Non-Financial KPIs

We are committed to providing a safe workplace and believe that every work-related incident, illness and injury is preventable.

In 2009, nine people lost their lives at Xstrata’s operations (eight contractors and one employee) in Australia, Chile, Colombia and South Africa (2008: six people). We value the safety of contractors in exactly the same way as our employees. We monitor the performance of all contractors and insist on full compliance with our safety standards and procedures. All of our sites implement regular and appropriate behaviour-based training with emphasis on the identification and management of major hazards. Our managers work with their supervisors and operators in the field to identify appropriate topics to be covered in daily team talks and safety training.

We track total recordable injuries, which include lost-time injuries, medical treatment injuries and restricted work injuries, as this provides a more complete measure of safety performance. The total recordable injury frequency rate and lost-time injury frequency rates are reported per million hours worked and include contractors.

For the eighth consecutive year, a significant reduction was achieved in the frequency of total recordable and lost time injuries. Total recordable injuries fell by 14% and lost time injuries were 21% lower than in 2008 per million hours worked.

Occupational illnesses are a measure of the number of new cases reported by our workforce during the year. Xstrata’s operations aim to identify, assess and control occupational health hazards and, where practicable, to eliminate work-related diseases. Occupational illnesses can have a long latency, in particular noise-related hearing loss and musculoskeletal illnesses, and cases can relate to historical operating practices. In addition, other illnesses can be attributed to more recent exposure, such as respiratory diseases relating to occupational asthma or dust exposure. In each case, Xstrata aims to identify, assess and control occupational exposure to hazards with an overall aim of eliminating occupational illnesses.

36 new occupational illness cases were reported by employees and contractors in 2009, a 41% reduction on 2008. The majority of the occupational illnesses reported during the year relate to noise-induced hearing loss, partly related the ageing nature of our workforce and to proactive hearing conservation programmes.

Xstrata’s operations record environmental incidents according to severity, with category one representing very minor incidents with negligible impact and category four or five representing major or disastrous incidents with medium to longer-term impacts respectively. Category three incidents cause moderate, reversible environmental impact and require moderate remediation. Our target is to achieve zero category 3, 4 or 5 incidents. No category four or five incidents have ever occurred at Xstrata’s operations.

In 2009, the number of category 3 incidents reduced to three (2008: eight incidents). One incident involved the contamination of water at Townsville Port in Australia during the loading of zinc concentrate. Immediately following the spill, sampling was undertaken by an environmental consultant. The results were reviewed by a toxicologist who concluded that there was minimal risk to the marine environment. To reconfirm this initial finding, a second round of sampling was undertaken and results are due in March 2010.

The two other incidents involved ground contamination as a result of fuel spills, one occurred in South Africa and the other in the Dominican Republic. In both cases the spills were contained and clean-up processes rapidly initiated.

Greenhouse gas emissions are measured as CO₂ equivalent tonnes (tCO₂-e). Xstrata’s main sources of GHGs are from electricity used, and from methane released during our coal mining in some regions and from post mining fugitive methane emissions from our closed coal operations. We seek to reduce greenhouse gas emissions through improved energy efficiency and by using coal-seam methane to generate power wherever possible.

In 2009, Xstrata’s direct (Scope 1) and indirect (Scope 2) greenhouse gas emissions from its operations reduced by 10% and 7% respectively, mainly as a result of reduced energy use due to lower production volumes at Xstrata Nickel and Xstrata Alloys, our two most energy-intensive businesses. Xstrata Coal’s Australian operations continue to invest in using methane from its operations for energy generation where possible. Generating capacity from our methane-fired power stations increased to 31MW, up from 24MW in 2008. The electricity generated is either used for power by the mine or sold to the local grid.

2008 data has been restated from 24.9mt CO₂-e to 24.4mt CO₂-e and reflects improvements made to data collection and aggregation processes and the use of more accurate emissions factors.

In addition to absolute tonnes of CO₂-e generated directly at its operations and through electricity usage, Xstrata also measures the ‘carbon intensity’ of its operations. This measure normalises carbon emissions (in million tonnes) against production (in million tonnes) and provides a basis for comparison year-on-year, notwithstanding changes to production levels across the Group. In 2009, the carbon intensity of the Group’s operations decreased by approximately 2% compared to the prior year.

Energy is measured in petajoules and includes both electricity usage and energy from the combustion of fuel. Efficiency and energy consumption reductions drive both cost savings and emissions reductions. We aim to progressively improve energy efficiency across our business. All commodity businesses have energy efficiency plans in place and we carry out regular energy audits at operations. We measure efficiency as energy intensity – the amount of energy required to produce one tonne of product.

A number of our operations are intensive users of energy. Over half of the energy we use comes from electricity and is predominantly used to run our metallurgical operations. Diesel is the primary source of energy at our mines and is used to run the mining fleet and mobile equipment.

During the year, our energy use and energy intensity was 29% and 12% lower respectively than in 2008, due to curtailments of our smelting capacity in response to weak markets and the prioritisation by Xstrata Alloys of energy-efficient furnaces for its ferrochrome production.

Effective water management and conservation is critical to Xstrata’s operations, a number of which are located in arid regions. The extraction and processing of minerals and metals uses large volumes of water and we are committed to continually improve the efficiency with which we use water. Xstrata measures total water used and water recycled. Our operations seek to progressively increase the use of process and recycled wastewater, to reduce our impact on local water supplies. Recycled water is typically used in place of fresh water for processes such as dust suppression.

In 2009, we used 205,800 ML of water, 7% lower than in 2008 as a result of lower production levels. The use of recycled or reused water by our sites was 39% lower, or 313,800 ML, due to reduced or suspended operational activities at a number of sites that, when operating at full capacity, have in place effective water management programmes.

Water intensity measures the volume of water used, denominated by production volumes, to provide a basis for year-on-year comparison of our progress towards our aim of using less water per tonne of product. In 2009, the water intensity of our operations decreased by 1%, reflecting the success of our water management programmes.

Employee turnover is a measure of our success in retaining our people. Our long-term interests rely on our ability to attract and retain the best people, at every level, with appropriate skills. Turnover and diversity data is calculated as a percentage of total permanent employees (excluding contractors) and is shown for all available reporting periods.

Voluntary turnover, which excludes compulsory redundancies or performance-related terminations was 6.4%, down from 7.2% in 2008. Total employee turnover, including voluntary resignations, redundancies and performance-related terminations rose to 14.4% (2008: 12.4%) reflecting 1,481 redundancies during the year, primarily from the restructuring of the nickel business.

We aim to provide employees with the resources they require to progress in their careers and excel. We provide career development opportunities, access to training and skills development.

Ongoing training and education is conducted both in the workplace and at external institutions. Both training hours and training spend are shown as an average per employee including contractors and is shown for all available periods.

In 2009, the numbers of hours training that each employee participated in increased marginally compared to 2008. The average amount spent on training per employee was lower than the previous year, mainly as a result of increased in-house training programmes as opposed to using the services of external training service providers.

Xstrata sets aside a minimum of 1% of annual Group profit before tax to fund initiatives that benefit local communities. We support programmes for community development, enterprise and job creation, health, education and the environment, as well as culture and arts. For 2008 and 2009, we have also calculated the total value of in-kind contributions such as equipment and management time.

In 2009, we set aside $59 million or 1.5% of Group profit before tax and contributed a total of $64.7 million, including $5.4 million of in-kind contributions, to support initiatives that benefit the communities in which we operate.

The charts show the amount spent on initiatives in each geographic region in which Xstrata operates and by category.