principles (ie subject matt1) and any mandatory requirements set out inICMMs position statements. In some cases, this haincluded a tabular summary of the 10 principlesmapped against a companys policies.

Column 2:a dot in this column indicates thatmembers have sought independent third partyassurance on subject matter 1.

Column 3:a dot in this column indicates thatmembers have reported on processes to identifyand prioritize the SD risks and opportunities facedby the business during the reporting period and thoutcome (ie its list of material issues, subjectmatter 2).


Column 5:a dot in this column indicates thatmembers have reported on the systems andapproaches that the company is using to manageeach (or a selection) of the material SD risks andopportunities (ie subject matter 3).


Column 7: a dot in this column indicates thatmembers have reported on their performanceduring the given reporting period for each (or aselection) of the identified material SD risks andopportunities (ie subject matter 4).


Column 9:the letter in this column indicates acompanys self-declared application level of the GRG3 Guidelines (ranging from A to C, ie subject matte5). The application levels indicate whether thereporting company is a beginner (C), intermediate(B) or advanced (A) reporter. To achieve a GRIapplication level of A, companies must reportagainst the indicators in either the pilot Mining andMetals Sector Supplement (MMSS) or the final

MMSS, produced by GRI to guide reporting in themining and metals sector. The + in this columnindicates that members have sought independentthird party assurance on subject matter 5.

*Areva, Codelco and Hydro became members in2011 and Inmet became a member in 2012. Thefull ICMM requirements apply within two yearsof becoming ICMM members.

**In a number of instances, there is still someambiguity about whether all applicablerequirements of ICMMs position statementsare fully addressed. ICMM will work withmember companies to ensure this aspect isclarified in all 2013 member reports.

***In a number of instances, the existence ofmanagement systems and approaches isimplied rather than explicitly stated in theassurance statement. ICMM will work withmember companies to ensure this aspect isclarified in all 2013 member reports.


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ICMMs latest strategy was finalizedand approved in 2012. The Strategy andAction Plan 20132015 sets ICMMsstrategic direction for the next threeyears. Development and approval of thestrategy was made against a backdropof significant change globally, nationallyand locally.

At a global level, we see strong demandfor minerals and metals continuing inthe long term though unstable economicconditions will greatly challenge theindustry. The mining-related role ofmany low- and middle-incomecountries continues to increase.However, trust in the mining and metalsindustry remains low and there aredemands for greater transparencylinked to increasing social awarenessof consumers. Interestingly, there isincreasing willingness from civil societyorganizations to work with industry.

At a country level, concern about healthand safety in the mining and metalsindustry continues. And resourcenationalism remains apparent. Politicaladvantage, and a sense that nations arenot receiving their fair share of thebenefits derived from mining andmetals, continues to prompt somecountries to consider such actions asincreased taxes and royalties andgreater controls on foreign participation.

Often, these steps are being taken withminimal consultation and limitedunderstanding of the full range ofbenefits, costs, risks and responsibilities

associated with mining and metalsmanufacturing. Strengthening thisunderstanding which amounts to anexpression of mining and metalscontribution to sustainable development is the integrating theme of the20132015 strategy.

At the local level, mining-related

conflict is increasing. The Mines andCommunities website detailed 40community conflicts between Januaryand August 2012, up from 36 in 2011.Geographically, conflict is also morewidespread, being reported in 21countries (mostly in Latin America andAsia, but also in Africa, Canada andNew Zealand), up from 13 in 2011.

ICMM recognizes the increasingcomplexity and range of issues facedby the mining and metals industry andthat no single interest can address theseissues effectively. Collaboration isessential in bringing together companies,governments and civil society to addressthese issues.

To effectively operate in theenvironment described above, ICMMmust be focused and strategic in whatit does. To that end, the Strategy andAction Plan entrenches three keyadministrative improvements.

First, we have introduced an annual

project prioritization process based onan assessment of the value created bythe project outputs relative to theresource inputs.

