Xstrata plc Sustainability Report 2006

Sustainability Report 2006

We will grow and manage a diversified portfolio of metals and mining businesses 

with the single aim of delivering industry-leading returns for our shareholders. 

We can achieve this only through genuine partnerships with employees, customers, 

shareholders, local communities and other stakeholders, which are based on 

integrity, co-operation, transparency and mutual value-creation.

02 Xstrata at a Glance 

04 Chief Executive’s Report 

06 2006 Scorecard 

08 2007 Targets 

10 HSEC Assurance Programme 

11 Scope of Report 

51 Social responsibility 

52 Economic contribution 

54 Community 

14 Strategy and sustainable 

development 

15 Key sustainability challenges 

17 Key sustainability 

opportunities 

62 Environment 

66 Climate change 

73 Water management 

76 Air emissions 

78 Biodiversity conservation 

81 Rehabilitation and closure 

83 Waste and tailings 

management 

85 Product stewardship 

18 Governance and ethics 

19 Corporate governance 

21 Risk management 

23 Ethics and business principles 

25 Advocacy and our global role 

88 Key sustainability data 

90 GRI index 

91 Independent assurance statement 

92 Glossary 

29 Workplace and our people 

30 Safety 

38 Occupational health 

43 HIV and AIDS 

46 Employees 

Xstrata plc Sustainability Report 2006 | 01

Xstrata at a Glance 

Xstrata is a major global diversified mining group, listed on the London and Swiss stock exchanges and headquartered 

in Zug, Switzerland. Xstrata maintains a meaningful position in seven major international commodity markets: copper, 

coking coal, thermal coal, ferrochrome, nickel, vanadium and zinc, with recycling facilities, additional exposures to 

gold, lead, cobalt and silver and a suite of global minerals and metals processing technologies. Xstrata’s operations and 

projects span 18 countries and employ over 43,000 people, including contractors. 

Xstrata’s activities are organised into five global commodity businesses and a technology business, each of which 

operates with a high level of autonomy. 

XA 

alloys 

Xstrata Alloys is the world’s largest 

producer of ferrochrome and a leading 

producer of primary vanadium. Xstrata 

Alloys also owns carbon and anthracite 

operations which supply key raw 

materials to its ferrochrome smelters and 

an interest in a joint venture platinum 

group metals mine and concentrator. 

u XNi 

nickel 

Xstrata Nickel, headquartered in Toronto, 

Canada, is the fourth largest global nickel 

producer and one of the world’s largest 

producers of cobalt. Xstrata Nickel’s 

operations include five mines and 

processing facilities in Canada, a ferronickel 

mine and processing facility in the 

Dominican Republic and a refinery in 

Norway. Xstrata Nickel’s promising portfolio 

of growth projects includes Nickel Rim 

South in Canada, Kabanga in Tanzania, 

and Koniambo in New Caledonia. 

02 | Xstrata plc Sustainability Report 2006 

XCu 

XC 

coal 

Xstrata Coal is the world’s largest exporter 

of thermal coal and a significant producer 

of premium quality hard coking coal and 

semi-soft coal. Headquartered in Sydney, 

Australia, Xstrata Coal has interests in 

over 30 operating coal mines in Australia, 

South Africa and Colombia and an 

exploration project in Nova Scotia, Canada. 

XZn 

zinc 

XCu 

Xstrata Zinc is one of the world’s largest 

miners and producers of zinc. Xstrata Zinc’s 

operations span Spain, Germany, Australia, 

the UK and Canada, with an interest in the 

Antamina copper-zinc mine in Peru. Xstrata 

Zinc’s growth projects include interests in 

the Lady Loretta deposit in Queensland, 

Australia, and the Perseverance zinc deposit 

in Quebec, Canada. 

XCu 

copper 

Xstrata Copper is the fourth largest global 

copper producer, with mining and 

processing facilities located in Australia, 

Chile, Peru, Argentina and Canada. It also 

manages a recycling business (Noranda 

Recycling) with plants in the USA and 

Asia. Xstrata Copper’s world-leading 

portfolio of growth projects includes 

Las Bambas in Peru, Tampakan in the 

Philippines, El Morro in Chile, El Pachón 

in Argentina XCuand 

Frieda River in Papua 

New Guinea. 

XTech 

technology 

Xstrata Technology develops, markets 

and supports technologies for the global 

mining, mineral processing and metals 

extraction industries. These include the 

ISA PROCESS, ISASMELT, IsaMill, 

Jameson Cell and Albion Process 

technologies, which are successfully 

marketed globally to major mining 

companies and used at a number of 

Xstrata’s own operations to improve 

efficiency and reduce operating costs. 

XCu

CANADA 

UNITED STATES 

PERU 

Lima 

Arica 

Antofagasta 

New 

York 

Belén 

ARGENTINA 

=Operations =Projects 

Alloys 

Sudbury 

Toronto 

BRAZIL 

Québec 

Brasília 

CANADA 

Montreal 

Rio de Janeiro 

CUBA 

JAMAICA 

Puerto Bolivar 

COLOMBIA 

DOMINICAN 

REPUBLIC 

UNITED 

KINGDOM 

London 

SPAIN 

Witbank 

Johannesburg 

FRANCE 

SOUTH AFRICA 

Mount Isa 

NORWAY 

Bremerhaven 

Berlin 

GERMANY 

SWAZILAND 

Coal Copper Nickel Zinc Recycling City/Town 

Townsville 

Brisbane 

PHILIPPINES 

Darwin 

AUSTRALIA 

PAPUA NEW 

GUINEA 

NEW 

CALEDONIA 

Mudgee 

SOUTH AFRICA 

Johannesburg 

Coffs Harbour 

Muswellbrook 

Sydney 

UGANDA 

Nairobi 

Dodoma 

TANZANIA 

SWAZILAND 

Newcastle 


Chief Executive’s Report 

2006 marked a year of significant change for Xstrata. Three major acquisitions were completed, with a 

combined value of $19.6 billion, transforming Xstrata’s scale, commodity exposure and geographic spread 

of assets. Our operations achieved record financial results in a very strong commodity price environment 

and our financial support for community initiatives rose to over $49 million. 

Xstrata has grown rapidly over the past 

five years to become a $50 billion 

company operating in 18 countries. This 

increased scale and geographic footprint 

bring additional sustainability challenges 

and responsibilities, which we have 

identified through the integration of the 

acquisitions completed in 2006 and are 

working to address. 

The future of the mining industry 

depends on its ability to operate in an 

environmentally and socially responsible 

manner, creating value and sustainable 

benefits for our shareholders, workforce 

and the communities in which we 

operate. This approach, applied 

worldwide, is essential to ensuring 

that we maintain and strengthen 

Xstrata’s reputation as a responsible 

and desirable business partner, employer 

and corporate citizen. 

At Xstrata, sustainability is fully 

integrated into our business strategy, 

risk management and planning processes. 

We operate with a lean and efficient 

devolved management structure, setting 

clear and demanding sustainability 

commitments and standards at the 

Group corporate level. We ensure these 

commitments and standards are respected 

by our global commodity businesses and 

at the operational level through a rigorous 

third party health, safety, environment and 

community (HSEC) assurance process. 

The effective integration of acquired 

operations into our governance, risk 

management and sustainable development 

frameworks is crucial to our success and, 

after completing a number of acquisitions, 

is now one of our distinctive capabilities. 

By the end of 2006, some 100 days after 

assuming management control of 

Falconbridge, we had completed the 


integration of businesses acquired 

during the year, including rapid HSEC 

assessments of each operation. 

The principal challenges identified at the 

acquired operations are: to embed risk 

management processes at the former 

Falconbridge operations, which primarily 

focused on legal compliance; address 

areas of underinvestment in operational 

integrity and site resources; implement 

systematic planning for community 

involvement; and improve financial and 

non-financial internal reporting. Every 

acquired operation will be independently 

audited through Xstrata’s HSEC Assurance 

Programme by the end of 2008, to 

provide the Board and executive 

management with assurance that 

our policies and standards are being 

met or exceeded. 

Looking forward, the Group’s greatest 

challenges are greenhouse gas emissions 

and issues associated with climate change, 

employee and contractor safety and 

employee and community health issues in 

certain regions, for example, HIV and AIDS 

in Southern Africa, Tanzania and the 

Dominican Republic. Environmental 

performance, in particular the efficient 

use of resources such as water, minimising 

impacts such as emissions and conserving 

biodiversity, together with ongoing 

community support are also essential 

for our future success. 

In common with our mining sector peers, 

we are increasingly entering more 

challenging geographies with complex 

operational, social and political issues. 

It is vital in these regions that we apply 

our sustainable development framework 

of policies and standards equitably 

regardless of location, while respecting 

local customs and addressing specific 

regional risks and opportunities, 

to protect our reputation and secure 

access to resources. 

Climate change continues to be a 

significant topic for many different 

segments of society, including Xstrata, 

as the world’s largest producer of export 

thermal coal and a significant consumer 

of energy. 

While coal will continue to play an 

essential role in meeting the world’s 

increasing energy demands and in 

fuelling social development and 

economic growth, we recognise that 

more needs to be done to accelerate 

the development and implementation 

of low emission technologies to reduce 

or virtually eliminate emissions from 

coal-fired power generation. These 

‘clean coal’ technologies hold the 

promise of a technological solution 

to the global dilemma of how to satisfy 

growing global energy requirements, 

while reducing carbon emissions from 

burning fossil fuels. The exploitation of 

coal as a plentiful, inexpensive source of 

energy is especially critical in developing 

countries, where future prosperity 

depends on affordable energy. 

As the largest export thermal coal 

producer, we are taking a leadership 

role in financially supporting initiatives 

in partnership with government, other 

industries, the scientific community, 

environmental groups and other 

stakeholders to develop these 

technological solutions and test their 

commercial viability. 

Technology is also playing a vital role 

in improving the energy efficiency of 

mining and metals operations. Xstrata 

Technology’s products are leaders in their

fields in this regard, and are used at our 

own operations as well as marketed 

worldwide. Another example is Xstrata 

Alloys’ proprietary Premus technology, 

which reduces the energy intensity of 

ferrochrome production by 20%, and 

is in place at two of our operations. 

In 2006, we achieved or exceeded a 

number of the targets set in the previous 

year and HSEC Assurance programme 

scores improved across the 21 sites audited. 

Areas of good performance include the 

implementation of biodiversity conservation 

plans across all but three former Xstrata 

sites, a fifth consecutive year of reductions 

in the frequency of injuries sustained, 

achieving 95% workforce participation in 

Xstrata Coal South Africa’s voluntary HIV 

testing programme, providing anti-retroviral 

and other treatment to over 400 community 

members, implementing corporate social 

involvement plans to cover every managed 

operation and exceeding our target of 

setting aside a minimum of 1% of profit 

before tax to fund community projects. 

However, in a number of areas, we did not 

attain our goals. Tragically, one employee 

lost his life in a workplace incident in 2006. 

A further four people were fatally injured at 

managed operations in the early part of 

2007. These incidents are totally 

unacceptable and underline the sustained, 

intensive effort required to improve major 

hazard management and behavioural safety 

issues. Tragic events such as these remind 

us that we cannot pause in our relentless 

pursuit of the elimination of injuries, 

illnesses and fatalities from our business. 

Our businesses reported 24 category 

3 (significant) environmental incidents, 

principally due to water discharges at 

Mount Isa during tropical storms, and 

58 new cases of occupational illnesses. I am 

confident that the programmes under way 

will continue to bring about improvements 

in each of these areas in 2007. 

This year we have revised our approach 

to setting targets, focusing on the material 

issues facing each of our commodity 

businesses. These include specific 

greenhouse gas, water, emissions, health, 

safety and community targets at the 

commodity business level and include 

longer-term targets as well as annual 

milestones. We still have further work to do 

in this area to align our targets more closely 

with material issues, but I am pleased that 

challenging targets have been set for 2007 

in a number of important areas. 

We will also develop intensity measures in 

2007, which relate greenhouse gases, 

other air and water emissions, energy use, 

raw water use, recycled water and waste 

to production and provide an indication of 

our efficiency in using natural resources 

and producing outputs. Calculating 

accurate intensity measures is particularly 

complex for the several operations within 

our portfolio which produce more than 

one commodity and encompass several 

different industrial processes. 

It is an encouragement to us all that the 

improvements we have made in recent 

years have gained public recognition. In 

2006, Xstrata was selected as a member of 

the Dow Jones Sustainability Indexes, our 

2005 Sustainability Report was short listed 

for the ACCA Sustainability Awards and 

our innovative HIV and AIDS workplace 

voluntary counselling and testing 

programmes in South Africa were 

recognised with a Global Business 

Coalition Excellence Award. As we grow in 

size, it is also important that we engage 

actively in initiatives to drive best practice 

in sustainable development in our industry, 

and in 2006, we joined the UN Global 

Compact and the International Council on 

Mining and Metals (ICMM). 

This report has been prepared in accordance 

with the Global Reporting Initiative (GRI) G3 

guidelines, launched in late 2006, and 

provides a balanced and reasonable 

presentation of our economic, 

environmental and social performance in 

2006. As ever, I welcome feedback on any 

aspect of Xstrata’s performance and 

reporting, which can be provided via 

our website or through the contact 

details listed on the inside back cover 

of this report. 

I am confident that Xstrata’s employees 

and management will rise to the 

challenges and seize the opportunities 

presented by the transformational events 

of the past year, achieving real progress 

against our targets and driving continuous 

improvements across our business. 

ML Davis 


2006 Scorecard 

Safety 2006 target Performance 

Xstrata Group Zero fatalities One fatality 

Met or exceeded target Substantially met target Did not meet target 


LTIFR 20% reduction on 2005 (

Environment 2006 target Performance 

Xstrata Group No fines or penalties Four fines paid (US$8,100) 

Zero category 3, 4 or 5 incidents 24 category 3 incidents, no category 4 or 5 incidents 

Extend biodiversity conservation plans to cover every Achieved by every operation except three Xstrata Alloys 

managed site site plans, scheduled for implementation in 2007 

Every Australian operation to implement Greenhouse Agreements in place, formal reporting will commence 

Challenge Plus agreements with Australian Government from 2007 

Xstrata Alloys No fines or penalties Two fines paid (US$6,400) 

Zero category 3, 4 or 5 incidents One category 3 incident, no category 4 or 5 incidents 

Xstrata Coal No fines or penalties One fine paid (US$1,200) 

Zero category 3, 4 or 5 incidents No category 3, 4 or 5 incidents 

Xstrata Copper No fines or penalties One fine paid (US$500) 

Zero category 3, 4 or 5 incidents 17 category 3 incidents, no category 4 or 5 incidents 

95% capture of SO2 emissions from Mount Isa smelter Capture and treatment rates of SO2 were increased from 

80% to over 85% 

Xstrata Zinc No fines or penalties No fines or penalties 

Zero category 3, 4 or 5 incidents Six category 3 incidents, no category 4 or 5 incidents 

Achieve an annual boundary lead-in-air average Target achieved at all but one of eight monitoring 

of

2007 Targets 

Assurance and Strategy 

Xstrata Group Acquired operations1 to be aligned with the 17 HSEC Management Standards by end 2007 

All acquired operations to implement findings of 2006 integration site audits by end 2007 

HSEC Assurance audits carried out at all acquired operations by end 2008 

Xstrata Alloys All operations to achieve HSEC Assurance standard of ‘good’ (80%) by end 2008 

Xstrata Coal All operations to achieve HSEC Assurance standard of ‘optimum’ (90%) by 2009 

Xstrata Copper All operations to achieve HSEC Assurance standard of ‘good’ (80%) by end 2008 

Xstrata Nickel Develop HSEC Strategic Objectives 

Achieve minimum ’satisfactory’ level (65%) in HSEC Assurance audits at every site by end 2008 

Achieve minimum ’good’ level (80%) by end 2009 

Xstrata Zinc 

Safety 

All operations to achieve HSEC Assurance standard of ‘good’ (80%) by end 2008 

Fatality prevention Xstrata Group No fatalities 

Major hazard Overall 15% reduction in TRIFR (

Water Management 

Water conservation Xstrata Group Implement water conservation plans for all operations in water scarce regions 

Water quality 

Xstrata Alloys Achieve 5% reduction of total water use per tonne of material produced 

Operational water recycling/reuse targets implemented at each operation 

Xstrata Coal 10% reduction in fresh water consumption per ROM tonne by 2011 

Xstrata Copper Tintaya (Peru) to reduce fresh water consumption by 20% (Salado River) 

Ernest Henry (Australia) to reduce fresh water consumption per tonne of ore treated by 5%; 

improve reuse of dewatering water by 35% 

Mt Isa operations to reduce stormwater discharges by 50% in 2007 (incl. Xstrata Zinc) 

Xstrata Nickel 60% of operations to develop fresh water use reduction targets in 2007 

All concentrators to use recycled water for >95% of process water supply 

Environment General 

Xstrata Zinc San Juan smelter (Spain) to reduce water consumption by >4% and water discharge by 9% 

Incident reduction Xstrata Group No category 3, 4 or 5 incidents 

Waste management Establish intensity measures for GHGs, energy use, water, air emissions, hazardous waste 

Air quality and emissions No fines or penalties 

Soil quality Xstrata Copper Waste management plans implemented at all acquired operations 

Mt Isa Mines Copper Smelter to progress towards 95% capture of SO2 

Horne Smelter to commit C$20 million over three years to reduce arsenic air concentrations 

Altonorte smelter to achieve 93% capture of SO2 

Murdochville (Canada): remediate 125 residential lots in 2007 through 5 year soil 

remediation programme 

Xstrata Nickel Achieve waste reduction targets at 80% of operations in 2007 

Sudbury Smelter (Canada) to achieve:

HSEC Assurance Programme 

HSEC assurance programme results 

(%) 

100% 

90% 

80% 

70% 

60% 

50% 

40% 

30% 

20% 

10% 

0% 

1. Leadership, 

Accountability & Ethics 

2. Planning, Resources, 

Objectives & Targets 

3. Competency & Behaviour 

4. Communication & Engagement 

5. Risk & Change Management 

6. Catastrophic Hazards 

Xstrata’s HSEC Assurance Programme 

independently audits every managed 

operation every one to three years against 

Xstrata’s sustainable development 

framework, including our Business 

Principles, HSEC policy and 17 

Management Standards. The frequency 

of audits is determined by previous audit 

performance and risk profile. Audits in any 

given year also focus on operations or 

projects undergoing significant changes 

(for example moving from a project to an 

operation, or implementing a closure plan). 

The audit team is led by an independent 

auditor and also includes a senior Xstrata 

operational manager from a different 

region or commodity business, to facilitate 

cross-learning and sharing of good 

practices. Each operation is scored against 

Xstrata’s 17 HSEC Standards, receiving a 

score for systems and a score for 

performance. Performance is assessed 

through a number of criteria including 

interviews with approximately 10% of 

each operation’s workforce, which also 


2006 score range 

7. Legal Compliance 

& Document Control 

8. Operational Integrity 

9. Health & Occupational Hygiene 

2005 Group average 2006 Group average 

10. Biodiversity & Land Management 

11. Contractors, Suppliers & Partners 

12. Community 

13. Project Management 

14. Product Stewardship 

15. Incident Management 

16. Assessment & Reporting 

17. Emergencies, Crises 

& Business Continutity 

provide a valuable indication of the extent 

to which sustainable development 

principles are embedded into our business. 

We require each operation to achieve a 

minimum overall score of 65% 

(‘satisfactory’) in its first HSEC Assurance 

audit and 80% (’good’) within three 

years. Every operation receives a detailed 

audit report with clear improvement 

recommendations to meet this standard or 

to progress to the next level. Operations 

that do not achieve a ‘satisfactory’ score 

are re-audited annually, or more frequently 

depending on the assessed risk, until this 

standard has been attained. 

Every managed operation within Xstrata’s 

portfolio in 2005 was audited by the end 

of that year (a total of 64 sites), to provide 

a comprehensive baseline of the Group’s 

performance and systems. 

In 2006, a total of 21 audits were carried 

out, excluding the rapid assessment audits 

undertaken at each former Falconbridge 

65% satisfactory 

operation. This included the 15 sites that 

did not attain the minimum ‘satisfactory’ 

standard in the baseline audits in 2005. 

