biodiversity

Loss of biodiversity due to competing land use is a significant risk for native ecosystems around the world. To obtain and retain a licence to operate, mining and metal production companies must exceed community and legislative expectations for environmental stewardship.

Xstrata's Biodiversity and Land Management Standard promotes the development and implementation of scientifically sound technologies and procedures across all its operations to effectively manage and conserve biodiversity, for example through the establishment of offset areas, and rehabilitate disturbed land to a planned post-closure use. All sites will be assessed against this standard in 2005.

Baseline studies are required at the feasibility or exploration phase of all Xstrata projects to establish existing conditions of biodiversity and land use, identify environmental risks, assess potential impacts and identify relevant standards. Environmental risk assessments addressing impacts on biodiversity and land use must be completed for all new operations or major changes to existing operations. Biodiversity considerations are also addressed when determining post-closure land use and the rehabilitation or restoration of ecosystems.

Biodiversity was a key topic of conversation at the workshops held by the General Manager Health, Safety and Environment as part of the HSEC Policy and Standards launch in 2004. The discussions focused on the meaning of biodiversity, high-and low-biodiversity impact areas, what is expected across the Commodity Businesses and an understanding of the work required integrating biodiversity requirements into each operation's plans, training, education programmes, monitoring and setting key performance indicators (KPIs). The KPIs in place across the Group are: land under management, land disturbed, land rehabilitated and baseline studies completed.

For Xstrata, the Australian state of New South Wales is an area of high biodiversity impact. The state is home to 12 of our coal mines, which are located in an area of rich diversity of plant and animal life and competing land use, including remnant forests, population growth, agriculture, viticulture, horse breeding, mining and other industries. As part of its focus on biodiversity initiatives, the Xstrata Coal HSEC Committee approved a biodiversity strategy in 2004 covering the entire commodity business.

In New South Wales, the majority of sites have management plans, detailing flora and fauna management and land management with biodiversity components, with the remaining sites working to achieve this in 2005. Development of biodiversity and land management plans is continuing at our Queensland operations and baseline surveys are expected to be completed for all sites by the end of 2005. The land management and biodiversity conservation initiatives at all our New South Wales mines were independently assessed in 2004.

Baseline studies have been carried out at all South African operations to prepare for detailed biodiversity plans. The baseline studies were completed as part of each site's

Naphtal Sithebe, health and safety representative, Elmien Rainbird-Webb, Divisional Environmental Co-ordinator and Cobus Carpenter, Safety Officer at Ogies Dump, South Africa

Environment Management Programme Report (EMPR), and plans will be further developed during 2005 to align with the Xstrata management standard for biodiversity and land management.

To ensure we incorporate community and legislative expectations into our biodiversity management plans, we have used a range of external specialists to help us develop these plans. In South Africa, we used environmental consultants and had our plans approved by government authorities. In New South Wales, the Mount Owen Flora and Fauna Advisory Committee, which comprises representatives from the Department of Environment and Conservation, Forests New South Wales, the Department of Primary Industries - Mineral Resources and the Hunter Environmental Lobby, were responsible for the development and implementation of a plan of management for biodiversity and native forest restoration. To date, seven honours degree projects and two PhD projects related to rehabilitation and native forest restoration research have been undertaken at Mount Owen. Xstrata Coal is currently partnering with the University of Newcastle to support further projects of this nature. The research, which aims to improve rehabilitation and reforestation outcomes (such as assessing alternative growing substrates to overcome a shortage of forest topsoil), is being conducted in Ravensworth State Forest, 'New Forest' and Mount Owen mine rehabilitation.

In Queensland, biodiversity-rich habitats where the Group owns or leases land include endangered brigalow communities near Oaky Creek, Newlands and Collinsville, and a national park adjoining the Rolleston coal mine. A management plan to protect an endangered ecological community of bluegrass at Rolleston was approved by Environment Australia in 2003 and will require the re-establishment of at least 130 hectares of bluegrass.

In line with the Group standard, Xstrata Copper is developing a biodiversity guideline to assist operations integrate biodiversity considerations into their business plans. Biodiversity issues are also considered during the appraisal of new projects or potential acquisitions, including critical habitats for rare, endangered, vulnerable, or migratory species, and the biodiversity status of areas with a high conservation value.

At Xstrata Copper, the original Panel Assessment Study (PAS) into the impacts of Mount Isa's smelter emissions in north Queensland identified ecosystem impacts up to 15 kilometres west of the smelting operations. These studies found that species richness increased to the west of the smelters, whereas little change in species abundance was observed at various distances from the smelters.

In 2005, Mount Isa will conduct a number of biodiversity-related activities to assist in the development of a biodiversity management plan, including:

• a follow-up flora and fauna survey (as part of ongoing Panel Assessment Study work) to detect any changes in the ecology since the 1999 baseline survey, such as discernible recovery resulting from the significant reduction in sulphur dioxide emissions;
• a baseline macroinvertebrate study for the Leichhardt River; and
• renewed emphasis on the weed management programme for the mining lease.

Xstrata Zinc's Nordenham refinery has leased an undisturbed area to offset the potential impacts of its jarosite pond on local wildlife, particularly birds, and has engaged biologists to monitor the area. Their report indicates an increase in bird population and the success of the project.

Baseline flora and fauna studies were initiated in and around the Las Bambas project in Peru, including an assessment of physical, biological and sociological conditions in the project area. The predominant vegetal formation in the study area is gramineous pajonal, which is typically used for grazing livestock. Seventy nine plant, 32 bird, two fish, 12 mammals, one reptile, six insects, one spider and one frog species were observed, as well as nine domesticated agricultural plants and 13 domesticated animals. The Environmental Evaluation of the Las Bambas exploration project was submitted to the Peruvian authorities in December 2004. This document summarises the findings of the preliminary baseline environmental studies and the nature of the controls to be employed to minimise environmental impacts of the proposed exploration activities. The Law of Protected Natural Areas governs the protection of areas for the conservation of biological diversity and other values of cultural, landscape or scientific interest, as well as their contribution to the existing development of Peru. The area of influence of the Las Bambas exploration project does not include any areas identified for conservation by the national system of protected areas. Further detailed studies of species biodiversity and the physical environmental baseline conditions will continue through 2005.

Activities planned by Xstrata Copper for 2005 include:

• Xstrata Copper will initiate an annual fauna monitoring programme to help identify potential rehabilitation success indicators and contribute to the knowledge of fauna in the north-west Queensland region; and
• Minera Alumbrera has contracted the University of Tucum…n Botany Institute to complete background studies of flora at the mine site and identify and complete germination trials for potential revegetation species for rehabilitating the waste rock dump and tailings dam.