Second, we have streamlined ICMMsstructure to reflect new priorities andthe governance changes that have beenapproved. Matching human resourcesadjustments have been made, includingthe appointment of Aidan Davy in a newrole as deputy president and seniorprogram director.

And third, we have introduced aconcrete set of organizational keyperformance indicators to improvethe performance measurementassessment system presented in theprevious Strategy and Action Plan.

Looking forward, the plan outlines anumber of questions that ICMM and itsmembers need to reflect on. Are ouractions really achieving the kind oflasting change that is needed? Shouldwe be setting much clearer aspirationalgoals in terms of how we would like themining and metals industry to be orare our task-oriented goals adequate?

Over the next three years, ICMM aims toprovide constructive answers to thesequestions as it delivers on its Strategyand Action Plan.

STRATEGY AND ACTION PLAN 20132015


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PRESIDENTSOFFICE

DIRECTOR

MANAGER

PROGRAMOFFICER

PROGRAM ENVIRONMENT ANDCLIMATE CHANGE

HEALTH ANDSAFETY

MATERIALSSTEWARDSHIP

ADMINISTRATIONAND OPERATIONS

SOCIAL ANDECONOMIC

DEVELOPMENTCOMMUNICATIONS

Rheanna HazeldinePROGRAM OFFICER

Kayley GafurPROGRAM OFFICER

R Anthony HodgePRESIDENT

Sarah SternMANAGER

ICMM ORGANIZATIONAL STRUCTURE

Gemma James Meera ThankeyEva Kirch

Kate Carmichael

Claire White

Mark HolmesSENIOR PROGRAM OFFICER

Anne-Marie Fleury

Ruth Thomas Benjamin Davies

Fernanda Diez

Casilda Malagon

Laura PocknellSENIOR PROGRAM OFFICER

Holly Bassett


Helen Atkinson

Aidan DavyDEPUTY PRESIDENT and

SENIOR PROGRAM DIRECTOR

John Drexhage

Ren Aguilar John Atherton Ben Peachey Duncan Robertson


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The contribution of mining andmetals to sustainable development across the full life cycle and fromthe perspective of all interests isnot widely or well understood. This

lack of understanding is impedingthe development of well-foundedpublic policy and contributing to theindustrys trust deficit.

Capturing minings contribution tosustainable development is not an easytask. It involves an assessment of costs,risks, benefits and responsibilitiesfrom the perspectives of companies,government, communities, civil societyorganizations and others. However,strong public policy, regulation and law

are unlikely without this foundation.There is an urgent need for developingand articulating an honest and fullpicture of minings contribution. Thistask has been set as the integratingthread of our 20132015 Strategy andAction Plan.

In 2012, we took a small first step inthis regard. At the UN Conference onSustainable Development (Rio+20)summit in June 2012, we launchedthe first three of a series of short

publications on minings contributionto sustainable development. Our aimwith the series is to spark a more openand broad-reaching discussion aboutthe contribution the industry makesto specific countries and to societyin general. We want all perspectivesto emerge and we want to offer afoundation of good information toinform that discussion.

The first publication, Miningscontribution to sustainable

development, provides an overviewof the series and introduces theconcept of contribution analysis. Therole of minerals and metals in a lowcarbon economydiscusses miningscontribution to meeting the climatechange challenge. It explores theway mining and metals companies

measure, manage and reducegreenhouse gas emissions. Humanrights, social development and themining and metals industrycoversthe respective roles of the state and

business with respect to human rightsand discusses the links between socialdevelopment, poverty alleviation andhuman rights, plus the role the miningand metals sector can play.

In October 2012, two more were addedto the series Trends in the mining andmetals industryand The role of miningin national economies.

The first of these provides an overviewof the industrys structure, explores

key trends affecting the industry andconsiders how these trends will impactmining in the future. The role of Chinais a key driver.

The role of mining in nationaleconomiesexamines miningseconomic contribution in the national

MININGS CONTRIBUTION TO SUSTAINABLE DEVELOPMENT


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Mining and metals are highly significantto the economies of over 50 of theworlds countries many of them low-and middle-income. For the millionsof people in these countries, mining iscritical for generating the economicmeans to achieve their social aspirations.