All but one of these operations achieved 

or surpassed the ‘satisfactory’ standard in 

2006, with most achieving average scores 

in the ‘good’ range. The remaining site 

(McArthur River Mine in Australia, which 

achieved a score of 61%) will be reaudited 

in 2007, together with a further 

27 sites or complexes, including five 

former Falconbridge operations. 

Average scores for each HSEC standard 

from the baseline audits in 2005 

compared to average scores for 2006 

(using the most recent audit score 

achieved by each operation) are shown in 

the chart above, together with the range 

of scores achieved for each standard.

Scope of Report 

This report covers the economic, environmental and social performance of Xstrata’s managed operations for 

the 12 month period from 1 January to 31 December 2006. 

Target audience 

Existing and prospective shareholders and 

other members of the wider investment 

community are the key target audiences 

for Xstrata’s corporate reports. For the 

Sustainability Report, this specifically 

includes socially responsible investment 

(SRI) analysts and investors. In addition to 

this primary target audience, Xstrata’s 

Group Sustainability Report is written to 

provide a broad range of stakeholders 

with information about the Group’s 

economic, environmental and social 

policies, performance and standards in 

context. It complements the Group 

Annual Report in this regard. This broader 

range of stakeholders includes 

governments, existing and prospective 

employees and their families, development 

organisations and non-governmental 

organisations (NGOs), business partners 

(e.g. suppliers and customers), media, 

unions, local communities and others. 

Evolution in reporting 

This is Xstrata’s third full annual 

Sustainability Report and the fifth annual 

report on the group’s performance and 

approach to sustainable development. 

The previous Sustainability Report was 

published in April 2006 and covered the 

period 1 January to 31 December 2005. 

Each year, the structure, content and style 

of Xstrata’s corporate reporting has 

evolved, using feedback received from 

external and internal stakeholders. 

In 2006, feedback on Xstrata’s activities 

and on the 2005 Sustainability Report 

itself was actively sought and received 

from a wide range of stakeholders, 

including: 

■ the investment community (including 

SRI analysts); 

■ government representatives (local, 

regional and national); 

■ local and international NGOs; 

■ Xstrata employees; 

■ business partners; 

■ expert judging panels (e.g. ACCA 

Sustainability Awards judging panel, 

which shortlisted Xstrata’s 2005 report) 

■ private individuals and local community 

representatives; 

■ peer companies and industry 

associations; and 

■ independent consultancies, including 

the recommendations made by URS 

Verification Limited in its assurance 

work on Xstrata’s 2005 Sustainability 

Report. 

The structure and content of this report 

reflects and incorporates the feedback 

received. Specific changes applied from 

the previous year’s report include further 

amendments to the report structure 

retaining a topic-led approach, the 

strengthening of commodity business 

targets, better alignment of targets, 

material issues and case studies and an 

overview of site audit results from the 

Xstrata Assurance Programme. 

Defining materiality 

The report has been prepared in 

accordance with the principles of 

materiality, completeness, stakeholder 

inclusiveness and sustainability context. 

In defining materiality, traditional financial 

parameters are often too narrow or 

inappropriate for non-financial 

performance. In determining which issues 

or topics are material to Xstrata for 

inclusion in this report, we have considered 

the following: 

■ Xstrata’s core principles and values, 

set out in the Statement of Business 

Principles and Mission Statement, and 

sustainable development framework, 

policies and procedures; 

■ management’s assessment of the 

critical factors for the successful 

fulfilment of Xstrata’s Group strategy 

and the strategic objectives of each of 

its commodity businesses; 

■ an assessment of the key risks that 

may impact the successful fulfilment of 

Xstrata’s strategy, together with an 

assessment of the key opportunities 

Xstrata has to contribute to 

sustainable development; 

■ Xstrata management’s view of key 

material issues for each commodity 

business and the Group as a whole; 

■ feedback from employees, contractors, 

business partners; 

■ industry or company-specific issues 

raised by external stakeholders such 

as NGOs, investors etc. either directly 

with the company or indirectly, e.g. 

through the media or other channels; 

■ GRI G3 guidelines (including the 

Guidance on defining report content) 

and a review of the indicators and 

topics included in a range of 

internationally recognised voluntary 

initiatives and best practice guidelines, 

including the Extractive Industries 

Transparency Initiative, Equator 

Principles and World Bank guidelines 

for the mining sector, Millennium 

Development Goals and UN Global 

Compact; 

■ a review of the key topics and future 

industry challenges reported by peer 

companies and raised by industry 

groups, such as ICMM. 

URS Verification Limited has provided 

assurance on this report including the 

coverage of material topics and their 

opinion is provided in the Assurance 

Statement on page 91. 

Site and divisional reports 

The Group Sustainability Report is 

supplemented by a number of divisional 

and site reports, aimed at local 

stakeholders. Xstrata Nickel has published 

a 2006 commodity business sustainability 

report and all Xstrata Copper divisions 

have produced 2006 sustainability 

reports, together with a number of site 

sustainability reports. All Xstrata Coal 

operations and Australian zinc and copper 

operations will produce a 2007 site 

sustainability report in early 2008. 


Scope of Report 

A year of transformation: Acquisitions and changes to group companies 

February 2006: Creation of ARM Coal (51% ARM-owned, 49% Xstrata-owned), new black empowerment coal company with total 

30% share in Xstrata’s South African coal business 

March 2006: $1.7 billion acquisition of a one-third stake in the Cerrejón 1 thermal coal operation in Colombia, from Glencore 

International AG 

June 2006: $750 million acquisition of the Tintaya copper operation in Peru, from BHP Billiton 2 

August 2006: $18 billion acquisition of Falconbridge Limited, a Canadian-based metals and mining group2 1Cerrejón is managed by an independent joint venture management team and is therefore not included in reported sustainability data 

2Where possible, sustainability data includes acquired operations from the date of acquisition. Xstrata data on a standalone basis is also reported, to provide a basis 

for comparison with 2005 data. 

EBIT † 

by origin 

North 

America 22% 

EBIT † 

by commodity 

Zinc 20% 

Nickel 11% 

Europe 6% 

Aluminium 2% 

Africa 4% 

South America 43% 

Alloys 3% 

Coal 11% 

Copper 53% 

†On a pro forma basis, including Tintaya, 

Cerrejón and Falconbridge from 01.01.06. 


Australia 25% 

This report and all published site and 

divisional sustainability reports, financial 

reports and associated publications are 

available to download from the Xstrata plc 

website www.xstrata.com or as hard 

copies on request. 

GRI compliance 

This year we are transitioning from 

compliance with the GRI 2002 guidelines 

to compliance with the revised GRI G3 

guidelines, published in October 2006. 

The application level for this report is 

A+ and has been independently reviewed 

and agreed by URS Verification Limited 

The performance indicators and sector 

supplement performance indicators selected 

in this report reflect the Group’s significant 

or material impacts, to enable stakeholders 

to assess Xstrata’s performance and 

approach to managing sustainability issues. 

They are intended to provide a balanced 

and complete overview of performance 

for a wide range of stakeholders. 

A GRI navigator detailing how Xstrata 

has addressed the GRI requirements 

is published separately on our website 

www.xstrata.com/sustainability. A 

summary GRI index is also provided 

on page 90 of this report. 

Presentation of data and content 

The narrative and quantitative information 

in the Sustainability Report covers every 

managed (controlled) operation within the 

Xstrata Group, save where comparable 

data is not available for the former 

Falconbridge operations, acquired in 

August 2006. 

Wherever possible, two sets of data are 

reported as follows: 

■ Data relating to the former Xstrata 

Group, excluding the former 

Falconbridge business, to provide 

a basis for comparison with 2005 

data; and 

■ Data relating to the enlarged Xstrata 

Group, including Falconbridge from 

the time of acquisition, to provide an 

overview of the Group’s actual 

performance in 2006, where this data 

is available and comparable. 

For a number of indicators, the former 

Falconbridge operations did not report 

data in line with Xstrata protocols. 

Since Xstrata’s acquisition, the former 

Falconbridge operations have aligned 

sustainability reporting with Xstrata’s 

protocols. From 1 January 2007, every 

Xstrata managed operation reports a full 

set of comparable data in line with GRI 

G3 on a monthly basis, using Xstrata’s 

custom-built, web-based database.

Operations in which Xstrata has an 

interest but is not the operator, (i.e. assets 

over which Xstrata exerts ‘significant 

influence’ under GRI definitions), are not 

included in the sustainability data 

reported, but are referred to from time to 

time in the narrative text of the report. 

A full list of Xstrata’s operations, including 

ownership information and production 

capacity, is provided on pages 101 to 105 

of the 2006 Annual Report. 

A summary of key sustainability data, 

including production data, is provided on 

pages 88-89. This is supplemented by a 

comprehensive performance datasheet 

provided on our website. 

Energy use for 2005 has been restated 

from 57.6 petajoules to 55.4 petajoules, 

as a result of improved electricity 

consumption calculations. 

Independent assurance 

URS Verification Limited has conducted 

a thorough and independent assurance 

programme based on the AA1000 

Assurance Standard (AA1000AS). 

For the third consecutive year, 

Xstrata’s Sustainability Report has been 

independently assessed against this 

standard. The Board HSEC committee 

considers the AA1000AS to provide the 

most comprehensive benchmark against 

which to measure Xstrata’s sustainable 

development reporting. The AA1000AS 

assesses reporting against three assurance 

principles: materiality, completeness and 

responsiveness. The independent 

assurance undertaken by URS included 

site visits, data verification and external 

assurance of Xstrata’s compliance and 

application level of the GRI G3 guidelines. 

A brief description of the process together 

with the signed assurance statement and 

recommendations are set out on page 91. 

Feedback 

We welcome all feedback on this report, 

the information provided in it, or on 

Xstrata’s activities generally. Please fill in 

the website feedback form available at 

www.xstrata.com/feedback, or email us at 

sustainability@xstrata.com. Contact details 

for the relevant Xstrata personnel are also 

included on the inside back cover of this 

report and on Xstrata’s website. 

Local farmer in vineyard at Quebroda de Hualfín, supported by Minera Alumbrera, Argentina

Strategy and Sustainable Development 

Xstrata’s primary business objective is to create superior shareholder value by growing and managing a 

diversified portfolio of metals and mining businesses. Our mission recognises that to continue to grow and 

create value over the long term, we must operate ethically and responsibly, through mutually beneficial 

partnerships with our stakeholders. Our Statement of Business Principles sets out the ethical framework for 

our activities. 



Our commitment to the principles of sustainable development is based on our belief that operating 

responsibly and to the highest international standards, regardless of our location, mitigates risks, creates 

opportunities and enhances our reputation and competitive position. In particular, a strong reputation for 

operational and environmental excellence and industry-leading community engagement enables us to gain 

access to new resources, maintain a social licence to operate from the communities associated with our 

operations, attract and retain the best people and access diverse and low-cost sources of capital. 

Xstrata differentiates itself from its 

industry peers by devolving maximum 

responsibility and authority to its 

commodity business units. We believe this 

directly benefits our operations by creating 

a strong sense of local ownership, where 

entrepreneurial managers are empowered 

and incentivised to address site-specific 

challenges and seize opportunities. Each 

commodity business is fully resourced to 

function as an independent business and 

is accountable for all aspects of its 

operations from exploration to postclosure 

remediation, within defined 

authority levels and the Group’s 

governance framework. 

We are committed to continuous 

improvements in our health, safety and 

environmental performance and to 

sharing the benefits of our activities 

locally, so that we leave behind a positive 

legacy of stronger, more sustainable 

communities once mining activities cease. 

Xstrata has grown primarily through 

acquisition. When we acquire operations 

or companies we follow a comprehensive 

and proven integration process to ensure 

that HSEC risks and opportunities are 

identified and properly managed. 

We aim to improve the performance 

of acquired businesses in line with our 

HSEC policy and standards, to ensure a 

consistently high level of performance 

across the Group. 

A detailed description of Xstrata’s Group 

and commodity business strategies, the 

principal risks and uncertainties facing the 

business and key performance indicators 

to measure our progress are set out in the 

2006 Annual Report. The Chief Executive’s 

Report on pages 4 and 5 of this 

Sustainability Report sets out our strategy, 

successes and future challenges in 

embedding sustainable development 

principles into our business. 

The consideration of sustainability risks, 

challenges and opportunities is integrated 

in the way we manage our business. Each 

commodity business has developed a 

sustainable development strategy and 

incorporates non-financial, social and 

political risks into risk management 

processes. The strategic imperatives and 

risks identified are being integrated into 

our annual budgeting, overall strategic 

and business planning processes. 

Key Sustainability Challenges 

The sustainability challenges listed have 

been selected due to their potential or 

actual materiality to our present or future 

business. Issues have been identified 

through internal reviews by commodity 

business management, together with 

feedback from a range of stakeholders. 

Climate change 

As the world’s largest producer of export 

thermal coal and a significant consumer of 

electricity, particularly in our metallurgical 

operations, climate change is one of the 

most pressing challenges we face. Our key 

challenges are to reduce the direct and 

indirect greenhouse gas emissions from 

our operations, and to play an active role 

in investing in and advocating wider 

support for the development of 

technological solutions to minimise the 

emissions generated by our customers 

from burning coal as a source of energy. 

Workplace safety and 

fatality prevention 

The elimination of injuries and fatalities 

from our business remains a key challenge, 

particularly but not exclusively in South 

Africa, where the majority of fatal and 

critical incidents have occurred. To support 

the progress made through process safety 

and leadership programmes, we are 

focusing on the behaviour of our 

managers, employees and contractors in 

approaching and managing risk, through 

sustained, intensive fatality prevention and 

major hazard management programmes. 

We are also increasing our influence on 

and monitoring of the safety performance 

of contractors. 

Our Values and Beliefs 

We aim to operate with zero harm to our people, the environment and local communities 

Work-related incidents, illnesses and injuries are preventable 

Foreseeable hazards and environmental impacts must be identified, the associated risk 

assessed, and where reasonably practical eliminated, or otherwise controlled 

There is a safe and correct way of doing every task, however urgent or important 

We are responsible for our own actions and the occupational health and safety of our 

fellow workers 

Health, safety and environmental performance and community engagement can be 

continually improved 



Laboratory work at the Nikkelverk refinery in Kristiansand, Norway. 

HIV and AIDS 

HIV and AIDS continue to present the 

greatest health risk to our workforce and 

the communities associated with our 

operations in Southern Africa and in a 

number of other high risk areas, including 

the Dominican Republic. In South Africa, 

we have extended our innovative 

workplace programmes to communities 

and recently signed a first-of-its-kind 

agreement with the regional South 

African health authorities to work 

together in a public-private partnership to 

expand our programmes further. Further 

detail about these initiatives is provided in 

the Workplace and Our People chapter 

of this report. 

Water use and quality 

Xstrata operates in a number of arid 

regions, namely in Australia, Peru and the 

Andean region in north Chile where our 

key challenge is to minimise raw water 

extraction, improve water efficiency and 

increase the proportion of water recycled 

on site. In water-abundant areas such as 

Canada and Central America, our 

principal challenge is to improve water 

quality, share excess water with 


communities, other operations or 

stakeholders and control water flows 

in extreme weather events. 

Air emissions 

Xstrata’s primary air emission is sulphur 

dioxide (SO2) emissions from metallurgical 

smelting operations. Each relevant 

installation measures and seeks to reduce 

emissions on a continuous, sustainable 

basis. Our copper and lead operations at 

Mount Isa, Australia comprise the majority 

of the Group’s SO2 emissions, together 

with smelting operations acquired from 

Falconbridge in Chile and Canada. A 

number of targeted initiatives are under 

way to capture or reduce SO2 and other 

emissions, in particular at the Mount Isa 

and Altonorte (Chile) operations. 

Biodiversity conservation and 

land management 

One managed operation and two 

non-operational sites (including acquired 

operations) are adjacent to protected 

areas for biodiversity. A number of other 

operations have identified threatened 

or vulnerable species or habitats in 

neighbouring areas. Every operation is 

required to develop and actively 

implement a biodiversity conservation 

plan. A particular area of focus in 2007 

is the development of a biodiversity 

offset programme to compensate for the 

conversion of the McArthur River Mine 

in Australia from an underground to an 

open cut operation. The conversion 

requires the diversion of a 5.5 kilometre 

section of the seasonal McArthur River. 

Access to resources in more 

challenging locations 

Xstrata’s Mission to continue to grow and 

create value for our shareholders depends 

on our ability to secure access to resources 

to replace our current mining operations. 

Increasingly, new deposits are located in 

less politically or socially stable areas of 

the world, with less well developed 

regulatory regimes and socio-economic 

institutions. Effective due diligence and 

the ability to assess socio-political and 

environmental risks are essential to 

operating successfully in more challenging 

locations. Xstrata’s sustainable 

development framework and Business 

Principles set global standards for our 

operations in line with or exceeding the 

requirements of national legislation, 

regardless of location. 

Closure planning and 

closed site management 

Following the acquisition of Falconbridge, 

Xstrata’s businesses now manage 44 

closed sites that require ongoing 

maintenance and treatment of water 

run-off from the site. In addition to 

ensuring adequate financial provisions are 

made for responsible and sustainable 

closure of operations, detailed closure 

planning takes place several years in 

advance of the anticipated cessation of 

operations, integrating social, economic, 

environmental and community health 

issues and including stakeholder 

consultation.

Key Sustainability 

Opportunities 

In addition to assessing the key 

sustainability challenges and risks facing 

Xstrata, our businesses also consider 

opportunities to create value for 

shareholders and make a positive 

contribution to sustainable development. 

These include: 

■ Improving energy and resource 

efficiency at our operations to 

optimise the use of resources in 

providing society’s basic materials 

■ Recycling base and precious metals, 

through our dedicated facilities in 

Canada, the US and Asia. This ensures 

that natural resources are efficiently 

used and reused, prolonging their life 

cycle, recouping additional value and 

reducing waste. An expansion of the 

plant is also under way at Sudbury 

Smelter, Canada 

■ Developing and marketing proprietary 

technologies to increase the efficiency 

of metals and mining operations, 

through: 

■ Xstrata Technology’s smelting, refining, 

grinding and processing products, 

many of which are industry leaders, 

are marketed to metals and mining 

companies globally, including Xstrata’s 

own operations 

■ Xstrata Process Support develops 

processing solutions for Xstrata’s 

operations to improve efficiency 

and solve processing bottlenecks 

■ Proprietary technological solutions are 

developed by Xstrata’s commodity 

businesses to improve efficiency. An 

example is the Premus technology 

developed by Xstrata Alloys to reduce 

the energy intensity of ferrochrome 

production, currently in use at 

Xstrata’s Lion Ferrochrome and 

Lydenburg plants in South Africa 

Xstrata Nickel’s Falcondo operation supports local farmers to grow crops and preserve forest 

through the Falcondo Foundation, Dominican Republic 

■ Contributing financially and 

advocating wider industry and 

governmental support for the 

development and implementation of 

clean coal technologies, to reduce the 

greenhouse gas emissions from using 

coal as a source of energy, enabling 

coal to continue to fuel economic 

and social development in a 

carbon-constrained world 

■ Identifying market opportunities for 

our products or by-products arising 

from advances or trends in sustainable 

development, for example the 

potential market for vanadium for 

use in redox batteries used in wind 

turbines, the use of coal-seam 

methane to generate electricity, 

or the use of nickel in flue gas 

desulphurisation scrubbers in coalfired 

power plants. 


Governance and Ethics 

Xstrata is committed to best practice in corporate governance, recognising that strong and accountable 

governance is directly linked to our ability to manage risk, seize opportunities and achieve optimal 

performance. 


Xstrata’s Statement of Business Principles sets out the ethical framework for our activities and details our 

commitment to work ethically, responsibly, openly, together and with others. 

Corporate governance 

Board 

Xstrata is governed by a robust Board 

comprising eight non-executive directors 

and three executive directors. Of the eight 

non-executive directors, six are considered 

by the Board to be independent. This is 

defined as independence from 

management and free from any business 

or other relationship which could 

materially interfere with the exercise of 

their independent judgement. The 

remaining two non-executive directors, 

Willy Strothotte, Xstrata plc Chairman, 

and Ivan Glasenberg, non-executive 

director, are directors of Glencore 

International, Xstrata’s major shareholder, 

and as such, are not considered to be 

independent. The roles of Chief Executive 

and non-executive Chairman are 

separated, in line with best practice. David 

Issroff, a non-executive director, resigned 

during 2006. 

