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13: Life Cycle Management - Projects and Operations

Intent

Sustainable development (SD) risks are identified, analysed, evaluated and treated in a timely and integrated manner during acquisitions, divestitures and throughout all phases of the project life cycle, i.e. exploration, pre-feasibility, conceptual design, detailed design, procurement, construction, commissioning, operation, decommissioning, closure, rehabilitation, post-closure care and maintenance and disposal. On the basis of scientifically sound and adequate information, the closure of sites and operations is properly planned for, costed and implemented in accordance with accepted leading practice, applicable laws and regulations and in an environmentally and socially sustainable manner.

Requirements and Expectations

13.1

SD risks of new developments are identified, analysed, evaluated and treated by processes that include:

• An appropriate level of baseline SD assessments prior to commencing exploration or construction activities
• Pre-feasibility studies that identify any fundamental SD impediments, the completion of sufficiently detailed and robust social, health and environmental impact assessments and land-use assessments to determine the associated risks to be treated should the project proceed
• The development and implementation of appropriate SD risk management strategies that meet Xstrata, commodity business, statutory and stakeholder requirements
• A mechanism to ensure the transfer of knowledge concerning SD risks and their management, between each phase of the project life cycle
• A phase by phase process designed and implemented to ensure that as new SD and operational information and knowledge is acquired, it is used to review and test the assumptions made at earlier phases of the project life cycle
• A mechanism to ensure, when appropriate, the transfer of knowledge concerning SD risks and their management, to other projects being implemented by Xstrata
• The identification assessment and management of property rights that considers: land tenure, cultural heritage, authority to access and the level of community support.

13.2

A documented project management system, relevant to SD issues, is used to deliver all projects and developments through:

• Formal evaluation(s) of the conceptual design against defined SD criteria, prior to management approval
• Formal evaluation(s) of the detailed design against defined SD criteria, prior to procurement or construction
• Identification of all reasonably foreseeable SD risks, constraints and opportunities relating to the project and the effective management of these
• Compliance with Xstrata's Business Principles, Policies and Sustainable Development Standards and all relevant SD legislation, standards, codes and requirements
• Applying experience from previous projects and current operations in the appropriate context to project development
• Site and project management systems to manage construction SD risks
• Design and construction that complies with sound engineering and technical standards
• Periodic project audits that monitor project SD milestones and outcomes
• Design, construction and operation that considers closure planning SD requirements
• A commissioning plan that addresses operability requirements and employee competency.

13.3

SD risks from new plant, equipment and infrastructure is effectively managed through procedures that:

• Identify, analyse, evaluate and treat SD risks from the plant, equipment and infrastructure including SD decommissioning and disposal requirements
• Assess, prior to use, all newly installed plant and equipment against compliance with relevant design codes, standards and legislation.

13.4

Closure plans are developed maintained and implemented as designed for all operations and are:

• Compliant with Xstrata's Business Principles, Policies, Sustainable Development Standards, all applicable regulatory obligations and international standards regarding mine closure, including financial provisioning requirements
• Based on a robust process developed at the commodity business level for identifying and assessing all significant SD risks and controls. This includes commercial opportunities to share risks with other parties and the associated costs related to the foreseen decommissioning, closure, rehabilitation and post-closure obligations and activities
• Annually reviewed, including a review of assumptions and cost estimates, to address any changes in circumstances such as changes in legal requirements, new technologies, the local environmental and community situation etc.
• Developed and reviewed by appropriately experienced and competent persons including external experts, as necessary.