ICMMs social and economic

development work focuses on ensuringthat beneficial opportunities are realizedand the potential adverse impacts ofmining activities on society and theenvironment are effectively managed.The mining industry cannot do this aloneand for this to happen, engagement andcollaborative action is very important.

In 2012, ICMM published The miningsector in Brazil: building institutionsfor sustainable development in Englishand Portuguese, showcasing theresults and insights gained from theapplication of the Mining: Partnershipsfor Development Toolkit in Brazil. Thisreport is ICMMs sixth case study usingthe toolkit (following earlier case studieson Peru, Chile, Ghana, Tanzania andLao PDR), demonstrating that multi-stakeholder partnerships can enablemining to make a positive contributionto sustainable development.

One of the core principles that companymembers are required to implementis to uphold fundamental human

rights and respect cultures, customsand values in dealings with employeesand others who are affected by ouractivities. In 2012, ICMM launcheda comprehensive guide focused onintegrating human rights due diligenceinto corporate risk managementprocesses. The aim of the guide is todescribe some of these existing positivepractices through case studies and to

assist companies in checking whethertheir approach in this area is sufficient.

We strive to ensure the informationand products we provide are timelyand up to date. With this in mind, ICMMupdated its Community DevelopmentToolkit in July 2012. The original toolkitwas released in 2005, a product of a

joint project between the World BanksOil, Gas and Mining Policy Division,the Energy Sector ManagementAssistance Program (ESMAP) andICMM. It provides practical guidancefor all stages of the communitydevelopment process from explorationthrough construction, operations,decommissioning and closure. Therevised version draws upon work thathas emerged since the 2005 version waspublished. ICMM also translated theMining: Partnerships for DevelopmentToolkit into Spanish and seven of theMining: Partnerships for Developmentpublicationsinto simplified andtraditional Chinese throughout the year.

As we move into 2013, ICMMs focus isevolving from developing good practiceguidance to implementing good practiceon the ground. Five regional workshopswill be held to encourage peer learningand exchange on human rights duediligence and grievance mechanisms,as well as on Indigenous Peoples issuesand free, prior and informed consent

(FPIC) implementation challenges.A seventh application of the Mining:Partnerships for Development Toolkitwill be conducted, most likely inZambia. Finally, ICMM will conductan evaluation exercise of the toolkitin consultation with in-countrystakeholders. This will help direct ourwork going forward and improve toolkitapplication techniques in the future.

SOCIAL AND ECONOMIC DEVELOPMENT


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As part of the new Strategy and ActionPlan approved in 2012, governancechanges were introduced that includeda merging of the previously separateEnvironmental Stewardship andClimate Change work programs.The newly merged program area nowencompasses activities related towater, biodiversity and climate change.

EnvironmentA key milestone in 2012 was thelaunch of ICMMs Water managementin mining: a selection of case studiesat the 3rd International Congresson Water Management in the MiningIndustry held in Santiago, Chile. Thecase studies aim to promote dialoguewithin the industry and beyond aboutwater-related issues and concerns.In 2013, a major focus is to developan ICMM mining, metals and waterstrategy and related work plan for2014 and 2015.

Since its inception, ICMM hasmaintained a dialogue with theInternational Union for Conservationof Nature (IUCN). IUCN is the worldslargest global environmentalorganization. It brings together some11,000 voluntary scientists and expertsfrom 200+ member governmentorganizations and 900+ non-government organizations. Together,they oversee thousands of field projects

and policy initiatives around the world,many of which have implications for themining and metals industry.

Early in 2012, ICMM and IUCNpublished an independent reportexploring current World Heritagesites, processes, practices and theirrelationship to the extractives sector.Subsequently, ICMM, IUCN and the UNEducational, Scientific and CulturalOrganization (UNESCO) convened a

joint workshop to further review the

many related issues. This took placeat the IUCN World ConservationCongress held in Jeju, Korea.