Xstrata’s adherence to the principles and 

provisions of the UK Combined Code on 

Corporate Governance is set out in the 

corporate governance report on pages 

115 to 125 of the 2006 Annual Report, 

together with an explanation of key 

governance policies and procedures. 

Xstrata holds an annual general meeting 

(AGM) in Switzerland each year, at which 

shareholders are able to put questions, 

make recommendations or express 

opinions to the Board. For the first 

time this year, the AGM in May 2007 

will be available to view via a live 

and archived webcast from the 

company website. 

Committees of the Board 

There are four formally constituted 

committees of the Board: Audit, 

Nominations, Remuneration and Health, 

Safety, Environment and Community 

(HSEC). The terms of reference for each 

committee are available from Xstrata’s 

website. Further information on the Audit, 

Nominations and Remuneration Board 

committees, including membership, areas 

of responsibility and key activities in 2006 

are provided on pages 122 to 125 of the 

2006 Annual Report. 

HSEC Committee 

The Board sets and reviews HSEC policy 

globally. To assist the Board to fulfil its 

HSEC roles and obligations, the Board 

HSEC Committee was established in 

February 2005. This committee provides 

the Board with additional focus and 

guidance on key global HSEC issues, 

monitors and evaluates reports on the 

effectiveness of Xstrata’s sustainable 

development framework and benchmarks 

Xstrata’s plans, strategies and progress 

against other ICMM member companies. 

The Board HSEC Committee is chaired 

by Ian Strachan and comprises three 

independent non-executive directors 

and the Group Chief Executive. Paul Jones, 

General Manager Sustainable 

Development, acts as secretary to the 

committee. Professor Jim Joy, Professor 

of Risk Management at the Sustainable 

Minerals Institute, University of 

Queensland, Australia acts as independent 

HSEC Risk Adviser to the Committee. 

All Board members are provided with 

regular independent briefings on social, 

ethical and environmental issues and 

are able to consult external experts at 

Xstrata’s expense. The HSEC Committee 

reviews its performance, constitution and 

terms of reference each year and reports 

any recommended changes to the 

Xstrata Board. 

The Committee meets quarterly and in 2006 

again conducted site visits to Xstrata’s South 

African operations. At each formal meeting, 

the Chief Executive of Xstrata’s commodity 

businesses presents the business HSEC 

strategy, risks and performance to the 

HSEC Committee in rotation. 

A summary of the HSEC Committee’s 

activities in 2006 is provided on page 

125 of the 2006 Annual Report. 

Xstrata plc Board members visit the ATCOM 

coal mine, South Africa 



Alloys HSEC 

Committee 

Alloys HSEC 

Managers 

Divisional HSEC 

Managers 

Site HSEC 

Managers & Teams 

Board HSEC Committee 

Coal HSEC 

Committee 

Coal HSEC 

Managers 


Managers 

Site HSEC 


HSEC governance 

Xstrata sets global HSEC policy and HSEC 

management standards for application 

across its operations. The Group Executive 

Committee is directly accountable to the 

Xstrata plc Board and is responsible for 

implementing Group strategy within its 

delegated levels of authority and for 

overseeing the Group’s operational 

business units. 

The Group Executive Committee monitors 

and evaluates reports from each of 

Xstrata’s commodity businesses on a 

monthly basis to determine the 

effectiveness of HSEC policy, governance, 

strategy, management standards and 

performance globally. The Group Executive 

Committee promotes the sharing of 

relevant HSEC information, incident 

investigation findings, good practices and 

relevant technologies to facilitate 

improvements in HSEC performance 

across its global business. The Group 

Executive Committee reports to the Board 

on key global HSEC issues. 

Our management philosophy is to allow 

each commodity business to operate with 

a high degree of autonomy within the 

structure of Xstrata’s global policies and 

HSEC management standards. We believe 


HSEC Governance 

Xstrata plc Board 

Copper HSEC 

Committee 

Copper HSEC 

Managers 


Managers 

Site HSEC 


Group Executive Committee 

Nickel HSEC 

Committee 

Nickel HSEC 

Managers 


Managers 

Site HSEC 


this directly benefits our operations by 

creating a strong sense of local HSEC 

ownership. Within these standards, it is 

the responsibility of each commodity 

business to implement specific HSEC 

management initiatives and controls. 

Each commodity business is governed 

by a commodity business Board. Each 

commodity business Board includes a 

Group executive representative and 

reports to the Group Executive 

Committee. Each commodity business 

has an Executive HSEC Committee which 

provides the commodity business Board 

with additional focus and guidance on 

HSEC strategy and key HSEC issues. 

The results from comprehensive HSEC 

governance reviews conducted during 

2005 at Xstrata Coal and at the Group 

level were used as a basis for selfassessments 

conducted by Xstrata 

Alloys, Xstrata Copper and Xstrata Zinc 

in 2006. These assessments identified 

enhancements to the HSEC framework 

in line with international best practice. 

HSEC management 

The Group General Manager (GM), 

Sustainable Development reports directly 

to the Chief Executive and oversees the 

Zinc HSEC 

Committee 

Zinc HSEC 

Managers 


Managers 

Site HSEC 


GM Sustainable 

Development 

strategic management and global 

implementation, review and assurance 

of Xstrata’s sustainability policies and 

standards. Together with Group Corporate 

Affairs, the Group GM Sustainable 

Development is responsible for the 

Group’s interface with stakeholders 

on sustainability issues. 

HSEC resources are focused at the site 

level. Senior divisional and commodity 

business HSEC managers assist sites 

to develop HSEC frameworks and 

management systems that are aligned 

to Group policies and standards, in 

order to manage the HSEC risks in their 

business or operation. 

Sustainable Development 

Framework 

Xstrata’s Mission, Business Principles, HSEC 

Policy, Corporate Social Involvement (CSI) 

Policy, Risk Management Policy and HSEC 

Management Standards set out the guiding 

principles and strategic framework for the 

management of sustainability issues across 

the business. Each commodity business 

maintains a HSEC management framework 

which guides the development of 

operational HSEC management systems. 

These systems and performance are 

independently audited against Group

standards through the HSEC Assurance 

Programme at least once every three years, 

or more frequently dependent on 

performance and risk profile. 

A review of our Sustainable Development 

framework was initiated in 2006 and is 

ongoing in light of Xstrata’s transformation 

since 2002 to benchmark against 

best practice. 

Within these Group requirements, it is the 

responsibility of each commodity business 

to implement specific HSEC, CSI and 

sustainability initiatives and controls. 

Xstrata’s policies, business principles 

and HSEC Management Standards 

are available from the Sustainability 

section of the Xstrata website 

(www.xstrata.com/sustainability). 

Remuneration 

Xstrata’s remuneration structure is designed 

to attract, retain and motivate highly 

talented individuals to attain exceptional 

performance towards our strategic aims. 

The remuneration of all company directors 

is fully disclosed in the Remuneration 

Report, published in the Annual Report 

2006 (pages 126-139). This disclosure 

includes directors’ benefits, together with 

an explanation of each component of 

directors’ pay, including service contracts 

and performance criteria for long-term 

incentives. Remuneration for executive 

and senior management across our 

businesses is closely aligned with Xstrata’s 

strategy to grow and create long-term 

shareholder value in a sustainable manner. 

A high proportion of total remuneration is 

‘at risk’ and performance-related, 

incorporating demanding short-term and 

long-term financial and non-financial 

performance measures. 

These performance measures are 

determined on an individual basis and 

include absolute performance (e.g. return 

on capital employed), relative performance 

(e.g. performance in comparison to peers) 

and non-financial performance measures 

(e.g. safety performance), in line with 

international best practice. 

HSEC performance determines a proportion 

of all operational and senior management 

bonus awards. The proportion varies 

between commodity businesses and regions 

and is determined by commodity business 

executive teams and reviewed by the 

commodity business Board. In South Africa, 

where the vast majority of fatal incidents 

have occurred, HSEC performance typically 

accounts for 40-60% of total performance 

bonuses. For mine supervisors and 

operational employees, this proportion is 

usually greater (up to 80%). 

Risk management 

HSEC Assurance Programme 

In 2005, Xstrata implemented a 

comprehensive, independent Group-wide 

HSEC Assurance Programme to provide 

assurance to the Board. Every managed 

site, project and commodity business was 

independently audited in 2005 against 

Xstrata’s HSEC policy, business principles 

and 17 management standards to provide 

a baseline. The Assurance Programme 

assesses both HSEC management systems 

and HSEC performance, providing a 

separate systems and performance score 

for each of the 17 Standards and provides 

management with a detailed report 

outlining the steps to be taken to improve 

performance. Examples of good practices 

identified through the assurance 

programme are collated and shared 

with all operations. 

A total of 21 operations were audited in 

2006, including 15 sites that did not attain 

Xstrata’s minimum ‘satisfactory’ level 

(requiring a minimum average score of 

65% across all criteria). Average scores in 

2006 compared to 2005 performance are 

set out on page 10 of this report. A further 

27 sites or complexes, including five former 

Falconbridge operations, will be audited 

in 2007. 

Xstrata monitors non-managed operations 

and joint ventures to ensure that Group 

HSEC policies and standards are aligned. 

Where operations are owned jointly with 

other international mining groups with 

comparable assurance programmes, audits 

are carried out on a rotational basis to 

determine performance against each 

shareholder company’s policies and 

management standards. In December 

2006, the Antamina copper-zinc operation 

in Peru was audited according to BHP 

Billiton HSEC Standards. 

The Falcondo Foundation school sponsorship 

programme has benefited over 78,000 students 

in the Dominican Republic 



Risk management and internal audit 

Xstrata has implemented a well established, 

on-going process for identifying, evaluating 

and managing significant risks faced by the 

Group as an essential element of business 

planning. Xstrata’s risk management policy 

is published on our website. Principal risks 

and uncertainties from a Group perspective 

are outlined on pages 22 to 25 of the 2006 

Annual Report. 

Our approach to risk management is value 

driven and has the stated objective of 

ensuring ‘an environment where we can 

confidently grow shareholder value 

through developing and protecting our 

people, our assets, our environment and 

our reputation’. The Group-wide risk 

management process is led by the 

Global Head of Internal Audit and Risk, 

who reports directly to the Board Audit 

Committee. 

Each commodity business unit and 

Xstrata’s corporate centre carry out a 

comprehensive annual risk review, 

including risk workshops attended by 

Sustainable Development Document Hierarchy 


Group internal audit and external advisers 

as appropriate. Site, divisional, commodity 

business and Group risk registers are 

updated regularly and include financial, 

HSEC and operational risks. 

Objectives in the business plan are aligned 

with risks and a summary of the key risks, 

related internal controls, accountabilities 

and further mitigating actions that are 

planned is included in business plans and 

are reviewed and approved by the 

Executive Committee. Progress against 

plans, significant changes in the business 

risk profile and actions taken to address 

controls and mitigate risks are reported 

quarterly to the commodity business 

and Board Audit Committees and to 

the Executive Committee and the Board 

as appropriate. 

A standardised reporting and monitoring 

system – CURA – was implemented across 

the Group in 2005 to allow consistent 

reporting of risk and mitigating actions 

across all business units. In 2006, Xstrata’s 

commodity businesses developed risk 

Mission 

Business Principles 

HSEC, CSI & Risk Management Policies 

HSEC Management Standards 

HSEC Procedures and Guidelines 

Commodity Business HSEC Management Framework 

Operational HSEC Management Systems 

profile reporting, which enables executive 

management and the Audit Committees to 

gain a better perspective of how and the 

extent to which key risks are being 

managed and monitored within the Group. 

A risk and control management maturity 

model has also been developed to assess 

levels of ‘risk maturity’ within Xstrata. 

Xstrata’s Risk Management methodology 

and framework were implemented across 

the assets acquired in 2006 (Falconbridge 

and Tintaya) and completed by the end of 

2006. Risk champions and coordinators 

were appointed in each of the new 

divisions and operations and received 

comprehensive training in Xstrata’s 

governance and risk management policy, 

procedures and methodology, together 

with risk analysis training. 

Xstrata’s Internal Audit function is another 

important element of the overall process 

by which the Executive Committee and the 

Board obtain assurance that risks are being 

properly identified, managed and 

controlled. Risk-based internal audit plans

are prepared annually, and findings and 

recommendations are reported to the 

various Audit Committees on a quarterly 

basis. Internal Audit activities in 2006 

focused on the more significant risks and 

related internal controls identified in the 

risk self-assessment process. Findings and 

agreed actions were reported to 

management and the Audit Committees. 

Ethics and business principles 

All employees, suppliers, contractors and 

business partners are provided with our 

Statement of Business Principles before 

commencing work with Xstrata. It is the 

responsibility of every employee and 

contractor to adhere to our Business 

Principles. 

Our Statement of Business Principles is 

produced in the 15 native languages 

spoken across the enlarged Group, 

including French, Portuguese, Norwegian, 

Inuktitut (the Inuit language of northern 

Québec), and Quechua (spoken by Andean 

communities in southern Peru). The 

document is available in every language 

from Xstrata’s website. 

Ethics line 

The Xstrata Ethics Line is a confidential 

‘whistle-blowing’ facility, operated 

independently by KPMG, through which 

any potential breach of our business 

principles can be reported in confidence. 

The call line provides a freephone number 

for every country in which the Group is 

active and all calls are reported on an 

anonymous basis to the Head of Internal 

Audit and Risk for appropriate action. 

There is also a dedicated email address: 

ethics@xstrata.com. Emails to this address 

are read by the Head of Internal Audit and 

Risk only and are confidential. Ethics line 

details are published on the back of the 

Statement of Business Principles leaflets 

and are regularly communicated through 

internal briefings and poster campaigns to 

ensure employee awareness. 

In 2006, a total of 11 incidents were 

reported via these whistle-blowing 

facilities. All reported incidents were 

investigated and five incidents in South 

Africa, Argentina and Australia led to 

further investigations and actions and 

were reported to the Board Audit 

Committee. No investigation led to 

criminal proceedings. No incidents of 

fraud were reported during the year. 

The five incidents investigated related to: 

■ procurement practices that contravene 

Xstrata’s Business Principles; 

■ contractor misconduct; 

■ alleged drugs offences; 

■ inaccurate reporting of operational 

data. 

Bribery and corruption 

Xstrata’s Business Principles state that we 

do not offer, solicit or accept any form of 

bribe or inducement. Our Corporate Social 

Involvement Policy also prohibits political 

contributions of any kind. No political 

donations were made in 2006, in 

accordance with Xstrata’s policy. This 

includes any type of support – financial or 

non-financial – for politically-linked events 

or fund-raising activities. This policy has 

been rolled out across the operations 

acquired in 2006, necessitating changes in 

policy in some regions. 

All Xstrata employees and contractors 

receive the Statement of Business 

Principles and receive training and 

communications about the commitments 

contained within the Business Principles, 

Steeve Brassard, Alain Provencher, 

Serge Trotechaud and Paul Lapotite conduct 

a behavioural safety tour at the Canadian 

copper refinery 

including the elements relating to bribery 

and corruption. 

Xstrata’s internal audit function, supported 

by KPMG, takes into account identified 

fraud and compliance risks associated with 

our key business activities, including the 

ethical performance expectations contained 

in our Statement of Business Principles. 

Bribery and corruption risks are assessed 

by operation, dependent on the identified 

level of country or regional risk, the 

policies and practices of other companies 

operating in the region and an assessment 

of the probity and transparency of 

government, suppliers, contractors and 

other business partners. Each operation is 

required to have effective controls in place 

to manage these risks. Procurement of 

goods and services and interaction with 

regulators and government are two higher 

risk areas for potential bribery and 

corruption practices. No such practices 

were identified in 2006. 

For example, when reviewing procurement 

activities, Xstrata’s internal audit function 

tests the adequacy of controls designed 

to ensure business dealings with our 



Sampling earth at McArthur River zinc-lead 

mine, Australia 

suppliers are conducted in a competitive 

environment, which if effective, would 

reduce the risk of unethical business 

practices from occurring, such as the 

payment or acceptance of bribes to secure 

business. These risks and control measures 

are reviewed on a quarterly basis as part 

of the Group’s risk management process. 

Supply chain, procurement 

and free enterprise 

Xstrata does not have a global 

procurement function or policy, in line 

with our devolved management structure. 

This allows our sites and businesses to 

give preference to local suppliers and 

provides greater flexibility in planning and 

securing procurement. Where there is a 

commercial or strategic incentive to do so, 

commodity businesses operating in the 

same region combine purchasing power 

from time to time. 

We engage with our suppliers, contractors 

and business partners to assess HSEC 

performance, training and practices in line 

with Xstrata’s HSEC Management 

Standards. All suppliers and contractors 

are provided with a copy of our Business 

Principles and we actively encourage and 


monitor HSEC and ethical performance, 

including specific health, environmental, 

safety, community and human rights 

criteria as appropriate. We pay suppliers 

promptly, respect contracts and ensure that 

all transactions are properly authorised and 

accurately recorded. 

Xstrata’s Business Principles state that we 

will support free enterprise and will 

compete fairly for business, with scrupulous 

regard for those regulations which promote 

competition and protect consumers. 

To enhance understanding of competition 

law and appropriate behaviour when 

dealing with customers, competitors, 

trade associations, suppliers and distributors, 

Xstrata has developed three bespoke, 

interactive, web-based training modules, in 

conjunction with legal advisers Freshfields 

Bruckhaus Deringer and Interactive 

Dialogues Limited (compliance software 

providers). The modules are run in three 

different languages and provide educational 

materials and test questions, using a range 

of simulated situations Xstrata employees 

face in day to day interactions, covering all 

major anti-trust and competition issues. 

Every relevant employee is required to 

complete all three modules and achieve a 

score in excess of 70%. 

The programme was first rolled out in 

2005 and is completed annually. In 2007, 

over 400 employees will complete the 

training modules across each of Xstrata’s 

commodity businesses and corporate 

personnel. Additional training and testing 

is provided for those who do not achieve 

70% and for any person who requests 

further information about anti-trust issues. 

The programme is reviewed annually to 

ensure relevance with current legislation, 

best practice and Xstrata’s activities. 

Human rights 

Xstrata’s Business Principles contain our 

endorsement of the principles set out in 

the UN Universal Declaration of Human 

Rights and the International Labour 

Organisation Conventions. The concept of 

human rights encompasses a broad 

spectrum of basic rights. 

Basic human rights in any particular 

country are primarily safeguarded by 

governments and the legal system, 

however we recognise that we have a 

responsibility to ensure that Xstrata’s 

businesses uphold and promote the 

principles we endorse and to require 

contractors, suppliers and business 

partners to do the same. 

For Xstrata, the main areas of focus are 

protecting the rights of our employees 

and contractors to work for equal pay, to 

associate freely, to a safe and healthy 

work environment, to non-discrimination 

and fair treatment and to legal rights. We 

also support the rights of employees, 

community members and other 

stakeholders to be treated with dignity in 

a manner that respects cultural heritage, 

traditions and norms. 

In areas where we employ security 

personnel (either directly or as contractors) 

to protect our people and assets, we 

ensure that appropriate human rights 

training has taken place and monitor 

compliance to our Business Principles, 

HSEC policy and standards, in line with 

Xstrata’s management standard for 

Suppliers, Contractors and Partners. 

Human rights training programmes are 

being implemented at operations in higher 

risk locations, for example in Colombia, 

Dominican Republic, Peru and Tanzania, 

with a specific focus on security and 

community relations personnel. In 

Colombia and Peru this training is 

extended to community members, local 

authorities and other stakeholders. In 

2006, the non-managed Cerrejón coal 

operation in Colombia, in which Xstrata 

has a one-third stake, signed an 

agreement with the Colombian Red Cross 

to strengthen its existing human rights 

programme. The agreement will provide 

further training and education about 

human rights to Cerrejón personnel, 

members of the Colombian army and local 

police force. 

All major suppliers and contractors are 

subject to stringent HSEC standards and

must comply with Xstrata’s Business 

Principles, which include respect for human 

rights. Specific human rights criteria are 

included in all contracts relating to the 

provision of security contract personnel, 

including in Colombia, Dominican 

Republic, Peru and Tanzania. 