The theme of mining, metals andbiodiversity has been set as a priorityfor 20132015 and ICMMs relationshipwith IUCN is a key element movingforward. In addition, ICMM will alsobe collaborating with the global oiland gas industry association forenvironmental and social issues(IPIECA) and a number of the EquatorPrinciples banks to explore a broadrange of biodiversity issues that arefacing the extractive industries.

Climate changeThroughout 2012, ICMMs ClimateChange work program continued to

focus on the priorities set by ICMMsCouncil when the program wasestablished in 2011. The programaims to ensure that the industry playsits role in contributing to sustainabledevelopment while remainingcompetitive in a low carbon economy.In support of this role, ICMM isfocusing its efforts on establishing

itself as a thought leader on keyclimate change topics. At the sametime, we aim to enhance membersawareness and understanding arounddifferent climate change perceptions.

Several important discussions in theclimate change policy arena wereheld with key developing countrygovernments and internationalorganizations during 2012. Inaddition, ICMM continued to developa strong, credible reputation with thewider business community throughparticipation at the 18th session ofthe Conference of the Parties (COP18)of the UN Framework Convention onClimate Change in Doha, Qatar, andthe UN Conference on SustainableDevelopment (Rio+20).

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In 2012, ICMM focused its thoughtleadership efforts in three areas ofresearch. The first looked into howdifferent carbon pricing schemesmay affect the competitiveness ofthe industry. The second researchedcurrent climate change revenuerecycling schemes. The final areaexplored climate change-related

adaptation strategies for the industry.At COP18, ICMM convened two sideevents demonstrating mining andmetals role in a low carbon economy.They featured presentations on ourresearch in the thought leadershipareas. The final reports on all threeare scheduled for release in 2013.

ICMMs prioritization process led to adecision to focus its climate changeefforts in 2013 on national policy-related work. To that end, the climatechange team will develop an approachto testing government policy againstthe ICMM climate change principles.

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Everyone across ICMM understandsthat accountability goes withresponsibility. We must deliveron our promises and uphold ourcommitments, and do so in a waythat allows others to assess ourperformance. The MMSD+10 report,

published by the InternationalInstitute for Environment andDevelopment (IIED) in 2012, did justthat it held ICMM to account. It setthe achievements of ICMM over thelast decade against the challengesand aspirations outlined in IIEDsreport Breaking New Ground(2002), which emerged from the

process that led to ICMMs creation.ICMM is deeply committed tobroad application of accountabilityto all who hold responsibility companies, governments,communities and civil society.


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Health and safety have a focus on thewell-being of people. People are notonly employees, but are also membersof families, communities and broadersociety. Therefore, considerations of

health and safety extend beyond theboundaries of the operation. Mining isinextricably part of the society in whichit operates through its people.

Across the world, mining-relatedinjuries have been dramaticallyreduced in many operations. Miningcompanies have enhanced their healthand safety systems, risk assessmentprocesses, improved training and put inplace physical controls to avoid injuriesand work-related illnesses.

Nevertheless, the number of fatalitiesremains high. This fact continues toundermine the trust of the industry inthe eyes of the public and policymakers.

Recognizing the challenges faced by theindustry, ICMM convened a conference inSantiago, Chile from 13 to 16 November2012. Over 300 executives and healthand safety experts, drawn from across

ICMMs member companies, gatheredtogether with five member CEOs toput the industry performance underthe microscope.

The discussions at the conferencereinforced:

l the people first message

l the need to shift some old health andsafety paradigms

l the role of leaders in making adifference at the ground level

l the importance of having anintegrated approach to well-being

l the need for more collaborationacross the industry.

All reinforced a sense that eliminationof fatalities is the industrys mainchallenge. As one of our CEOs said,Just one fatality is too many.

Reflecting the shift in health andsafety paradigms, ICMM launcheda report on leading indicators foroccupational health and safety in the

mining industry. Leading indicatorslook ahead they illuminate theroot causes of unwanted events andoutcomes and provide guidance onpreventing undesired outcomes. In

doing so, they help organizations toimplement effective and proactivecontrol measures before an incidentoccurs. The report provides examplesof company approaches to leadingindicators currently in use.

Fatigue is often observed as a majorcontributing factor in work-relatedaccidents and fatigue managementcontinues as a high priority. In additionto being discussed at the Santiagoconference, in 2012 ICMM co-organizedits second two-day workshop on fatiguemanagement in Perth, Australia. Theworkshop was held in collaborationwith IPIECA, the global oil and gasindustry association for environmentaland social issues, and the InternationalAssociation of Oil and Gas Producers.An emerging theme is that effectivemanagement regimes will be basedon a holistic lifestyle approach thatrequires a mix of people, systems and


HEALTH AND SAFETY


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technology with fatigue detection beingonly one part of the equation.

Building on the outcomes and energyfrom the conference, the work program

will be undergoing a strategic reviewin 2013 that will lead to a concreteset of tasks aimed at strengtheningmembers overall health and safetyperformance. In particular, it will focuson eliminating fatalities.

The industry has tended to focus onsystems, processes, proceduresand technology. However, health andsafety is more than this. First andforemost, it is about the well-beingof people: building relationships witheveryone at every level, building trustand enacting the belief that human lifeand well-being is more important thanproduction or economic value.

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ICMM and its members recognizethat respect for people and theenvironment is fundamental totrust. The commitment of our

members to not explore or minein World Heritage sites, areas thatsociety has set aside to conservebiological and cultural diversity,is an expression of such respect.This commitment was reviewedat a workshop that ICMM co-hosted with the InternationalUnion for Conservation of Nature

and UNESCO in September 2012.Actions speak louder than wordsand it is through demonstratingsuch respect both for the valuesof society and for the environment that ICMM will earn others respectand be in a position to strengthenthe contribution of mining andmetals to sustainable development.


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While the demand for minerals andmetals continues to grow acrossthe world, customers, investors,governments and civil societyorganizations are increasingly lookingfor assurance that the materialsthey buy or use have been producedin an environmentally and sociallyresponsible manner. This concern

extends from the extraction processalong the full chain of activities.

Increasingly, stakeholders aredemanding more transparency fromindustry and governments regardingthe source of materials. They alsowant to know who was involved inthe transformation or transport ofthe material prior to it arriving at theultimate end-user along with theassociated economic, social andenvironmental implications.

Given these expectations, ICMMconducted a review during the firsthalf of 2012 that set out the currentissues, drivers and implicationsfor ICMM members related to thischallenge. We focused on operationalperformance and developedpreliminary thinking on actions thatcompanies might take. In addition, awork plan for the 20132015 planningcycle was established that includedtwo main tasks: defining an approachfor describing sustainability profiles

for the products of the mining andmetals industry, and developing aframework for achieving and reportingon responsible sourcing. These taskswere subsequently supported byICMMs Council in its approval of thenew Strategy and Action Plan.

A large part of the management ofmining and metals production is themanagement of chemicals: theirsourcing, transport, storage, use,production, and the management of theiroccupational health and environmentalrisks through their life cycles. This isbecause minerals and metals, and theirproducts, are classified and regulated

as chemicals. Chemicals are also usedextensively in metals processing.

Reflecting the global rise in societalexpectations for the responsible useof chemicals, the mining and metalsindustry has worked hard to tighten itsapproach to chemicals management.

In 2012, ICMM launched Mineralsand Metals Management 2020: achemicals management progressreportat the third session of theInternational Conference on ChemicalsManagement in Nairobi, Kenya.The publication is the first report ofprogress in the implementation ofICMMs commitments made in 2009and sets out where the industry standsregarding chemicals management.

Delivery of ICMMs MaterialsStewardship work program is basedon collaborating with other industriesand governments in the design andimplementation of effective andinnovative solutions. The fifth Materials

Stewardship Roundtable took place in2012, bringing together ICMM membersand downstream users to discussthe attributes of various responsiblesourcing schemes, as well as thecommon elements in sustainableprocurement policies and programs.