Child and forced labour 

Xstrata’s Business Principles uphold the 

elimination of all forms of forced or 

compulsory labour and stipulate that no 

form of child or forced labour will be 

tolerated. Following the acquisition of 

Falconbridge, Xstrata has operations in two 

geographic regions where child labour 

statistics indicate there is a heightened risk: 

Tanzania and the Dominican Republic. 

Operations in higher risk areas impose a 

minimum age of 18 for all employees and 

contractors. All operations report the age 

of their youngest employee or contractor 

on an annual basis and are audited through 

the internal audit risk management 

programme. In 2006, the youngest 

reported employee was an apprentice 

enrolled in a workplace training programme 

in Australia and was 16 years old. 

Advocacy and our global role 

Xstrata plays an active role in a number of 

significant international and national 

industry organisations and multi-stakeholder 

groups, through membership, funding, 

provision of expertise and participation in 

committees and working groups. 

The major sustainability organisations, 

associations or charters in which Xstrata 

participates are listed in the table on page 

26. Each of Xstrata’s commodity business 

also plays a role in commodity-specific 

industry organisations, listed on page 91 

of this report. All initiatives listed are 

voluntary. 

In 2006, Xstrata became a full member of 

the International Council on Mining and 

Metals (ICMM). ICMM is a CEO-led 

organisation representing many of the 

world’s leading mining and metals 

companies, as well as regional, national 

and commodity associations, all of which 

are committed to improving their 

sustainable development performance and 

to the responsible production of the mineral 

and metal resources that society needs. 

As an ICMM member, Xstrata has 

committed to comply with ICMM’s 

Sustainable Development Framework, 

comprising a set of 10 principles, public 

reporting using GRI guidelines and 

independent third-party assurance. Xstrata’s 

HSEC policy and management standards 

were developed using the ICMM principles, 

together with other international HSE 

standards including ISO14001, OHSAS18001 

and the UN Global Compact. A document 

mapping Xstrata’s sustainable development 

framework to these internationally 

recognised standards is available from our 

website, together with an indicator showing 

how and where Xstrata has reported against 

GRI indicators, the UN Global Compact 

principles and ICMM principles. 

ICMM promotes the perspective and 

experience of its members through its 

involvement in key international initiatives, 

such as the World Bank Extractive Industries 

Advisory Group, and the Extractive 

Industries Transparency Initiative (EITI). 

Extractive Industries 

Transparency Initiative 

Xstrata supports the EITI to increase 

transparency over company payments and 

Government revenues in the extractives 

sector. Over 20 countries have committed 

to EITI principles and criteria, including 

Peru, where Xstrata manages one 

operation and one exploration project and 

has an interest in a further joint venture 

operation. In May 2006, the Peruvian 

Government approved the EITI Action Plan 

drawn up in 2005. The next step is to 

appoint Working Group members and 

commence EITI implementation. We 

continue to welcome the positive steps 

undertaken by the Peruvian Government 

to implement EITI. Xstrata’s payments to 

governments and other economic 

contributions are set out in the Social 

Responsibility chapter of this report. 

Stakeholder engagement 

The term ‘stakeholder’ is used to define 

any person or group of people who can 

affect or is affected by an organisation’s 

activities. Xstrata has identified its 

stakeholders at an operational, regional 

and global level through regular internal 

assessments of key groups, our 

membership of various associations, and 

engagement with interested parties. We 

seek to engage with stakeholder groups 

in a manner that is culturally appropriate, 

effective and transparent. We encourage 

dialogue with our stakeholders and 

integrate stakeholder feedback into 

business planning and strategy. 

Caribou at the Raglan nickel site in 

Northern Quebec, Canada 



Associations and Charters 

Organisation/Initiative Type Region Date of joining 

UN Global Compact Multi-stakeholder: UN, global business, Global March 2006 

civil society, labour 

Extractive Industries Transparency Initiative Multi-stakeholder international partnership Global* July 2004 

Dow Jones Sustainability Indexes Index of sustainability leaders in each sector Global September 

2006 

ICMM CEO-led industry organisation: see page 25 Global May 2006 

Global Business Coalition on HIV/AIDS Global cross-sector business alliance Global February 2005 

HIV/AIDS Powerbelt Initiative SA coal industry, national Government, 

community representatives 

South Africa December 2000 

FutureGen Alliance Multi-stakeholder: US federal government, 

power industry, coal producers, research 

organisations 

United States December 2006 

Australian Prime Minister’s Emissions 

Trading Taskforce 

Commonwealth Governments and business Australia 2007 

International Energy Agency’s Coal 

Industry Advisory Board 

Multi-stakeholder, international coal producers Global 2002 

Australian Greenhouse Challenge Plus Australian industry and federal Government All Australian 

operations 

2006 

COAL21 programme Australian coal industry, power generators, 

Australian state and federal government 

Australia 2002 

Co-operative Research Center for Greenhouse Multi-stakeholder including Australian government, Australia/global 2004 

Gas Technologies (CO2CRC) industry, research institutions 

Co-operative Research Center for Coal in Multi-stakeholder including Australian government, Australia/global 2002 

Sustainable Development (CCSD) industry, research institutions 

Raglan Climate Change Steering Committee Raglan Mine, Canadian Universities, 

Engineering firms, specialists in permafrost 

and climatology 

Canada 2006 

Water Research Commission South African industry, government, NGO, 

academic institutions 

South Africa 2002 

Green Lead Initiative Multi-stakeholder, proactive product stewardship 

programme 

Global 2003 

Nickel Institute and Nickel Producers Nickel producers association with focus on product Global September 

Environmental Research Association stewardship and sustainable development 2006† 

Metals in the Human Environment – Multi-stakeholder comprising network of Canada September 

Research Network (MITHE-RN) Canadian Universities, government and industry 2006† 

Dominican Community Bridge Fund Multi-stakeholder body to generate social investment US and Dominican September 

Steering Committee for Dominican Republic and Dominican communities 

in US 

Republic 2006† 

Minerals Council of Australia Australian mining and metals industry Australia 2002 

Mining Association of Canada Canadian mining and metals industry Canada September 

2006† 

South African Chamber of Mines South African mining industry South Africa 2002 

*Peru is the only implementing country in which Xstrata currently operates. 

†Xstrata became a member of this association through the acquisition of Falconbridge 

26 | Xstrata plc Sustainability Report 2006

Existing community relations and 

engagement activities at McArthur River 

Mine (MRM) were significantly increased 

through the implementation of a 

comprehensive stakeholder engagement 

framework in 2005, ahead of plans to 

convert the mine to an open pit. The 

conversion requires the diversion of a 

5.5km section of the seasonal McArthur 

River and 2.5km of Barney and Surprise 

Creeks. This framework aimed to provide 

information, engage in consultation and 

encourage active participation. 

Information was provided through a regular 

community newsletter, dedicated website, 

information posters, community hotline and 

a series of 10 factsheets, responding to 

specific issues raised by stakeholders. 

Consultation took place through a series of 

meetings with representatives of the 

Australian Federal and Northern Territory 

(NT) Government, industry representatives, 

community organisations including 

traditional owners, indigenous 

representative groups and individual 

community members. The community was 

also invited to comment on the 

development proposal through the public 

review of the Public Environmental Report 

(PER). Site visits and helicopter trips to the 

mine were organised, including visits by 

Gurdanji traditional owners who checked 

on the status of the sacred sites. Feedback 

and submissions received were considered 

within the NT Government’s Assessment 

Report on the PER and Xstrata Zinc’s 

Mining Management Plan. 

The MRM Community Reference Group 

(CRG) was established in February 2006 to 

encourage active participation and a 

forum for ongoing consultation with local 

communities. The group comprises a cross 

section of Aboriginal and non-Aboriginal 

community representatives, local 

businesses, and the local council. A tour 

of a comparable river diversion in the 

State of Victoria was arranged through 

the CRG for community members to view 

first hand how a river diversion can be 

successfully developed. A participatory, 

independent environmental monitoring 

programme has also been established. 

Through the engagement programme, a 

number of concerns about the conversion 

to an open cut mine were raised by 

various groups. These include the 

potential impacts of the river diversion on 

downstream marine life and freshwater 

fish migrating to upstream habitats, 

potential impacts of the loading facilities 

on migratory birds, tailings storage and 

management, community engagement, 

cultural heritage impacts, waste rock 

storage and environmental monitoring. 

Examples of the actions taken to respond 

to these concerns include: 

■ modifying the plans for the river 

diversion and open cut mine plan, 

at an estimated cost of A$10 million to 

incorporate recommendations from the 

NT government’s independent expert; 

■ significantly increasing environmental 

monitoring programmes, including a 

survey of migratory and riparian birds, 

a fish survey and monitoring to ensure 

the river diversion allows adequate 

passage for fish; 

■ committing to an independent review 

of MRM’s environmental monitoring 

programme and publishing results; 

■ committing to establish a biodiversity 

offset programme; 

■ continuing to engage with traditional 

owners on cultural heritage issues and 

concerns; 

■ providing information about the longterm 

testing of the overburden 

emplacement facility and modifying its 

design to avoid disturbing a site of 

archaeological significance; 

■ reporting on the design, monthly 

monitoring and six lines of defence 

that ensure the integrity of the tailings 

storage facility; and 

■ committing to a A$32 million community 

benefits package for the Borroloola 

region over the life of the mine. 

The conversion to open cut has a good level 

of support amongst local communities 

including traditional owners resident in 

surrounding areas to the mine and has 

received NT Government approval and 

Federal Government consent. Unfortunately, 

some groups remain opposed to the 

conversion. We will continue to engage with 

all stakeholders in two-way dialogue to 

ensure maximum transparency, to proactively 

seek community input and to continue to 

respond to issues and concerns raised. 

In early 2007, MRM’s community initiatives 

were recognised with the NT Minerals 

Council Resource Industry Award of 

Excellence for Community Relations 2006. 

Stakeholder Engagement at McArthur River Mine, Australia 



Stakeholder feedback is used to identify 

and manage risks and opportunities, 

guide our strategy and business activities, 

protect and develop our corporate 

reputation, strengthen stakeholder 

relationships, manage expectations, 

respond to concerns and share our plans 

for the business. 

Our key stakeholders are: 

■ Xstrata shareholders; 

■ other members of the investment 

community (including other investors, 

socially responsible investment 

analysts and investors, sell-side 

analysts and others); 

■ Xstrata employees and contractors, 

unions and other organisations that 

represent these groups; 

■ business partners, including JV 

partners, suppliers, customers; 

■ communities associated with or 

impacted by our operations; 

■ local, regional and national 

government; 

■ inter-governmental bodies and 

organisations; 

■ international, national, regional and 

local media; and 

■ non-governmental and development 

organisations. 


Openness and transparency 

Xstrata’s Business Principles state our 

commitment to operate with the 

maximum transparency that is 

commercially possible in every aspect of 

our business. We make all price-sensitive 

and other relevant corporate 

announcements available via our website, 

regulatory news services and other 

communications channels simultaneously 

or as soon as possible after publication or 

announcement. We publish management 

presentations and other relevant 

information about the Group on a regular 

and timely basis on our public website, in 

accordance with Xstrata’s Group 

Communications Guidelines. Annual 

Sustainability Reports and Annual Reports 

are externally audited and data verified. 

Reports and other public documents are 

provided free of charge on request. 

Stakeholder responsiveness 

We use a very broad range of methods to 

engage our stakeholders, ensuring we 

approach stakeholders in a culturally 

appropriate and sensitive manner and 

aiming to encourage feedback and 

dialogue, as well as providing information. 

These include: face-to-face formal or 

informal meetings; presentations; 

Ratanang Care Centre – one of three care centres for orphans funded by Xstrata in South Africa 

conference calls; our website; intranets 

and extranets; financial and sustainability 

reports and newsletters; open days and 

operational site visits; reputation audits or 

perception surveys; whistleblowing 

facilities; formal grievance mechanisms; 

employee newsletters and team meetings; 

multi-stakeholder forums, organisations 

and initiatives; environmental, cultural and 

social impact assessments and baseline 

studies; regular customer, business partner 

and supplier meetings; community 

workshops and dedicated telephone lines. 

Issues raised by stakeholders are 

incorporated into our assessment of our 

key sustainability challenges and the 

topics reported on in this report and 

include topics such as climate change, 

biodiversity conservation, fatal incidents, 

human rights and labour relations 

agreements. The case study on page 27 

illustrates our approach to stakeholder 

engagement relating to the conversion 

of McArthur River Mine in Australia 

from an underground operation to an 

open cut mine.

Workplace and our People 

Xstrata’s Statement of Business Principles sets out our commitment to treat all employees fairly, without bias, 

recognising their rights to a safe, healthy workplace, collective representation, just compensation, job security 

and opportunities for development. We do not tolerate any form of workplace discrimination, harassment or 

physical assault. We support the International Labour Organisation Declaration on Fundamental Principles 

and Rights at Work and the UN Universal Declaration of Human Rights. 


Workplace and our people | Safety 

Our commitments and framework 

Ensuring the safety of our employees and contractors in the workplace is of primary importance. We aim to 

operate with ‘zero harm’ to our employees and contractors and believe that all work-related illnesses and 

injuries are preventable. 

Xstrata’s HSEC policy sets out our 

commitment to eliminating illnesses, 

injuries and fatalities from our business. 

All Xstrata operations maintain 

comprehensive safety management 

systems which are fully aligned to 

OHSAS18001 and AS/NZS 4801. 

Our 17 HSEC management standards 

encompass a number of areas which are 

critical to achieving our aim of zero harm 

at work, including: 

■ effective leadership and accountability 

(Standard 1); 

■ adequate resources (Standard 2); 

■ comprehensive and ongoing training 

and competency testing of personnel 

(Standard 3); 

■ effective communication (Standard 4); 

■ appropriate risk identification and 

management procedures (Standard 5); 

■ catastrophic hazard management 

(Standard 6); 

■ appropriate systems and legal 

compliance (Standard 7); 

■ operational integrity (Standard 8); 

■ appropriate selection and monitoring 

of contractors (Standard 11); 

■ effective reporting, investigation and 

response to safety incidents (Standard 

16); and 

■ appropriate emergency response and 

crisis management procedures 

(Standard 17). 

Xstrata’s HSEC Assurance Programme 

measures performance and systems in 

place at each operation and at the 

commodity business level, to provide 

assurance to the Board that our standards 

are being met and to assist underperforming 

sites to identify actions for 

rapid improvement. 

Health and safety agreements are 

routinely included in union and collective 

agreements. Joint management and 


employee representative health and safety 

committees are in place at the commodity 

business, divisional and operational levels 

and represent over 90% of operational 

employees. 

Key challenges 

A continuing challenge for the Group is 

the elimination of fatal and critical 

incidents, particularly in South Africa. 

A further challenge for 2007 is to achieve 

rapid improvements in the risk 

management and safety performance 

of the former Falconbridge operations, 

where our initial assessment through 

the integration process highlighted a 

compliance-led culture and areas of 

under-investment in operational integrity. 

Fatal incidents 

In 2006, one fatality occurred at Xstrata’s 

operations. This incident occurred in 

October at the South Witbank colliery 

in South Africa, when a maintenance 

employee sustained fatal injuries from 

being caught between a pulley and 

moving conveyor. 

Tragically, in 2007 to date, a further four 

fatal incidents have occurred at managed 

operations, three of which have occurred 

in South Africa and one in Spain. 

At managed operations, full investigations 

to determine the direct and underlying 

causes are carried out for every fatality 

and reviewed by the GM Sustainable 

Development. At non-managed 

operations, investigation findings are 

reviewed by the joint venture Board 

which include Xstrata members. All 

fatalities are discussed by the Executive 

Committee and the Board. Remedial 

actions are undertaken and progress 

against these is subsequently reported 

on a quarterly basis to the Executive 

Committee and Xstrata’s Board. 

Fatality prevention 

A significant proportion of the causes of 

fatal incidents and high potential risk 

incidents relate to behavioural safety 

issues. Other primary causes are falls of 

ground and vehicle incidents (in particular 

collisions between pedestrians and mobile 

equipment underground). Over 90% of 

fatal incidents sustained at Xstrata’s 

operations since the Group’s inception in 

2002 have occurred in South Africa, with 

a higher proportion occurring in 

underground mining operations. 

To address these factors, Xstrata’s South 

African businesses implemented intensive 

fatality prevention programmes in 2004 

which have continued to evolve since then, 

to respond to specific identified risks. 

Updates on progress are provided every six 

months to the Xstrata Board. These 

programmes focus on addressing the 

following causes of critical and fatal 

incidents, identified through an analysis of 

fatalities, high potential risk incidents and 

other critical incidents: 

■ Safety leadership, especially at the 

supervisor level (see Safety Training and 

Leadership on page 36); 

■ Hazard awareness and at-risk 

behaviour (see Safety Training and 

Leadership); 

■ Falls of ground in underground mining 

operations (see Case Study: Xstrata 

Alloys adopts new approach to fall of 

ground management); and 

■ Interaction between pedestrians and 

mobile equipment or vehicles (see Case 

Study: Xstrata Alloys develops leading 

practice collision avoidance system in 

2005 Sustainability Report). 

The challenges that face us, particularly 

in South Africa, remain very demanding. 

Among these are: a long-standing culture 

of an instructional management style 

from supervisors with little opportunity for

Xstrata Alloys operates five underground 

chrome mines in the Bushveld Igneous 

Complex in South Africa. Falls of ground in 

underground operations have been 

identified as one of the principal causes of 

high potential risk incidents and fatalities at 

Xstrata Alloys and are responsible for half of 

recorded fatalities in South Africa mining. 

The elimination of roof falls in underground 

operations is a key element of the 

comprehensive fatality prevention 

programme implemented at Xstrata’s South 

African operations over the past three years. 

‘Dome’ geological structures in the 

Bushveld Complex are not well understood 

and geological anomalies are a major cause 

of falls of ground in mines in this region. 

As a starting point, Xstrata Alloys hosted 

a strategy workshop on falls of ground in 

South Africa and invited eminent South 

African and Australian rock mechanics and 

mine safety specialists to join a range of 

Xstrata Alloys senior and line managers. 

The purpose of the workshop was to 

examine the principal causes of roof falls, 

to determine why these incidents occurred 

more often in South Africa and to 

recommend actions that could be 

implemented to mitigate or eliminate the 

risk of further injuries from these incidents. 

This investigation marked a turning point 

for the South African mining industry, 

where falls of ground have previously been 

accepted as an inevitable consequence of 

the region’s geology. Workshop 

participants addressed two key elements – 

ways to mitigate the immediate risk and 

ways to manage the residual risk. 

During the workshop, a holistic approach 

considered factors such as mine design, 

mine planning, support systems, hazard 

plans, incident response and reporting. 

The workshop findings were critical 

of the traditional South African method 

of ground support and trials of modern 

resin bolts proved to be superior in 

providing an active support system. 

We have adapted ground penetrating 

radar (GPR) from the civil engineering 

industry and developed it for use in 

underground mining to detect anomalies 

in the hanging wall. The GPR technology 

provides an early warning of potential 

hazardous areas. 

Xstrata Alloys also initiated a study through 

the Council for Scientific and Industrial 

Research, to gain a better understanding 

of the origin and formation of the 

Bushveld Igneous Complex – information 

which will benefit the South African 

mining industry as a whole. 

The workshop led to the introduction 

of a trigger action response plan (TARP), 

a system in use in Australian mines. 

The system concentrates on a more 

formalised reporting system and reaction 

to hazards, which relies on escalation of 

decision making. Conditions (triggers) 

for activating TARP were defined at a 

workshop for all levels of management 

through to front-line supervisors. 

A TARP analysis is now part of everyday 

planning in Xstrata Alloys’ mines. TARPs 

have been integrated into induction and 

training programmes, including computer 

simulated interactive training (see case 

study in this chapter) to emphasise 

experiential learning. 

The system was reviewed by an 

independent, external auditor after 

12 months to check on progress against 

targets and to ensure that the system 

maintains integrity. Results showed a 30% 

reduction in uncontrolled falls of ground 

since implementation and the system is 

operating effectively across all Xstrata 

Alloys’ mine sites. 

Xstrata Alloys adopts new approach to falls of ground 


Virtual Training Programme Embraced by Employees 

As the saying goes, there’s no substitute for experience. This is particularly important in the context of workplace safety, where identifying 

potential hazards and taking appropriate action to rectify them are top priorities. 

And while experience may be the hardest teacher, virtual experience allows mistakes to be made and learned from, without the reality 

of injuries and equipment damage. 

As part of an ongoing intensive effort to eliminate fatalities and change safety behaviour across the workforce, Xstrata Alloys rolled out 

an interactive ‘virtual reality’ simulated hazard awareness programme in January 2006 aimed at helping employees and contractors to 

recognise workplace hazards and to address them appropriately. Failure to identify or react properly to a hazard created a simulated 

consequence. The bespoke programme was developed in collaboration with the University of Tshwane and Simulated Training Solutions. 

The programme was initially introduced at the Kroondal, Rietvly, Horizon and Waterval mines in South Africa, which together employ 

approximately 1,283 people and was subsequently introduced across the remaining Xstrata Alloys mines in November. 

Employee and contractor feedback to the programme was both immediate and overwhelmingly positive, with many requesting repeat 

training. This response is attributed to several characteristics of the training programme. For instance, the programme includes a voice-over 

feature available in different languages, which removes potential obstacles created by varying degrees of participant literacy. The 

programme also involves multiple senses; with both hearing and vision engaged, the programme is entertaining as well as educational. 

The simulations are not time-limited, which allows employees to sensitise themselves to workplace hazards at their own pace of learning. 

Since launching the programme, more than half of Xstrata Alloys mining employees have completed the training. The benefits of the 

simulation training, the first of its kind in South Africa, are also being shared through different mining forums within South Africa. Gold, 

platinum and coal miners have visited the Xstrata Alloys training centre to review the programme. 

Feedback from both trainees and supervisors indicates a notable improvement in the ability of employees to identify and react correctly to 

the hazards present in their working environment. While this was simply one safety initiative among many within Xstrata Alloys, it is viewed 

as a positive contributor to the improvement in Xstrata Alloys’ (Mining Division) Total Recordable Injury Frequency Rate, which improved by 

approximately 35% from 2005.


feedback from workers; communications 

challenges arising from generally lower 

levels of literacy; a wide range of different 

languages spoken; and ingrained, 

inaccurate workforce perceptions of 

the primacy of productivity over safety. 

All require a sustained effort over the 

medium to long term before lasting 

improvements will be achieved. These 

challenges are common to all industrial 

companies operating in Southern Africa. 

Nonetheless, almost three years after 

commencing our intensive fatality 

prevention programmes in South Africa, 

we are beginning to see tangible progress 

in how our employees, supervisors and 

management approach safety in the 

workplace. In addition, innovative 

solutions are being implemented to 

overcome the specific challenges we have 

identified to control major hazards and 

build the required competencies in our 

workforce at every level. 

Both of our businesses with operations in 

South Africa (Xstrata Alloys and Xstrata 

Coal) continue to report on their progress 

every six months to the Board HSEC 

Committee. These reports track key 

performance indicators and progress 

against fatality prevention plan objectives 

and have shown clear and rapid 

improvements in all areas since the 

programme’s inception. Significant 

progress has been made in reducing 

serious incidents amongst Xstrata’s 

permanent employees; however 

contractor performance remains less 

consistent and is an area to which we are 

dedicating increased attention and 

resources in 2007. 

In other regions, our fatality prevention 

programmes are also focusing on improved 

contractor management, selection and 

supervision, increased security to protect 

employees and contractors from intruders 

(particularly in the Dominican Republic, 

Tanzania and South Africa) and 

behavioural safety training. 

Specific initiatives with regard to safety 

leadership and training, contractor 

management and behaviour-based safety, 

are outlined below and in the case studies 

included in this section. 

Injury frequency rate performance 

Xstrata reports total recordable injuries 

per million hours worked. This measure 

includes all injuries except first-aid 

treatment, and as such, provides a more 

comprehensive indication of injuries 

sustained in the workplace than lost time 

injuries alone. While the total recordable 

injury frequency rate is recognised in 

many other industries, Xstrata was one of 

the first mining companies to use and 

report this measure. Other large diversified 

mining companies are starting to adopt 

the total recordable injury frequency rate 

(TRIFR) as a key measure, and Xstrata 

is actively participating in ICMM to 

encourage further take-up. We continue 

to report the lost time injury frequency 

rate to provide a basis for comparison 

with our peers. Full definitions are 

provided in the glossary on page 92. 

Our businesses have made significant 

improvements in safety performance in 

the five years since Xstrata plc was 

established. From our baseline in 2002, 

our TRIFR has improved by 61% and the 

lost time injury frequency rate has 

improved by 74%. Year-on-year the 

frequency of total recordable injuries 

improved by 13% to 13.0 per million 

hours worked. 

As part of the integration process, we 

have recalculated total recordable injuries 

at former Falconbridge operations for the 

12 months to 31 December 2006 

according to Xstrata’s and international 

standards, to determine a baseline from 

which to measure improvement. This 

analysis determined a TRIFR of 24.3, 

compared to 13.0 for the Xstrata Group 

over the same time period. Including the 

acquired operations for the full year on a 

pro forma basis increases the Group TRIFR 

to 16.6 per million hours worked. This is 

the baseline from which we aim to make 

further improvements in 2007. Xstrata has 

set an overall 15% improvement target in 

the TRIFR in 2007. 

Mine rescue team training at McArthur River 

mine, Australia 



Total recordable injury frequency rate 

(per million hours worked) 

33.0 

26.5 

18.5 

15.0 

02 03 04 05 

Lost time injury frequency rate 

(per million hours worked) 

12.0 

7.9 

5.3 

4.3 

02 03 04 05 

TRIFR improvement* 

Since 2002 61% 

Since 2005 13% 

13.0 

06* 

14.1 

06 † 

LTIFR improvement* 

Since 2002 74% 

Since 2005 28% 

3.1 

06* 

3.3 

06 † 

*Excluding Falconbridge 

† Including Falconbridge from date of acquisition 

To achieve this, our businesses are 

implementing an intensive safety effort at 

all operations, and in particular to address 

specific areas identified in the site HSEC 

risk reviews of acquired operations. 

These include addressing areas of underinvestment 

in operational integrity and 

ensuring appropriate safety resources, 

training and systems are in place. 

The graphs on this page show TRIFR and 

the lost time injury frequency rate for 

Xstrata on a standalone basis since 2002. 

2006 performance for the Xstrata Group 

including Falconbridge from the date 

of acquisition is also provided. Injury 

frequency rate performance by commodity 

business (for Xstrata excluding Falconbridge) 

is shown in the table below. 

Xstrata Alloys recorded significant 

improvements in safety performance in 

2006, as a result of the intensive major 

hazard management and safety 

improvement programmes under way in 

South Africa since 2004. Xstrata Coal 

Australia reported a higher frequency of 

medical treatment injuries compared to the 

previous year, primarily from contractors 

employed to construct two new coal 

preparation plants. 

Xstrata Zinc reduced total recordable 

injuries by 8% in 2006, but injury rates 

remain above the Group average. This is 

due to fewer employees being able to 

undertake alternate duties following an 

injury, due to union agreements in Spain, 

and the fly-in, fly-out nature of the 

workforce at McArthur River mine in the 

Northern Territory, which results in injured 

workers remaining away from the 

workplace for a prolonged period, compared 

to operations where the workforce lives 

locally. The rapidly declining severity rate 

for Xstrata Zinc (down 62% year-on-year 

excluding the former Falconbridge sites) 

shows the effect of targeted safety 

initiatives and improved injury 

management. It also indicates that a 

large number of minor injuries sustained 

contribute to a higher total recordable 

injury frequency rate for this business. 

Xstrata’s disabling injury severity rate 

improved in 2006 to 399 (including 

Falconbridge) and has more than halved 

since 2002, indicating that fewer serious 

injuries are being sustained. 

Although these achievements are 

an important indicator of safety 

improvements, we recognise that injury 

frequency and severity rates are lagging 

indicators and are not necessarily a 

reliable indication of whether or not major 

hazards are being properly identified and 

managed in our business. 

Leading ‘near miss’ indicators 

Since 2003, Xstrata’s businesses have 

implemented high potential risk incident 

(HPRI) reporting which captures serious 

‘near miss’ incidents. Reporting of high 

potential risk incidents is an important 

leading indicator of safety performance 

and major hazard management, and 

an important learning tool to avoid 

critical incidents or fatalities. Reporting 

of near miss incidents has steadily 

improved across the Group and this 

system was implemented across the 

Falconbridge business during the 

integration process. From September 

2006, all former Falconbridge operations 

are reporting HPRIs in line with Xstrata 

% 

Total recordable injury frequency rate (excluding Falconbridge) improvement 

(per million hours worked) 2006 2005 2004 2003 2002 (deterioration) 

Alloys 8.0 11.5 16.8 15.7 34.6 30% 

Coal 17.1 16.4 16.4 20.0 21.2 (4%) 

Copper 9.7 12.9 24.1 47.3 n/a 25% 

Zinc 22.4 24.5 25.6 58.2 98.1 8% 

Total 13.0 15.0 18.5 26.5 33.0 13% 

% change = 2006 compared to 2005 


Core Hazard Assurance Process 

Xstrata Coal’s New South Wales division 

launched an innovative core hazard 

assurance process in 2006 that acts as a 

tool to educate employees about critical 

risk controls, increase individual 

accountability and provide assurance to 

senior management that effective controls 

are in place. 

The initiative was implemented by Xstrata 

Coal’s New South Wales operations, 

comprising 12 mines, after critical and 

high potential risk incident data from 

around Xstrata’s global operations 

highlighted the need to ensure 

catastrophic risks were being managed 

appropriately on a consistent basis. 

The response was to design a thorough 

system that assures the implementation 

and integrity of risk controls to augment 

existing management systems. 

The first step was to review risks on a siteby-site 

basis to identify catastrophic and 

high risk areas that could potentially lead 

to single or multiple fatalities. These were 

defined as core hazards. A total of 12 

catastrophic and 11 high risk core hazards 

were identified in this process. They 

included events such as strata failure, 

explosion, fire, vehicle and pedestrian 

interaction, an in-rush of water or gas, 

energy isolation and working at height. 

A key component of the system design is 

accountability. Each identified hazard at 

each site is checked by an accountable 

individual, who is responsible for making 

sure the risk controls are being 

implemented correctly. On a regular basis, 

this individual is required to report how 

the controls are being implemented. For 

example, a coal mine ventilation shaft 

with an underground gas detector 

requires testing and calibration on a 

regular basis. As a key risk control 

measure, the process owner is 

accountable for confirming that all tests 

occurred as planned and the monitoring 

and alarm system is fully functional. 

The reporting system elevates through the 

Operations Manager, General Manager, 

Chief Operating Officer up to the 

commodity business unit CEO. The 

reporting process functions ‘by exception’, 

meaning only matters of issue are 

reported to a higher level of management. 

In this manner, managers are provided a 

level of assurance of the status of controls 

to prevent potentially high consequence 

events and are better informed on issues 

relating to failures of controls. 

An auditing process complements the 

assurance system, with each risk control 

audited for both quality and effectiveness. 

The audit process occurs on a quarterly 

basis and rotates through the key hazard 

controls to ensure each one is reviewed at 

least every three years. 

The system has been in place since 

February 2006, and a review of the 

first year’s activities included a four-day 

workshop with managers and 

representatives of operating mines. Their 

feedback is being incorporated into the 

system to achieve further improvements 

and to streamline the process. 

Mick Buffier, Chief Operating Officer of 

Xstrata Coal NSW, said: “While there were 

initial concerns about the additional 

workload created by the assurance 

process, sites and management are now 

extremely supportive. The assurance 

process is truly delivering a safer 

workplace and at the same time providing 

reassurance that the controls that are 

supposed to be in place are in fact in 

place and effective.” 

Critical controls are currently being 

developed for each of the seven 

Core Risks identified as common to 

all Xstrata Coal divisions, to allow 

consistent reporting on a quarterly 

basis and provide assurance to the 

Xstrata Coal HSEC Committee. 



Injuries by type 

2006 excluding Falconbridge 

Lost time injuries 

(LTI) 25% 

Medical treatment 

injuries (MTI) 34% 

Disabling injury severity rate 

842 

676 

613 

575 

Restricted 

work injuries 

(RWI) 41% 

355 

399 

02 03 04 05 06 † 06* 

*Excluding Falconbridge 

† Including Falconbridge from date of acquisition 

Occupational Hygienist Amanda McHugh 

fits personal dust and noise monitoring 

equipment to George Gabbe at Mount 

Isa Mines, Australia 

definitions and reporting requirements. 

In 2006, 326 high potential risk incidents 

were reported (including acquired 

operations), compared to 226 in the 

previous year. 

HPRIs are reported on a monthly basis 

to the Group Executive Committee and 

quarterly to the Board and are investigated 

by a team of senior operational and safety 

personnel to determine underlying causes 

and develop preventative action plans. This 

forms an integral part of safety training, 

improvements to safety procedures and 

strategies to address the management of 

major hazards. 

In 2006, the leading cause of all high 

potential risk incidents remained vehicle 

incidents, however the proportion of total 

incidents declined from 25% to 22%, 

following intensive programmes to address 

this major cause of ‘near misses’ and 

injuries. Further initiatives are under way 

to address additional principal causes of 

high potential risk incidents, shown in the 

graph on page 37. 

Safety leadership and training 

One of the most significant early measures 

taken to tackle safety challenges in South 

Africa was the transfer of senior safety 

personnel from our high-performance 

Australian operations to South Africa. 

Remuneration was also adjusted, with 

40% to 80% of bonus awards dependent 

on HSEC or safety performance criteria, 

linked to a balanced scorecard, for both 

South African businesses. This process was 

extended to Xstrata Zinc’s Spanish 

operations in 2006, where European 

personnel were trained in the recognised 

Positive Attitude Safety System (PASS), a 

communication tool to improve the flow 

of safety information and encourage 

safety improvement at Australian 

operations. This recognises the success of 

this programme in Argentina and Australia 

and that Spain is experiencing similar 

challenges to Australia related to older 

average ages across the workforce. 

Xstrata Coal’s first-of-its-kind 28 day 

supervisor training programme was 

devised by Xstrata Coal South Africa 

together with external experts and 

consultants, to provide a tailored, practical 

and relevant training programme for mine 

supervisors. The programme uses a range 

of learning techniques and modules, 

including practical exercises, role plays 

and video technology, to enhance safety 

knowledge, attitudes and understanding 

and leadership skills amongst this critical 

component of the workforce. An overall 

aim of the programme is to enable 

supervisors to gain a better understanding 

of leadership techniques, and to 

encourage a more consultative and 

engaging management style in the 

workplace, which will aid the early 

identification and resolution of safety 

hazards. 

Approximately 80% of Xstrata Coal 

supervisors and more than 50 Xstrata 

Alloys supervisors, including contractors 

and potential future supervisors, have 

undergone this innovative training course, 

which incorporates emotional intelligence, 

people and team management and 

conceptual, experiential, concrete and 

reflective learning. Monthly compliance 

audits are undertaken following the 

training course, with results to date 

showing that supervisors attain an 

average score of over 80% following 

completion of the training course, 

compared with an average of 40% 

before training.

Critical and high potential risk incidents by mechanism 

including Falconbridge from September 2006 

Vehicle incident 

(single or multiple vehicles) 

Struck by falling 

or projected object 

Fire/Explosion 

Struck by/trapped in 

moving machinery 

Struck by 

fall of ground 

Exposure to 

electrical energy 

Security event 

(physical harm) 

Exposure to unstable 

atmosphere, chemical or fume 

Contact with/exposure to 

extreme temperature 

Fall from height 

2% 

2% 

2% 

2% 

3% 

2% 

Behaviour based safety programmes are 

implemented at every Xstrata managed 

operation. These programmes aim to 

reinforce positive safety behaviour, as well 

as addressing negative or non-compliant 

behaviour. In South Africa, Xstrata’s 

operations are using programmes adapted 

from specific safety programmes developed 

for use in deep level gold mining, which 

are tailored to specific requirements for 

South African operations. 

Contractor management 

An analysis of safety performance data 

shows that contractor safety performance 

in general has lagged that of permanent 

Xstrata employees. Xstrata’s HSEC 

Management Standard 11 requires the 

systematic selection, engagement and 

management of contractors, suppliers 

and partners. All suppliers and contractor 

companies are assessed against specific 

HSEC criteria. However, we have found 

that the relevant audits and safety 

certification may not provide sufficient 

confidence about specific personnel or 

relevance to Xstrata’s operations. In 2007, 

Xstrata’s businesses are focusing on 

3% 

3% 

4% 

5% 

7% 

7% 

10% 

10% 

10% 

11% 

11% 

11% 

11% 

12% 13% 

12% 

ensuring greater influence over contractor 

safety training and compliance, together 

with additional supervision and on-site 

training for contract personnel, particularly 

those that may only be on site for several 

days or less. 

The requirement for enhanced contractor 

management has been identified as a 

particular focus for our Spanish operations 

(Xstrata Zinc), where a dedicated Xstrata 

safety supervisor has been appointed for 

all contract work. 

19% 

19% 

19% 

22% 

25% 

2004 

2005 2006 

31% 


Workplace and our people | Occupational Health 


We are committed to achieving our aim of eliminating work-related illnesses and injuries from our business, 

an integral part of Xstrata’s Group-wide HSEC policy. We also work to protect and positively enhance 

the health of employees and contractors at our operations through holistic ‘wellbeing’, stop smoking, 

cholesterol, diabetes and weight management programmes, counselling, stress management and substance 

abuse support programmes. Finally, we work with communities associated with our operations and other 

stakeholders to support community health initiatives and programmes. Our standards ensure all operations 

comply with ILO conventions on health and safety. 

Every operation is required to maintain 

an appropriate occupational health 

management system and plan, including 

the identification of health hazards, 

assessment of exposure with reference 

to internationally recognised monitoring 

standards, controls to eliminate or minimise 

exposure to hazards and provision of 

effective protective equipment. Health 

and safety systems and performance are 

regularly and independently audited 

through the Xstrata HSEC Assurance 

Programme, to measure performance 

against the expectations set out in Xstrata’s 

HSEC Management Standard 9: Health 

and Occupational Hygiene. 

Occupational illness cases 

69 

Occupational illness cases 

(% of total workforce) 

0.6 

82 

0.3 

36 

0.2 

37 

0.2 

31 

02 03 04 05 06* 06** 

0.1 0.1 

02 03 04 05 06* 06** 

*Excluding acquired operations 

**Including acquired operations 


58 

Key Challenges 

Our key workplace health issues and the 

primary causes of new occupational 

illnesses are noise-induced hearing loss, 

from working with or near noisy vehicles 

and industrial machinery, which accounts 

for over half of the new occupational 

illnesses reported in 2006. Musculoskeletal 

injuries and respiratory diseases 

related to occupational asthma from dust 

and sensitisation to vanadium are the next 

most common cause of new illnesses. 

Typically, these illnesses are chronic but 

reversible. Other occupational health risks 

at Xstrata’s operations include exposure to 

lead, hexavalent chromium, beryllium and 

nickel, heat stress and fatigue. 

The most pressing health challenge facing 

the Group is the prevalence and impact of 

HIV and AIDS on our workforce and in 

local communities, in particular in South 

Africa. Other higher risk areas for HIV and 

AIDS in which Xstrata operates include the 

Dominican Republic and Tanzania. 

Noise-induced hearing loss 

The elimination of noise-induced hearing 

loss is a key priority for all operations. 

We mitigate this risk first by monitoring 

employees’ exposure and hearing and by 

reducing noise at the source wherever 

possible to levels below recommended 

international standards. Hearing 

conservation programmes, monitoring 

and training are in place across managed 

operations and suitable personal 

protective equipment (PPE) is required 

wherever noise levels may exceed 

acceptable levels. ‘Buy quiet’ programmes 

have been implemented for new and 

upgraded machinery, with specific criteria 

to limit industrial noise. We also 

implement design modifications, 

soundproofing and exclusion zones where 

possible to isolate employees from sources 

of noise. Underground mining operations 

present a particular risk, as noise is 

contained in confined spaces. Sound 

mapping and regular risk assessments are 

undertaken to progressively improve 

protection from noise in the workplace. 