MATERIALS STEWARDSHIP


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The role of ICMMs Communicationswork program is to enhance externalrecognition for ICMM, build internalawareness and alignment and supportcollaboration between staff, membersand others.

We promote our work throughconvening high-level panels at

global events. This year we heldthree successful panels. Eight CEOsdiscussed common sustainabilitychallenges the mining industry facesat the Investing in African MiningIndaba in Cape Town, South Africa,and at the Prospectors and DevelopersAssociation of Canada (PDAC)International Convention in Toronto.

ICMM also hosted an event at theChina Mining Congress & Expo 2012in Tianjin. Three Chinese businessleaders spoke about how theircompanies activities are contributingto sustainable development and howthe principles of responsible modernmining are being applied in China.

We continued to increase our effortsin digital communications throughICMMs website and social mediachannels with notable results. Therewas a 58 per cent rise in visits to ourwebsite compared to the same periodin 2011. Over 60 per cent of this trafficwas from new visitors, indicating our

success in building awareness withnew audiences.

ICMMs followers across all socialmedia channels increased significantly,our Twitter audience growing by 60 percent and our Linkedin group now withover 2,200 members. Both channels

COMMUNICATIONS

provide space for ICMM members,professionals in the wider industry andother interested stakeholders to easilyinteract with ICMM and each other.

In 2012, ICMM released 17 publicationsin six languages. Download ratescontinued to grow and ICMM USB sticks(carrying ICMMs full back catalogue)

have proved to be popular. The websitehad over 100,000 publication downloadsand some 3,000 USB sticks weredistributed at conferences and meetings.

In 2013, we will be launching therefreshed ICMM website with newdesign and increased interactivityoptions. We will be commencing a newproject with members that will focuson deepening our understanding ofreputation drivers for the industry.The goal of the project is to develop areputation measurement model foruse by mining and metals companies.Our hope is that we will develop anenhanced understanding of the linkbetween performance improvementand reputation.


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A Company member fees (96%)

B Association member fees (2%)

C Unspent 2011 (2%)

A breakdown of 2012 operational income and expenditure and 2013 forecast incomeand expenditure is shown below. The figures are broken down in the way illustratedto provide a transparent overview on the source of our income, and how we spendthat money to achieve the outcomes described throughout this review. Companyfees are split proportionately between the 22 member companies with 25% basedon sales revenue and 75% based on operating profit. Minimum and maximum feelevels are set to balance the range of fees applied and ensure that no one companycontributes more than 12% of total revenues.

FINANCIAL STATEMENT

2012 INCOME

2012 EXPENDITURE

2012 2013 forecast* m mIncome

Company member fees 6.44 6.49

Association member fees 0.09 0.08

Unspent income (prior year) 0.14 0.13

Interest receivable 0.03 0.02

Total revenue 6.70 6.72

Work program expenditure

Social and Economic Development 0.35 0.56

Environment and Climate Change 0.67 0.32

Health and Safety 0.14 0.15

Materials Stewardship 0.20 0.30

Communications 0.29 0.40

Presidents Office including Reporting and Assurance 0.66 0.83

Salaries and benefits(work program expenditure) 2.79 2.74

Sub-total 5.10 5.30

Secretariat expenditure

Operating costs and overheads 1.15 1.10

Salaries and benefits (administration and support) 0.32 0.32

Sub-total 1.47 1.42

Total expenditure 6.57 6.72

Balance 0.13 0.00

*2013 forecast includes 2012 carry forward and 2013 budget

Notesi) The 2012 figures are based on unaudited accounts audited figures are rev iewed by ICMMs Council in May

of each year and can be obtained from ICMM on request. The audited figures dif fer from those above in theirtreatment of capitalized program expenditure, unspent prior-year income and some long-term reserves.

ii) Association members pay a flat membership fee of 3,000.

iii) Expenditure on salaries and benefits has been distributed between work program and secretariatexpenditure proportionately in-line w ith the job responsibilities of each ICMM staff member.