Noise-induced hearing loss typically 

manifests over time. As a result, the 

majority of noise-induced hearing loss 

cases reported in 2006 were from longstanding 

employees of older mines. Noise 

mitigation strategies in place at these 

operations in recent years are expected to 

result in a decline in the number of new 

cases of noise-induced hearing loss 

reported in future years. 

Musculo-skeletal conditions 

The incidence of degenerative musculoskeletal 

injuries is often elevated amongst 

workforces with a higher average age in 

long-standing operations, where historic 

working practices and inferior ergonomic 

design may have caused historical 

problems that deteriorate with age. 

The majority of new cases in 2006 were 

reported at former Falconbridge 

operations in Canada, with further cases 

at Xstrata Coal, Australia and one case 

at a Spanish zinc operation. Measures 

implemented at every managed operation 

to eliminate musculo-skeletal conditions 

include risk and functional assessments, 

developing engineering solutions 

wherever possible to minimise or eliminate 

manual handling, job rotation and positive 

encouragement to improve employees’

general fitness and ongoing improvements 

to ergonomic design and working 

practices. Xstrata’s Australian operations 

also support academic research into 

degenerative musculo-skeletal conditions 

and manual handling risks. 

Vanadium 

The principal cause of new respiratory 

illnesses reported in 2006 was from 

sensitisation to vanadium. Xstrata 

operates one fully integrated vanadium 

operation, Rhovan, in South Africa. A 

small percentage of the population is 

susceptible to developing occupational 

asthma from prolonged exposure to 

vanadium pentoxide dust. All potential 

employees and contractors are screened 

to determine any general sensitivity before 

employment. Biological and air monitoring 

is undertaken at the operation, with 

high-risk employees tested every two 

or three months to identify elevated 

vanadium levels in urine. Rhovan has 

implemented a number of wide-ranging 

initiatives to improve air quality and 

prevent respiratory problems in the 

workplace. In 2006, these included: 

■ the implementation of a major hazard 

management plan, to enhance 

existing controls to prevent 

occupational and environmental 

exposure to vanadium pentoxide, 

and improve training about the risks 

and prevention of exposure; 

■ a dust suppression system was 

implemented at the slimes dam; 

■ industrial cleaning of roads in and 

around the plant area was enhanced; 

and 

■ additional full-time occupational 

health and environmental specialists 

were employed at the site to drive 

further improvements. 

These programmes resulted in average 

vanadium levels in the workplace 

declining by a further 37% compared 

to 2005 (from 0.019mg to 0.012mg 

of vanadium pentoxide per m 3). This 

represents a decrease of over 60% from 

2004 levels. 

Lead 

Xstrata Zinc operates zinc-lead mines at 

McArthur River Mine (MRM) and Mount Isa 

Mines in Australia, a lead concentrator at 

MRM, a lead smelter and concentrator at 

Mount Isa and a lead refinery in the UK. 

Following the acquisition of Falconbridge, 

Xstrata also manages the Brunswick zinclead 

mine and lead smelter in New 

Brunswick, Canada. Exposure to lead has a 

long history of adverse health effects. 

Comprehensive biological and workplace 

monitoring programmes are in place at 

these operations for all potentially exposed 

employees and are conducted in 

accordance with international occupational 

hygiene monitoring standards. This 

includes blood lead testing of employees, 

preventative work practices, education, 

and the use of various technologies and 

equipment to reduce emissions and 

exposure to lead. For example: 

■ strict clean in/clean out policy for all 

employees and visitors on site; 

■ the compulsory wearing of respirators 

in certain areas; 

■ hygiene programmes including dyetesting 

to ensure hands are being 

cleaned correctly; 

■ all employees and contractors 

Process Operator Damien Flack at Northfleet 

lead refinery, UK 


Workplace and our people | Occupational Health 

Diabetes community testing funded by Mount 

Isa Mines, Australia 

Laboratory technician at Altonorte copper 

smelter, Chile 

Xstrata Zinc 

Site wide average blood lead levels (µg/dl) 

20 

15 

10 

5 

0 

Northfleet 

Brunswick 

Mt Isa 

McArthur River 

04 05 06 


participate in blood lead monitoring 

programmes as a condition of 

employment; 

■ internal procedures, employee 

committees, educational materials and 

training are in place to reduce lead 

exposure progressively; and 

■ venipuncture (needle drawn blood) is 

used to take samples, however an 

alternative method of capillary 

sampling is being studied at Mount Isa 

Mines. 

Employees with blood lead concentration 

of 40 micrograms per decilitre (40µg/dL) 

or greater are removed from the 

workplace until concentrations are below 

30µg/dL. At Northfleet (UK) and 

Brunswick smelter (Canada) the removal 

limit has been reduced to 35µg/dL. In the 

Mount Isa lead smelter (Australia) the 

removal limit is 45µg/dL or three 

consecutive results of 40µg/dL or greater. 

These levels are within the Australian 

National Standard for the Control of 

Inorganic Lead at Work (NOHSC:1012), 

the Australian National Code of Practice 

for the Control of Safe Use of Inorganic 

Lead at Work (NOHSC:2015) and the UK 

Control of Lead at Work regulations. 

Lead-in-air monitoring is also carried out 

to determine respirable lead levels in local 

communities and at site boundaries. At 

Mount Isa, where the local community 

lives in close proximity to Xstrata’s 

operations, free community blood lead 

monitoring programmes have been in 

place for several years (see case study: 

Community Blood Lead at Mount Isa). 

The blood lead removal limit has been 

progressively reduced at Northfleet to 

35µg/dL with further reductions to 

30µg/dL targeted for 2007. 

Average blood lead levels for Xstrata Zinc’s 

lead operations are shown in the graph 

on this page. 

Beryllium 

Beryllium is a metal used in some copper, 

aluminum and magnesium alloys. Metalbearing 

recyclable products that may 

contain low levels of beryllium are 

received at recycling operations in Canada 

and the US, formerly part of Falconbridge, 

specifically at Horne Smelter, Kidd 

Metallurgical, CCR and some Noranda 

Recycling sites and, several years ago, at 

the now decommissioned Gaspé Smelter. 

According to the US Occupational Safety 

and Health Administration, approximately 

1-15% of people occupationally exposed 

to beryllium in air become sensitised 

(allergic) to beryllium and may 

subsequently develop chronic beryllium 

disease. Recognising that beryllium can 

cause serious health effects in employees 

even at low exposure levels, the former 

Falconbridge sites implemented a 

comprehensive beryllium disease 

prevention programme. The programme 

includes ongoing medical screening and

the introduction of engineering controls to 

reduce exposures to beryllium well below 

regulatory standards. No new cases of 

beryllium sensitisation were reported 

in 2006. 

Hexavalent chromium 

During the production process for 

ferrochrome, very low concentrations of 

hexavalent chromium, a known 

carcinogen, may be produced under 

certain circumstances. Xstrata Alloys 

operates ferrochrome smelters at five 

locations and has funded research to 

improve the accuracy of sampling for this 

unstable compound. In 2006 the 

University of Witwatersrand completed 

the first phase of its research, identifying 

the most accurate method for sampling. 

In 2007 this method will be refined and 

tested for implementation. Non-invasive 

biological monitoring for hexavalent 

chromium is undertaken for all exposed 

employees. In 2006, one employee tested 

with elevated chrome levels. 

Nickel 

Some research suggests that soluble nickel 

may act as a carcinogen in humans, and 

the cancer risk is significantly increased 

when combined with smoking. Since the 

Hybinette Process was discontinued in 

1981, exposure levels at the Nikkelverk 

refinery in Norway have dramatically 

reduced, with average levels well below 

50µg/m 3 (below OHSAS international 

standards). Where the risk of higher 

exposure levels exists, respiratory protection 

is mandatory. Nikkelverk runs early 

detection monitoring for cancer and has 

adopted a policy of not hiring smokers. 

Malaria 

The Kabanga nickel project in Tanzania is 

located in a malarial region. The project 

introduced an anti-malarial education 

and site control programme in 2006. Initial 

results suggest a reduction in 

the frequency of site malaria cases. 

We are investigating an expansion of the 

programme into the local community to 

complement the workplace programme and 

help to make sustainable reductions to the 

incidence of malaria amongst employees, 

their families and community members. 

Sinking the mineshafts at the Nickel Rim South 

project in Sudbury, Canada 


Community health initiatives to manage lead at Mount Isa 

Lead, copper and zinc mining operations 

have been active in the Mount Isa region in 

north Queensland, Australia since 1923. 

Xstrata assumed control of Mount Isa 

Mines in 2003. Prior to 1990, historic 

practices, such as uncontrolled releases of 

stormwater from mining areas, donations 

of mine-site fill material for use in the 

community and a leak from the process 

water dam caused some areas of lead 

contamination in Mount Isa. 

In the early 1990s, Mount Isa Mines, 

the Queensland Government CHEM 

unit and Mount Isa City Council (MICC) 

co-operated in a joint campaign to 

remediate community areas with lead 

contamination. Remediated areas were 

returned to a state suitable for public use 

and handed over to the MICC. While these 

historic practices have long since been 

discontinued, the town of Mount Isa lies 

within a highly mineralised area, with 

outcrops of lead-based minerals and 

naturally occurring lead in local soils, 

and is in close proximity to lead mining 

and smelting operations. Community lead 

exposure therefore remains a potential risk. 

To improve community awareness about 

the risks of lead exposure and how to 

minimise these, Xstrata is working together 

with regional authorities on a number of 

initiatives. 

Mount Isa Mines has provided a voluntary 

free blood lead testing service for Mount 

Isa residents for a number of years, funded 

by Xstrata. Confidential blood lead test 

results can be discussed with a general 

practitioner, who provides advice on how 

to minimise lead exposure. 

In response to concerns raised in the media 

about whether children’s blood lead levels 

were being monitored closely enough, 

the Queensland state health organisation 

(Queensland Health) commenced a 

targeted campaign in September 2006, 

supported by Xstrata, to test the blood 

lead levels of 400 Mount Isa children aged 

one to four. This age group is considered 

most at risk from prolonged exposure to 

high blood lead levels. By the end of 

March 2007, 251 children had been 

tested. No children tested with blood 

lead levels requiring clinical intervention 

(in excess of 25µg/dl), and 23 children 

tested had blood lead levels within 

Queensland Health’s ‘marginally elevated’ 

level (above 10µg/dl). 

Xstrata continues to work closely with 

MICC, the Environmental Protection 

Agency (EPA) and Queensland Health to 

review potential community lead exposure 

risks and to provide information through a 

comprehensive blood lead awareness and 

education campaign. We are also trialling 

an alternative finger prick method of 

taking blood lead samples, which, if 

effective, may encourage more parents 

to take up regular testing of their children 

in the future. 

A greenbelt buffer zone of woodland 

has been established between Mount Isa 

Mines operations and the community. 

The greenbelt continues to be developed 

with an ongoing annual budget of 

A$500,000 for rehabilitation. 

Levels of respirable lead, cadmium and 

arsenic in the air are monitored by five 

high-volume samplers scattered throughout 

the community. Average lead levels are 

below 0.5 micrograms per cubic metre 

(µg/m 3) and consistently well below the EPA 

limit of 1.5µg/m 3. The results of monitoring 

programmes are reported to the EPA . 

Mount Isa Mines has also commissioned an 

independent land, air and water emissions 

study. This ‘Whole of Emissions Study’ will 

assess the major sources of non-natural 

forms of lead in the Mount Isa community 

and potential risks. The study will be 

conducted by recognised toxicologist 

Associate Professor Barry Noller, through 

the Centre for Mined Land Rehabilitation 

at the Sustainable Minerals Institute, 

University of Queensland. 

The study will be completed in a 

consultative process with regulators and 

the MICC. We will work with these groups 

to address the study’s recommendations. 

Initial results are expected in mid-2007 and 

an executive summary of the final results 

and recommendations will subsequently 

be released to regulators, the community 

and media.

Workplace and our people | HIV and AIDS 

Our approach to HIV and AIDS recognises that the disease, its contributing factors and impacts require 

an integrated, sustainable approach, incorporating workplace and community initiatives and addressing 

contributing factors in addition to direct testing and treatment services. We employ around 11,500 people 

in South Africa and estimate that approximately 20% of our South African workforce is HIV positive. 

Following the acquisition of Falconbridge, we also operate in Tanzania and Dominican Republic, where 

HIV prevalence rates are elevated. 

The business benefits of direct 

intervention include lower costs due to 

reduced absenteeism, lower recruitment 

and training costs, fewer families receiving 

death benefits, improved workplace 

morale and safety performance, and 

greater productivity. The principal business 

benefit of our community intervention 

programmes is to ensure the success of 

our workplace programmes can be 

sustained, resulting in no or very low 

levels of new infections, and HIV positive 

employees accessing treatment, remaining 

well, fit and able to participate fully in the 

workplace. Other significant benefits to 

Xstrata include improved community 

support and governmental relationships 

and an enhanced corporate reputation, 

closer, more co-operative relationships 

with unions and employees, lower 

employee turnover rates and the ability to 

attract talented individuals within our 

South African operations in an increasingly 

competitive environment. 

Our approach to HIV and AIDS aims to: 

■ address contributing factors to the 

spread of the disease, both those 

associated with the mining industry 

and wider community issues; 

■ encourage 100% of employees, 

contractors and their partners to take 

up voluntary testing for HIV; 

■ encourage 100% of HIV positive 

employees and family members to 

take up free treatment; 

■ empower people to take individual 

responsibility for their health and 

eliminate the stigma associated with 

HIV and AIDS; 

■ engage traditional healers, peer 

educators and community outreach 

champions to promote safe sex, 

voluntary testing and treatment; 

■ support initiatives to address the 

impacts of HIV and AIDS on 

communities; and 

■ work together with government, 

NGOs, specialists and other companies 

to broaden our impact area as far as 

possible and ensure long-term 

sustainability for our programmes. 

Workplace initiatives 

Voluntary counselling, testing and 

treatment 

Our workplace programmes in South 

Africa began in 2004 with prevalence, 

knowledge, attitudes and practices 

surveys. A cost-benefit analysis was 

undertaken, which estimated that the cost 

of ‘doing nothing’ to address HIV and 

AIDS amongst our workforce would add 

approximately 3%–6% to the annual 

wage bill. This analysis supported the 

business case for rapid intervention and 

voluntary counselling, testing and 

treatment (VCT) programmes were rolled 

out shortly afterwards. VCT programmes 

are run by an external partner, ReAction!, 

to ensure employee confidentiality and 

anonymity and encourage take-up. VCT is 

also provided to employees’ partners and 

family members free of charge, and to the 

community, through our public-private 

partnership and the Breyten health clinic 

(see below). 

An important aspect of the workplace 

programmes is the HIV/AIDS steering 

committee established at both Xstrata 

Alloys and Xstrata Coal. These committees 

bring together union representatives, 

employees, senior managers, health 

professionals and consultants, to consult 

on and manage the roll-out of workplace 

initiatives. These committees have had an 

added benefit of fostering improved 

labour relations at the majority of 

operations and an increased level of trust 

amongst workers and management. 

Xstrata Coal and Xstrata Alloys have also 

established operational AIDS committees, 

led by the General Manager, which meet 

on a monthly basis and review take up of 

VCT and other indicators to determine 

what additional action needs to be taken. 

Xstrata Coal senior management 

participate in the VCT programme, to 

demonstrate visible leadership and 

support for the programme. HIV and AIDS 

intervention has been introduced as a key 

performance indicator for site managers. 

Indicators measure the percentage of the 

workforce participating in health 

interviews and offered testing, the 

effectiveness of HIV and AIDS committees 

in place at sites and the effectiveness and 

frequency of training for peer educators. 

Programmes are regularly reviewed and 

evaluated to enable ongoing 

improvements to reach our targets. 

Wellness Champions, comprising 

volunteers from the workforce, have been 

trained at Xstrata’s operations to 

encourage and support employees to take 

up voluntary counselling, testing and 

treatment and to break down the stigma 

associated with HIV on a formal and 

informal basis. Bi-monthly training is being 

implemented for Wellness Champions on 

general wellbeing, health and HIV related 

subjects. The ratio of Wellness Champions 

to employees is approximately 1:80. 

In 2006, Xstrata Coal’s workplace 

voluntary counselling, testing and 

treatment programme moved to a 

continuous phase, introducing compulsory 

‘health interviews’ for every employee 


Workplace and our people | HIV and AIDS 

Results of VCT at Xstrata Coal South Africa in 2006 

■ 100% of employees and contractors attended health interviews 

■ 95% of employees and contractors know their HIV status by the end of 2006 

(up from 78% at the end of 2005) 

■ Around 62% of HIV positive employees are registered into the support programme, 

through which treatment and care is provided free of charge as appropriate 

■ Serial monitoring has shown a very low rate of new infections, of just 0.3%. 

Only one employee who tested negative in the initial phase tested positive in the 

continuous phase of VCT in 2006 

and contractor on a regular basis. The 

interview covers a range of health issues, 

and aims to ensure that each employee 

and contractor has the opportunity to 

undergo voluntary HIV testing. Although 

attendance at the health interview is 

compulsory, HIV testing remains voluntary 

and confidential. 

The Xstrata Alloys programme is using 

lessons learned from the Xstrata Coal 

programme to refine and improve our 

approach. Currently, around 20% of 

Xstrata Alloys employees have participated 

in recent voluntary testing programmes 

with a participation rate of 80% targeted 

for the end of 2007. 

For Xstrata Coal, the focus for 2007 is to 

continue the workplace VCT programme 

to achieve 100% of employees knowing 

their status, 0% new infections, improve 

the proportion of HIV positive employees 

enrolled in the support programme and to 

improve TB intervention. 

Tackling TB 

Tuberculosis (TB) represents a major 

cause of death amongst HIV positive 

people in sub-Saharan Africa, and 

communities are often impacted by 

a pandemic of HIV and TB infections. 

A detailed TB protocol is being developed 

for Xstrata’s South African operations 

and will be rolled out in 2007. In addition, 

INH prophylaxis (preventative treatment) 

will be provided to all employees who test 

HIV positive, and proactive health action 

campaigns will seek to further control 

the spread of TB amongst employees 

and in the community. 


Eliminating single sex hostels 

The accommodation of mineworkers in 

single sex hostels was identified as a causal 

factor in a number of social problems, 

including the spread of HIV 

and AIDS. To address this, Xstrata has 

implemented a programme, now in its 

fourth year, to eliminate hostels and 

encourage employees to rent or buy their 

own homes, living together with their 

families in established towns. The 

programme has resulted in the elimination 

of all but one hostel, which houses 

migrant workers. Over 95% of employees 

have taken up the funding made available 

to them to own or rent family homes. 

Xstrata has supported the establishment of 

several small enterprises, run by 

mineworkers’ family members, to assist 

families to establish themselves in new 

locations and reduce dependency on our 

operations. These include a sewing 

business providing work clothing for a 

number of local businesses, a cleaning 

services business and a catering company. 

Ongoing education 

and information 

Xstrata’s operations continue to run poster 

campaigns, site-level education seminars 

and briefings about HIV and AIDS, 

treatment and prevention. In addition, each 

site provides free condoms and regular 

training and technical support is provided 

for site management and peer educators. 

Xstrata Nickel’s Falcondo operation in the 

Dominican Republic supports community 

health programmes through the Falcondo 

Foundation. In 2007, Falcondo is 

implementing HIV and AIDS training 

programmes, together with interfamilial 

violence and drug and alcohol abuse 

prevention programmes for all employees 

and contractors. 

Community initiatives 

We recognise that to be sustainable and 

truly effective, our workplace programmes 

need to extend to the communities in 

which our employees and their families 

live. In addition to direct testing and 

treatment programmes, our initiatives aim 

to address contributing factors such as 

poor nutrition, social and economic 

deprivation and limited access to 

healthcare, which increase vulnerability to 

HIV and TB infections. Wherever possible, 

we find ways of creating synergies 

between our projects and our workplace 

programmes. As a result, we are starting to 

witness a powerful transformation in how 

HIV/AIDS and TB is seen and spoken about 

by the broader community – both in the 

workplace and where people live. Our 

community interventions therefore address 

both the short-term urgent needs, such as 

access to basic health services and HIV 

treatment, as well as longer-term strategies 

to strengthen community resilience. 

Access to treatment 

In 2005, we opened a community clinic in 

Breyten, a remote area with little access to 

healthcare services. A public-private 

partnership was established to manage the 

uBuhle Bempilo (beauty of life) clinic, 

involving Xstrata, Re-Action! and Aurum 

Health (NGO), and received funding from 

President Bush’s Emergency Plan for AIDS 

Relief (PEPFAR) to extend this forerunner 

project into other areas. In its first year, the 

clinic has provided life-saving treatment 

and care to more than 400 community 

members and attendance is increasing 

from the local community and farther 

afield. The clinic remains the only point of 

access for anti-retroviral treatment in the 

rural town of Breyten/Kwa Zanele and 

surrounding area. Following its success the 

programme model will be duplicated in the 

Witbank region in 2007–08. 

Outreach programme 

We have extended the treatment and care

provided by the uBuhle Bempilo (the 

Beauty of Life) clinic through a door-todoor 

community outreach programme 

with our implementing partner, 

Re-Action!. Community-based Wellness 

Champions, Community Outreach 

Workers, Treatment Counsellors, and 

programme coordinators have been 

trained and are supported to visit 

community members at home on a 

regular basis. We currently reach more 

than 100 homes through this programme. 

Traditional Healers 

Xstrata has engaged with traditional 

healers in the Breyten region, to extend 

our reach in the community. Traditional 

healers play a vital role in local 

communities and we are integrating this 

influential and trusted group into the 

healthcare services we offer to the 

community. Our work with traditional 

healers, lay health workers and other 

members of society aims to facilitate the 

acceptance of conventional medicine, 

testing and treatment and to ensure a coordinated, 

complementary approach, 

encouraging people to test and where 

necessary take up treatment at the subdistrict 

level. 

Enterprise and social 

development projects 

We invest in inter-linked health, social and 

food security projects and are working 

towards sustainable livelihoods through 

supporting skills development and income 

generation activities. These projects 

include sustainable farming, adult basic 

education, vocational skills development, 

orphan care centres, support and 

educational materials for schools and 

provision of community health workers. 

Key programmes are outlined in the social 

responsibility chapter. 

One issue directly associated with the 

impact of HIV and AIDS is the plight of 

children who lose their parents to AIDS. 

For several years, Xstrata has provided 

direct support for these children in 

partnership with the Department of Social 

Welfare and the Rotary Club, through 

three specialist centres in South Africa in 

local communities: Middelburg Care 

Village, Ratanang Care Centre 1 and 

Ratanang Care Centre 2. These centres 

accommodate more than 220 orphans and 

provide daycare facilities for 40 disabled 

children. 

Leadership and Advocacy 

Xstrata is a member of the Global Business 

Coalition (GBC), the lead organisation for 

the business response to HIV/AIDS, and in 

early 2006 was awarded the GBC Award 

Traditional healers at the Xstrata Coal 

sponsored Breyten community HIV/AIDS clinic 

for Excellence for Voluntary Counselling 

and Testing, in recognition of the success 

and innovation of our workplace 

programmes. 

Xstrata Coal is a voting member of the 

Steering Committee of the HIV/AIDS 

Powerbelt Project. The project is a 

collaborative initiative established by 

Xstrata, Anglo Coal, Ingwe, Sasol and 

various governmental departments 

including the Department of Mines and 

Energy, Department of Health, Council for 

Scientific and Industrial Research to 

advocate action by businesses in the 

workplace and in the community in 

South Africa. 

Public-private partnership with Mpumulanga health authorities 

A very significant step was taken in March 2007, when Xstrata Coal signed a memorandum of understanding to create a first-of-its-kind 

public-private partnership with the provincial Mpumulanga health authorities, PEPFAR, NGOs and other stakeholders. Through this 

partnership, our forerunner Breyten project will be extended to other sub-districts of the province, enabling a number of public sector 

primary care clinics to expand voluntary testing, counselling, HIV and TB-related prevention programmes, ART and other treatment and 

care. Xstrata’s core competency in human resource and project management will support the recruitment and retention of health 

workers in the province, and we will invest in leadership and management capacity-building in the public sector. The future aim is to 

liaise with other companies operating in the region and encourage them to join the public-private partnership. The programme works to 

capacitate existing Government Primary Health Care clinics to enable them to register as anti-retroviral treatment and voluntary testing 

centres. Our programme aligns with National Government Policy on HIV and AIDS, helping to provide universal access to testing and 

treatment, and was developed in consultation with the regional authorities to align with public sector policies and plans. 


Workplace and our people | Employees 

Our approach and policy 

Xstrata’s commitment to equality and non-discriminatory recruitment and employment practices, together 

with our support for the United Nations Universal Declaration of Human Rights and the ILO Declaration on 

Fundamental Principles and Rights at Work, are set out in our Statement of Business Principles. It is our 

policy to communicate honestly with employees and encourage consultation between employees and 

management. No form of workplace discrimination is tolerated. 

Employees and contractors 

by region 

Europe 6% 

South 

America 16% 

North 

America 20% 

Caribbean 3% 

Employees and contractors 

by commodity business 

Zinc lead 15% 

Nickel 5% 

Copper 21% 


Africa 33% 

Australasia 22% 

Alloys 27% 

Coal 32% 

Xstrata employs approximately 43,000 

people, comprising approximately 27,000 

permanent employees and 16,000 

contractors. Following the acquisition of 

Falconbridge, approximately 20% of 

Xstrata’s workforce is based in North 

America (predominantly Canada), with 

16% in South America, compared to 6% 

in the Americas as a whole in 2005. 

Australia and South Africa remain 

important regions for Xstrata’s employees 

and operations. 

Labour relations and union 

representation 

Within Xstrata there are examples of 

various workplace relations models, 

including individual agreements and 

collective bargaining agreements, 

reflecting the circumstances of any given 

site, individual choice and Xstrata’s 

devolved management structure. All 

employees are free to join a union of their 

choice and to be represented collectively. 

Commodity business Country 

Approximate union 

membership (% of workforce) 

Xstrata Alloys South Africa 60% 

Xstrata Coal Australia Unavailable* 

South Africa 73% 

Xstrata Copper Australia Unavailable* 

North America 78% 

Chile 84% 

Peru 82% 

Argentina 4% 

Xstrata Nickel Americas 69% 

Norway 88% 

Xstrata Zinc Australia Unavailable* 


Europe 57% 

*The collection of union membership statistics in Australia is prevented under privacy laws. 

Labour relations are a fundamental 

responsibility of operational management. 

We always seek to have a direct 

relationship between our employees and 

line management founded on quality 

leadership, effective communication, 

mutual respect and trust. We strive to 

ensure and believe that all of the Group’s 

operations have, in general, good relations 

with their employees and unions. 

Xstrata’s workforce is predominantly 

unionised and 70% of permanent 

employees are represented by collective 

workplace agreements. Estimations of 

union membership by commodity business 

and region are as follows: 

We consult with employees in advance 

of any significant operational change. 

Minimum notice periods vary across the 

Group and range from four shifts in some 

Xstrata Copper operations, to six months 

in some Xstrata Alloys operations. Notice 

periods are generally specified in collective 

agreements. 

Non-discrimination 

Xstrata’s business principles state that we 

do not tolerate any form of workplace 

discrimination, harassment or physical 

assault. In 2006, 12 incidents of 

discrimination were reported, reviewed 

and resolved. None of these incidents 

are subject to further action. 

Management and responsibility 

In 2006, Xstrata appointed a Group 

General Manager, Human Resources 

who reports to the Group CEO. The 

GM Human Resources is responsible for 

the administration of group policy on 

remuneration, performance appraisal, 

career development and succession

planning, recruitment and expatriate 

management and for the alignment of 

human resources management and policy 

with international best practice. Each 

commodity business is fully resourced to 

manage its human resources requirements, 

within the Group’s policies and procedures. 

Recruitment and retention 

Recruitment, development and retention 

of employees are critical to the success of 

our business. In certain regions, including 

Australia and South Africa, competition 

for skilled mining employees is currently 

very strong and the retention of talented 

employees is a key issue for our 

operations. Employee turnover by 

commodity business is reported in the 

graphs on this page. In 2006, turnover fell 

to 5.2% including the operations acquired 

from the date of acquisition, compared to 

10.3% in 2005. 

We aim to attract and retain the best 

people at every level of our businesses 

and to provide them with the resources 

they require to achieve and maintain 

our operational excellence. We provide 

industry-leading career development 

opportunities, competitive remuneration 

and fair and non-discriminatory workplaces. 

We believe our devolved management 

structure and supportive environment for 

rational risk-taking offers unparalleled 

opportunities for development and 

entrepreneurial leadership, minimising 

bureaucracy and allowing every employee 

to play an active part in our success. 

We provide fair and competitive 

remuneration globally, by ensuring salary 

reviews take into account cost of living 

adjustments, by participating in industry 

salary surveys and by maintaining a fair 

system for measuring performance and 

delivering rewards to employees. 

Remuneration is closely aligned with 

Xstrata’s strategy to grow and create 

long-term shareholder value in a 

sustainable manner. We link a significant 

element of employees’ variable reward 

to the performance of the Group, in 

terms of production, safety and a range 

of personal and business-wide criteria. 

A high proportion of total remuneration 

for executive and senior management 

is ’at risk’ and performance-related, 

incorporating financial and non-financial 

performance measures. These performance 

measures are determined on an individual 

basis and include absolute performance 

(e.g. return on capital employed), relative 

performance (e.g. performance in 

comparison to peers) and non-financial 

performance measures (e.g. safety 

performance), in line with international 

best practice. Further information is 

provided in the remuneration report on 

pages 126 to 139 of the 2006 Annual 

Report and in the Governance and Ethics 

section of this report. 

In 2006, Xstrata made 204 compulsory 

redundancies as a result of the 

Falconbridge and Tintaya acquisitions. 

We seek to avoid compulsory redundancies 

where possible and provide all employees 

with assistance programmes, retraining 

and support as appropriate. 

A total of 94 employees lost their positions 

in 2006 due to non-compliance with 

Xstrata’s corporate policies and 

expectations. Non-compliance with health 

and safety procedures accounted for 52 

terminated positions and one termination 

occurred due to non-compliance with 

environmental procedures and policy. 

The remainder were due to transgressions 

of Xstrata’s Business Principles. 

Training and Education 

We offer employees ongoing training and 

education in the workplace or through 

external institutions. A number of 

initiatives are under way across our 

businesses to identify and develop existing 

employees and to recruit and train new 

colleagues. At supervisor level and above, 

every employee’s performance is jointly 

reviewed and assessed at least annually 

to identify areas for improvement, 

development and additional support. 

In 2006, Xstrata’s businesses spent over 

$39 million on training, an average of 

approximately $1,400 per permanent 

employee. On average, Xstrata’s employees 

Breakdown of males and females 

leaving employment 

Females leaving 

employment 13% 

Breakdown of males and females 

leaving employment by age group 

Females 30-50 8% Females >50 1% 

Females


Ravensworth Mine addresses shift work sleep issues 

Xstrata Coal’s Ravensworth Mine near 

Singleton supplies 4 million tonnes per 

annum of thermal coal to the nearby 

Bayswater and Liddell power stations in 

New South Wales, Australia. 

To service rising customer demand, most 

mining operations in the region operate 

around the clock, and many have adopted 

a 12-hour shift regime for employees to 

maximise continuity of operations. Studies 

by Latrobe University and others have 

suggested that 35% of the Australian 

workforce and a greater proportion of 

shift workers have problems sleeping. 

Sleep-related fatigue is a major factor in 

safety performance and effective decision 

making in the workplace. 

Ravensworth began a 12-hour shift 

system for all production and maintenance 

personnel in September 2006. The system 

consists of seven day shifts and seven 

night shifts in a 28-day period. In October 

2006, Ravensworth Mine management 

team began working with a consultancy, 

behavioural psychologists and employees 

to investigate the effect of shift work and 

sleep-related fatigue on sleep patterns 

and, subsequently, on health and safety. 

A voluntary survey of the mine’s 110 

employees was undertaken, with 100% 

participation, to gather information on 

psychometric measures including sleep 

quality, fatigue, sleep apnoea and 

depression, anxiety and stress. Participants 

were also required to keep a three-week 

sleep diary to record sleep patterns before 

48 and | Xstrata after the plc Sustainability change to Report a new 2006 shift. 

Based on the results, the project team 

produced a report comparing sleep 

patterns between an eight-hour shift and 

a 12-hour shift, and identified high, 

moderate and low risk employee groups. 

Using the information gathered, the study 

team began a programme of targeted 

intervention with the 15 employees 

allocated to the high risk group, using a 

six-module approach which included 

fatigue management, sleep environment 

improvement, sleep hygiene, strategies for 

sleeping well on shift work, relaxation and 

stress reduction. Each participant received 

a sleep pack, consisting of a sleep manual, 

six weekly coaching sets for improving 

sleep, questionnaires, a sleep diary and 

CDs promoting relaxation techniques and 

deep sleep. A sleep coach maintained 

contact throughout the programme, and 

reviewed the impact of the programme at 

the completion of the six-week study. 

Psychologists noted there was a 

widespread lack of awareness among 

workers of the importance of sleeping 

during the day before commencing the 

first night shift. Many people would start 

night shift at 7pm after waking up at 7am 

or 8am. This meant they would have been 

awake for about 17 hours halfway 

through their night shift. Research has 

shown that after 17 hours of wakefulness, 

fatigue impairment is comparable to a 

blood alcohol level of 0.05. Every 

participant in the survey was made aware 

of this, resulting in significant changes in 

sleep patterns. Family issues, including 

partner support and domestic distraction, 

emerged as impediments to employees 

getting satisfactory sleep. The sleep 

coaches helped families to organise their 

sleep regime better, and to achieve a 

better quality of sleep on the 12-hour 

roster. Complete confidentiality was 

maintained for all participants. 

Programme Coordinator Paul Hagarty said 

Ravensworth encourages employees to 

have 15 to 20 minute ‘power naps’ on 

their 12 hour shift during scheduled 

breaks. “This helps to reduce fatigue 

during a shift, particularly during night 

shifts,” he said. 

The final results of the study are currently 

being collated, and will be considered by 

Ravensworth management team to 

determine whether to implement further 

changes to shift patterns and targeted 

intervention with medium risk employees. 

The sleep management programme has 

been well supported by Ravensworth 

employees and sleep management 

methodology is now routinely considered 

when compiling rosters, to reduce 

fatigue risks. 

Production Team Coordinator Andrew 

Hamson said he had noticed that his 

energy levels had greatly improved due to 

the programme: 

”Previously, by 3am I would have been 

really tired. However, I haven't felt like that 

since the third week of the programme – 

it’s really removed that risk,” he said.


undertook 69 hours of training in 2006, 

a similar level to the previous year. 

Xstrata runs a Group-wide leadership 

development programme, and most 

commodity businesses have programmes 

to identify potential future business 

leaders, who are mentored by members of 

senior management and provided with 

opportunities for additional training, 

support and further career development 

within the Group. Development 

programmes include the opportunity for 

rotational secondments to different parts 

of Xstrata’s business and regular 

performance reviews. 

Apprenticeships, bursaries and 

scholarships 

In recognition of the importance of 

encouraging students to enter and remain 

in mining-related courses at Universities 

and to address the current shortage of 

employees with mining, engineering and 

related skills, we offer a significant number 

of trades apprenticeships, graduate trainee 

positions, work placements for students, 

bursaries and financial assistance and 

scholarships across our global operations. 

Xstrata’s programmes include: 

■ Trades apprenticeships, including 

partnerships with technical schools and 

universities; 

■ Participation in undergraduate 

development programmes and work 

placements for students; 

■ Graduate professional training and 

development programmes across a 

range of disciplines; 

■ Bursaries, scholarships and financial 

assistance provided in Europe, 

Australia, Argentina, Canada and 

South Africa; 

■ Participation in the Federation of 

European Mineral Programmes; 

■ Two university chairs funded by 

Xstrata: Chair of Geology at Rhodes 

University, South Africa and Chair of 

Metallurgical Engineering, the 

University of Queensland, Australia; 

■ A contribution of C$5 million from 

Xstrata Nickel for the creation of the 

Centre for Excellence in Mining 

Initiative in Sudbury, Canada; 

■ $2.1 million funding over five years by 

Xstrata Zinc to the Institute of Minerals 

Industry Education at the University of 

Ballarat, Victoria, Australia, to enable a 

metallurgy degree course to be reestablished 

and to support further 

minerals education courses; 

■ A scholarship on the European Mineral 

Engineering Course through the 

Federation of European Minerals 

Programmes. 

In South Africa, we have implemented a 

systematic approach to investing in the 

skills of our future workforce, working 

with provincial government to strengthen 

institutions at the primary, secondary and 

tertiary education levels, in addition to 

offering scholarships, bursaries and 

financial assistance for students to enter 

higher education. Xstrata is also investing 

over ZAR103 million in 2007 in skills 

development, as part of our commitment 

to the South African government’s 

‘accelerated and shared growth initiative 

Average training hours 

per employee 

69.0 

68.7 

71.2 

34.0 

96.0 

85.0 

Group Alloys Coal Copper Nickel Zinc 

Average training spend 

per employee ($) 

1,416 

1,565 

503 

383 

1,601 

1,152 

68.8 

2,236 2,616 

117.5 


68.0 

40.0 

39.2 


2,037 

1,628 

1,636 

Group Alloys Coal Copper Nickel Zinc 

Mechanics in the truck shop at Lomas Bayas 

copper mine, Chile 

A geologist measures core samples at the 

Araguaia nickel laterite project, Brazil 



Xstrata South Africa is actively promoting 

increased diversity in the workforce 

for South Africa’, to halve poverty and 

unemployment by 2014. 

Diversity and Equal Opportunity 

We seek to employ a diverse workforce, 

to benefit from a varied range of skills, 

backgrounds and perspectives. We employ 

people based on the skills and experience 

required for each particular position, 

without discrimination according to 

gender, race, age, sexual orientation, 

religion, nationality or any other factor. 

No formal diversity targets are in place, 

with the exception of South Africa, where 

Breakdown of males and females leaving employment by region 

12% 

Australia 

Males leaving employment Females leaving employment 


our businesses are actively recruiting, 

training and fast-tracking historicallydisadvantaged 

South Africans and female 

candidates to achieve, and where possible 

exceed, targets set by the South African 

Mining Charter. These targets stipulate 

that women must represent 10% of the 

workforce and 40% of managers must be 

historically-disadvantaged South Africans 

(HDSAs) by 2009. 

At the end of 2006, HDSAs (including 

women) represented 35% of all 

management positions in Xstrata Coal 

South Africa and 39% of all management 

positions in Xstrata Alloys. Excluding white 

women, HDSAs represent approximately 

30% of all South African managers. 

Women accounted for 12% and 9% of 

Xstrata Coal South Africa and Xstrata 

Alloys workforces respectively, and 10% 

and 12% of management positions at the 

end of 2006. Both South African businesses 

are on track to exceed the targets set out 

by the Mining Charter by 2009. 

Globally, women comprise 11% of the 

total workforce and 7% of all managers. 

A number of initiatives are under way to 

increase diversity and achieve a better 

gender balance within our workforce. 

In Xstrata Nickel, a Diversity Council has 

been established, with the support of 

external specialists, to guide Xstrata 

Nickel’s strategy in building an inclusive 

working environment and expand 

opportunities for all employees. Six female 

managers have been selected to 

participate in the Women’s Executive 

Network’s groundbreaking mentoring 

programme in Canada, which links female 

business leaders with high potential 

female candidates to support their 

growth and development. 

Xstrata Coal South Africa initiated a 

‘women in mining’ recruitment drive in 

early 2005. To date, 140 women have 

been employed through this programme 

into various mining occupations. 

We are also implementing a number of 

‘family friendly’ policies and practices. 

These include the introduction of flexible 

or shorter rosters to attract individuals 

with childcare commitments, and support 

to increase childcare facilities within local 

communities, to enable parents to join 

and remain in the workforce. In Australia, 

the Queensland Resource Council has set 

a target of 10% female representation in 

the resource sector. Xstrata Coal is 

participating as a committee member of 

this working party task group. 

Compassionate, family and extended 

parental leave is also provided to support 

employees with family commitments. 