A Social and Economic Development (5

B Environment and Climate Change (1C Health and Safety (2%)

D Materials Stewardship (3%)

E Communications (5%)

F Presidents Office (10%)

G Salaries and benefits(work program expenditure) (42%)

H Operating costs and overheads (18%

I Salaries and benefits(administration and support) (5%)

A

B C

A

B

CD

E

F

G

H

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CREDITS

PHOTOGRAPHY

DesignWestgatecomms.com and The Communication Solution Ltd

WritingLaura Pocknell and Steve Coomber

Printing CPG

Produced bythe Business Communication Forum (ww w.thebcf.com)

This review is printed on Edixion Challenger Offset manufactured by

UPM-Kymmene from ECF (elemental chlorine-free) pulp. The pulp is

sourced from sustainable producers based mainly in Finland.

Online copies of this review can be downloaded fromwww.icmm.com

Front cover: In consultation with local communities, Rio Tintos

Bunder project is monitoring surrounding wells to provide

comprehensive long-term baseline data that will allow us to assess

the impacts of our activities on water quality (Rio Tinto).

Page 5: Madibeng bulk water supply project, Black Rock operations,

Northern Cape, South Africa (Afr ican Rainbow Minerals).

Page 16: Sustainable development projects eMalahleni the Zibulo

Colliery opencast operations. The mine has a life of some 15 years to

provide both thermal and export coal and is mined by contractor

Benicon. A dragline at work (Anglo American).

Page 18: Children at Quehira School supported by the educational

resource program of our Las Bambas copper project in Peru (Xstrata).

Page 20: Vale s employees working at the seedling nursery locatedin Vale s Nature Reserve (Vale).

Page 22: Plant personnel safety meeting, Lubambe Copper Mine

(African Rainbow Minerals).

Page 24: Suspended sand and slime from leaching are separated by

hydrocyclones after washing in the rotoscoops to remove traces of

uranium-bearing solution (Rio Tinto).

Page 29: A member of the community liv ing close to Xstrata Nickels

Kabanga project in Tanzania (Xstrata).


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countabilitycare

Camilla Toulmin, Director, International Institutefor Environment and Development

Paulo de Sa, Manager, Oil, Gas andMining Policy Division, World Bank

Mining has the potential totransform the quality of lifein developing countries, by

building critical infrastructureand promoting inclusive and

sustainable development.In this regard, building trust

between government, industryand communities is crucial.

Brian Sullivan, Executive Director, IPIECA

At IPIECA we value our productive workingrelationship with ICMM. Through exchanging

ideas and best practice across the extractivessectors, our respective memberships are enabled

to continually improve their environmental andsocial performance. Working together increases

the trust among our common stakeholders.

Mark Cutifani, Chief ExecutiveOfficer, AngloGold Ashanti

Magnus Ericsson, President, Intierra RMG

Trust is knowing people will do the right thingeven when you are not monitoring them. The

last decade has seen some progress butthe mining sector now needs to be thinking

forward about the future path it must take apath which works within resource constraints,

especially energy and water, recognizes theimperative of addressing climate change, and

which offers partnership to local communities.

Knowing that the industry has finally understoodits problems and entered into a period of change

contributes to my sense of trust in the industry. Whenthe boom continues, security of supply of metals and

the wealth created by new mines will slowly change theindustry in the eyes of politicians and the public.

The mining industry mustcontinue to transform the way we

do business from that of a focusedextractive industry to that of acritical development industry.

At the same time, we must ensurepeople also understand our place

and relevance in society.


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respe

ntegrityMurilo Ferreira, President and

Chief Executive Officer, Vale

If a company distances itselffrom the community and the

environment, it is not fulfillingits purpose. What we want

to do is grow, achieving goodoutcomes and, more than that,

outcomes that do good.

Nick Holland, Chief Executive Officer, Gold Fields

In the mining industry there are long paybacksand significant risks and investors have to be

rewarded. But governments often want to seean immediate benefit and communities wantlocal development in the short term. This is

often not possible and these stakeholdersstart to distrust the mining company who has

a far more longer-term focus.

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