We give full consideration to applications 

for employment from disabled persons, 

where the requirements of the job can be 

adequately fulfilled by a handicapped or 

disabled person. Where existing 

employees become disabled, it is Xstrata’s 

policy wherever practicable to provide 

continuing employment under normal 

terms and conditions and to provide 

training and career development and 

promotion to disabled employees. 

Our businesses offer equal pay to male 

and female candidates of equal 

experience and aptitude. 

8% 28% 13% 5% 

88% 92% 72% 87% 95% 

South Africa South America North America Europe

Social Responsibility 

Strong relationships with the communities associated with our operations and offices worldwide, based on 

trust and mutual benefit, are essential to our ability to operate and our success. We work in partnership 

with communities and other stakeholders to have a positive impact on quality of life and contribute to the 

development of sustainable communities and livelihoods, avoiding dependency on our operations, 

upholding human rights and respecting cultural considerations and heritage. 

51 | Xstrata plc Sustainability Report 2006 Xstrata plc Sustainability Report 2006 | 51

Social Responsibility 

Economic contribution 

Xstrata’s operations generate economic benefits and contribute towards the economic development 

and prosperity of the communities and countries in which we work directly and indirectly in a number 

of ways, including: 

■ Wages and benefits paid to employees 

and contractors; 

■ Job creation through the expansion 

of existing operations and the 

development of new projects; 

■ Indirect job creation in surrounding 

communities and towns; 

■ Royalties and taxes paid to local, 

regional and national government; 

■ Payments to suppliers for goods and 

services; 

■ Distributions to providers of capital, 

including returns to shareholders and 

debt providers; 

■ Corporate social involvement 

contributions to support communities 

associated with our operations. 

A comprehensive Group financial review 

and operating reviews for each 

commodity business are provided in 

the 2006 Annual Report. 

Xstrata’s businesses report their 

contribution to the regional economy 

through site or divisional sustainability 

reports, community newsletters and 

regular community meetings. 

Xstrata’s Community HSEC Management 

Standard sets out the Group requirement 

for all projects and operations to improve 

the social and economic position of local 

communities through: 

Economic value added 

■ Development and use of appropriate 

skills and technologies; 

■ Support for community educational 

and health programmes; 

■ Providing employment opportunities 

for local people; 

■ Sourcing and purchasing from local 

companies; 

■ Support for community projects; 

■ Handling matters in a spirit of trust; 

■ Promoting local business development. 

Operations in remote areas, developing 

countries or regions with high 

unemployment and poverty play a 

particularly important role in their 

contribution to the local economy and 

development impact. In these areas, 

developing sustainable communities and 

livelihoods, avoiding dependency on finite 

mining operations, is especially important. 

This includes Xstrata’s operations in 

developing countries such as Argentina, 

Chile, Papua New Guinea, Peru, South 

Africa and Tanzania, together with remote 

locations in Australia and northern Canada. 

Procurement and suppliers 

Xstrata does not have a central 

procurement function, preferring to allow 

operations to source products and services 

locally, or at a regional or commodity 

business level. This approach emphasises 

local procurement and enables greater 

flexibility in purchasing materials and 

services for each operation. We give 

preference to locally based suppliers 

without compromising quality or HSEC 

requirements. In some areas, for example 

in Queensland, Australia, where the market 

for commonly-used mining inputs is very 

tight, our businesses work together to 

achieve efficiencies and maximise 

purchasing power. 

We support the creation and development 

of smaller local businesses through 

providing training, management expertise, 

business planning, logistics and quality 

control to help suppliers meet our 

standards and develop their businesses 

further. Xstrata’s HSEC management 

standard 11: Suppliers, Contractors and 

Business Partners sets out our requirements 

for the assessment of and engagement 

with suppliers on health, safety, 

environmental and social issues to ensure 

these align with Xstrata’s Business 

Principles. A copy of Xstrata’s Business 

Principles is provided to every business 

partner and we actively engage with 

suppliers to ensure compliance with these. 

We pay suppliers promptly within 

contract arrangements and ensure that 

all transactions are properly authorised 

and accurately recorded. 

North South 

2006 $m Group Australasia Europe America America Africa 

Revenues 17,632 4,815 2,594 4,408 4,142 1,673 

Payments to suppliers (operating costs) 8,621 1,495 1,936 2,942 1,277 971 

Economic value added 9,011 3,320 658 1,466 2,865 702 

Royalties 391 225 – 10 151 5 

Employee wages and benefits 1,435 548 214 222 195 256 

Payments to providers of capital (dividends and interest) 727 241 183 99 -4 208 

Payments to government (gross taxes) 1,022 370 79 19 511 43 

Community investment (CSI) 49 6 1 11 16 15 

Economic value retained 5,387 1,930 181 1,105 1,996 175 


Xstrata Nickel’s Raglan mine is located 

in the Canadian Arctic and relies heavily 

on products imported directly to the 

operation and to the region. In 2007, 

Raglan will benchmark industry best 

practice in order to implement a ‘green 

buying’ procurement strategy, to minimise 

the environmental impacts associated with 

its supply chain. Once developed, this 

benchmark will be shared with other 

operations. 

In New Caledonia, the Xstrata Nickel 

Koniambo project will establish a local 

company in 2007 to broker local services 

and human resources, in partnership with 

community representatives. Eventually, 

the company is intended to become an 

independent entity and will help the 

project achieve its commitment to 

maximise local procurement and 

employment. 

In South Africa, Xstrata’s businesses 

have implemented black economic 

empowerment (BEE) procurement policies, 

which give preference to black owned or 

controlled suppliers. These policies include 

providing support for the establishment of 

small- and medium-sized enterprises, 

including management support, transfer 

of technology and other forms of 

expertise, ‘soft’ loans and financial 

assistance. In 2006, BEE compliant 

suppliers accounted for 44% of Xstrata 

Alloys and 41% of Xstrata Coal South 

Africa procurement or a total of ZAR3 

billion. Our target in 2007 is to increase 

the proportion of procurement from BEE 

compliant companies to 50% of all 

payments to suppliers in South Africa. 

There is clear evidence that aggressively 

pursuing BEE procurement has resulted in 

some real cost savings for our business, 

while advancing HDSA participation in the 

economy. BEE suppliers tend to be smalland 

medium-sized enterprises which hold 

fewer contracts at a time and are based 

locally to our operations, ensuring quicker 

delivery time or better service. In some 

instances, BEE suppliers are unable to 

access economies of scale available to 

larger companies with a larger number of 

Number of positions created 

Alloys 

Aluminum 

Coal 

Copper 

Nickel 

Technology 

Zinc 

n/a 

n/a 

65 

4 

13 

141 

102 

156 

137 

241 

227 

389 

contracts to fulfil. In these cases, we 

encourage BEE and non-BEE companies to 

enter into joint ventures with one another, 

to ensure skills transfer and revenue 

sharing for BEE suppliers and to enable 

non-BEE companies to participate in our 

supply chain. 

Job creation 

In 2006, Xstrata’s operations and 

businesses created a total of 2,541 new 

positions, with 72% of these positions 

filled by local residents. This is defined as 

people who, prior to employment by 

Xstrata, were already resident in the same 

geographic region as the principal location 

for employment (usually defined as 

neighbouring communities or towns). 

New positions are defined as new jobs 

created from the expansion of operations 

or new projects or activities. Operations or 

offices integrated into the Xstrata Group 

in 2006 from the acquisition of businesses 

are not counted as new positions. The 

majority of new positions were created at 

Xstrata Alloys, through the construction 

and commissioning of the Lion 

ferrochrome smelter in 2006. 

The proportion of senior management 

positions filled by local residents is 

estimated at approximately 70% across 

the Group. Commodity businesses with 

operations in more than one region often 

provide opportunities for senior managers 

to transfer between regions, to provide 

career development opportunities and 

global experience and to enable skills 

transfer between divisions. 

574 

Our operations give preference initially to 

local residents when hiring. At a number 

of operations, formal agreements are in 

place with local communities, unions 

and/or regional authorities to ensure local 

residents have first choice of employment 

opportunities. 

For example: 


1,508 

■ In South Africa, Rhovan vanadium 

operation established a recruitment 

agency in the local area during 2000 

in collaboration with the Bakwena Ba 

Mogopa Tribal Authority. The 

recruitment agency serves all five 

villages in the local area. Xstrata Alloys 

has a formal agreement with the 

agency to offer recruitment 

opportunities to candidates from the 

community as the first option. 

■ In Canada, Xstrata Nickel’s agreement 

with the Inuit communities associated 

with the Raglan nickel operation 

ensures that community members 

are prioritised for job openings and 

training positions. The mine has a 

target of 20% Inuit employment 

(currently 18%). 

■ In Peru, the Las Bambas exploration 

project has an agreement with local 

communities to maximise the number 

of community members benefiting 

from employment at the project, by 

rotating jobs between members of the 

various communities within the 

project’s area of influence. 


Social Responsibility | Community 

Our approach 

We seek to maintain broad-based, ongoing community support for our activities throughout our 

operations’ life cycle. We consult with communities as early as possible and establish formal mechanisms 

for ongoing consultation, complaints and grievance resolution. Closure planning includes socio-economic 

studies and consultation with employees and local communities to identify impacts and develop 

programmes to mitigate these. 

Our community strategy is focused on: 

■ Wherever we operate, understanding 

local communities’ culture, customs, 

priorities and needs; 

■ Maximising the benefits of our 

presence and operations for 

communities; 

■ Contributing to communities’ 

sustainable development, avoiding sole 

dependence on our operations. 

Every operation is required to assess its 

potential social, environmental and 

economic impacts and develop and 

implement mitigating strategies for these 

impacts in consultation with affected 

parties. We also identify opportunities for 

positive contributions to improving the 

social and economic wellbeing of 

communities and establish socio-economic 

baseline studies to enable us to measure the 

effectiveness of our community 

programmes. 

Xstrata’s Community HSEC Management 

Standard sets out Group expectations 

Middelberg care village, South Africa, sponsored by Xstrata Coal 


for effective and early engagement with 

communities, identification of the potential 

impacts of our operations, key risks and 

opportunities and appropriate community 

relations and other activities to mitigate 

the impacts, manage the risks and derive 

mutual benefits from the opportunities. 

We work together with government and 

other development institutions to align our 

activities and maximise the social and 

economic benefits of community projects. 

Each operation and commodity business 

identifies its stakeholders, and we seek to 

understand and map the relationships 

between stakeholders. This includes the 

identification of potentially impacted 

communities and associated stakeholder 

groups, including vulnerable groups e.g. 

indigenous people, women, children, 

elderly people. 

Community engagement 

The core principles of our community 

engagement are as follows: 

■ We communicate openly, transparently 

and establish a two-way dialogue with 

communities, proactively seeking 

community input and feedback and 

incorporating this into planning; 

■ We engage with communities in a 

culturally appropriate manner and with 

respect for local protocols, customs 

and heritage; 

■ We include all communities within the 

operation’s area of influence and 

prioritise the most affected 

communities and vulnerable groups; 

■ We commence community 

engagement as early as possible and 

preferably before operations 

commence; 

■ We establish mutually understood and 

accepted consultation mechanisms, 

including the ability for communities to 

raise complaints and enquiries, and 

establish suitable grievance resolution 

processes; 

■ We address issues raised by 

communities and issues relevant to 

Xstrata’s operations equitably; 

■ We seek ongoing, broad-based 

community support for our activities 

and we measure this through regular 

perception studies and community 

meetings; 

■ We communicate the potential impacts 

and benefits of all proposed major 

changes to operations openly and fully 

to communities in advance and 

incorporate feedback and concerns 

raised into our decision making; 

■ A record is kept of all community 

engagement and a summary of 

complaints and enquiries received is 

publicly reported in Group divisional 

and site Sustainability Reports. 

At a number of operations, formal 

agreements with local communities are in

place to share benefits, maximise local 

employment and participation in the 

project. One such agreement, between 

Xstrata Nickel’s Raglan operation in the 

Canadian Arctic and Inuit communities in 

the region, is outlined in a case study on 

pages 60-61 of this chapter. 

Community skills and training 

Community training and skills 

programmes are in place at many 

operations and projects, particularly those 

located in developing countries or with a 

high concentration of unskilled workers, 

often in partnership with NGOs, 

government or other companies operating 

in the region. These programmes aim to 

equip members of the communities in the 

operations’ area of influence with the 

necessary skills to gain employment with 

or act as suppliers to Xstrata and other 

companies. 

In Peru, extensive community skills and 

training programmes are being 

implemented for communities associated 

with the copper exploration project at 

Las Bambas, which is located in one of 

the poorest regions of Peru. These 

programmes are one element of a 

comprehensive community engagement 

strategy and aim to equip local people 

with the necessary skills to gain 

employment at the project, to build 

Xstrata Coal South Africa’s Training Centre 

provides adult basic education and training 

to employees and community members. 

Xstrata Alloys Lion Ferrochrome operation 

includes a dedicated community skills 

training centre 

Community skills development in South Africa 

Community skills and training programmes are particularly material in South Africa, where many of Xstrata’s operations are located in 

regions with high unemployment and low levels of literacy, skills and training. 

To address this, Xstrata offers adult basic education and training to community members, as well as to all employees and contractors. 

In early 2007, we opened a community adult basic education and training and skills centre in Kwa Guqa, Witbank, in partnership with 

the Emalahleni local municipality. The centre, constructed and funded by Xstrata on land donated by the municipality, is offering literacy 

courses and skills training to community members and unemployed people in the region and complements Xstrata Coal’s existing Group 

Training Centre for employees and community members. Life skills and personal finance education and training courses will be made 

available for community members and employees. Community members will also be able to apply for Xstrata learnerships to support 

further training and education. 

The construction of the Lion operation included a dedicated skills training centre, which provides training for local residents and 

has to date trained over 150 people, the majority of whom are now employed at the plant or at neighbouring mining and industrial 

operations. This operation is situated in a region with high unemployment with a high proportion of unskilled labour. 



CSI by region 

Australia 12% 

South Africa 

31% 

CSI by type 

Europe 2% 

Enterprise and job 

creation 6% 

Education 19% 

Health 21% 


capacity for future negotiations with the 

operation and to support efforts to 

improve nutrition, local agriculture and 

income generation. These include: 

■ construction and maintenance training 

to enable local employment for the 

construction of exploration camp and 

community projects infrastructure; 

■ food hygiene and preparation, to 

enable local employment at the 

exploration camp and at any future 

mine; 

■ training in handicraft business 

development as part of enterprise 

development projects to establish 

sustainable small businesses; 

■ capacity building in dialogue 

methodologies and techniques; 

■ training in pasture management and 

maintenance of irrigation infrastructure; 

■ urban planning that includes training in 

architecture concepts; 

■ training in animal sanitation, to assist 

communities manage their livestock 

more effectively. 

In the Dominican Republic, the Falcondo 

Foundation, initiated and supported by the 

Falcondo nickel operations, has supported 

over 78,000 students and almost 2,000 

teachers at public elementary schools to 

improve education and teacher training. 


South America 

33% 

Environment 4% 

Culture/art 3% 

Social/ 

community 

development 

47% 

Sustainable community 

development 

Xstrata contributes a minimum of 1% of 

Group profit before tax each year to fund 

projects and initiatives that benefit the 

communities associated with our 

operations. This support is particularly 

material for operations and projects 

located in remote areas, or in regions 

with a lower level of social and economic 

development and infrastructure. In 2006, 

Xstrata set aside over $49 million for 

this support. 

Our corporate social involvement is based 

around five principles: 

■ Local focus 

■ Maximum devolution 

■ Best practice 

■ Flexibility 

■ Financial and organisational efficiency 

Each managed operation and project is 

required to develop a corporate social 

involvement plan through consultation 

with the communities within its area of 

influence and other stakeholders including 

government, NGOs and other institutions. 

We develop and support programmes in 

the areas of community health, education, 

environment, social and community 

development and culture and art. 

Social involvement encompasses financial 

donations and support, management 

expertise and in-kind contributions. All 

Xstrata operations had an active CSI plan 

at the end of 2006 or had collaborated 

with other operations to develop a 

regional plan. Sites acquired from 

Falconbridge in 2006 will develop CSI 

plans to cover each operation during 2007 

and 2008. 

CSI programmes must demonstrably 

provide benefits to the wider community 

and cannot be for the benefit of Xstrata’s 

employees alone. We do not support 

political parties, individuals or religious 

activities or organisations that are 

exclusive to one faith community. 

In 2006, Xstrata’s businesses worked to 

improve the co-ordination of corporate 

social involvement programmes and 

community relations activities, particularly 

in areas where a number of operations are 

located in close proximity. This has 

enabled CSI programmes to leverage 

several operations’ expertise and work 

more effectively with local authorities and 

other institutions. 

In remote, rural locations, we support 

sustainable farming and agricultural 

projects to assist farmers develop 

sustainable businesses, through providing 

management expertise, access to modern 

farming techniques, donating materials 

and financial assistance. 

These include projects to improve the yield 

and quality of grapes, walnuts, peppers, 

paprika, cumin, anise in Argentina, where 

the local region is dominated by smallscale 

producers. At the Tintaya operation 

in Peru, support has been provided for the 

significant number of local dairy producers 

to improve the quality and quantity of 

milk and to assist the production of 

further dairy products. At Las Bambas, 

a wide range of projects aim to improve 

agricultural production, nutrition for 

community members and provide income 

generation (see case study on page 57). 

In South Africa, an innovative project to 

train historically disadvantaged young 

farmers using land owned by Xstrata is 

under way. Under apartheid, black South 

Africans previously could not own land by 

law and were therefore not able to farm 

commercially. This project provides trainee 

farmers with management expertise and 

practical training, together with land, 

which will eventually be leased at a 

commercial rate. The project aligns with a 

key objective of the Mining Charter and 

BEE legislation to open up access to the 

mainstream economy and creates 

alternative employment that will outlast 

the mining operation.

Las Bambas social involvement programmes aim to improve community self-sufficiency 

Xstrata Copper is continuing its drive to 

improve regional health, education and 

community infrastructure to ensure its 

Las Bambas copper project in Peru is a best 

practice model of sustainable development. 

Las Bambas is located within the 

Cotabambas and Grau provinces, among 

the poorest provinces in Peru. Communities 

in the region suffer from poor nutrition, 

associated health problems and high 

illiteracy rates. The Xstrata Copper Las 

Bambas community relations team has 

been active in the region before exploration 

began on the project and comprises 

dedicated professionals including speakers 

of Quechua, the local indigenous dialect. 

The team has developed an understanding 

of the local cultural belief systems, 

community concerns and expectations. 

Extensive consultation through community 

workshops with NGOs, local mayors, 

community leaders and schools enabled 

Xstrata Copper to develop an extensive 

community plan to identify ways to help 

local communities to improve their 

standard of living and achieve long term 

sustainability as an integral part of the 

exploration programme. Workshops are 

regularly undertaken, where the 

community is invited to represent 

graphically their present situation and 

where they would like to be in the future. 

These exercises have identified issues such 

as nutrition, health, domestic violence and 

communication issues. The concerns and 

issues identified in the community relations 

plan and the community’s hopes and 

expectations for the future are integrated 

into the Social Involvement Programme. 

This programme includes a series of action 

plans aimed at improving health, education 

and infrastructure and to encourage selfsufficiency. 

Community Relations Manager Raúl Farfan 

said one of these action plans focuses on 

improving irrigation infrastructure, as an 

identified root cause of malnutrition and 

poor cattle breeding. 

“Historically, the local people have 

depended on the rainy season for 

prosperity, and accepted starvation during 

the dry season,” he said. 

“Our community relations team has been 

working with the local community to 

implement an irrigation and hydroponics 

scheme to improve grasslands and to 

understand management techniques for 

local pasture better. 

“A number of small reservoirs have been 

constructed to feed a series of sprinklers 

and these have proved to be 90% more 

efficient than irrigation channels. We have 

also helped farmers to improve their 

understanding of the negative impacts of 

overgrazing for farming and the local 

environment and to develop better 

husbandry techniques, including the 

introduction of additional grass species to 

improve pasture.” 

Raúl said the future of the project would 

centre on developing community selfsufficiency. 

“The ability to generate more income, 

improve nutrition levels and improve 

education levels is integral to achieving 

sustainability,” he said. “The next step in 

this project will be to create more local 

businesses – similar to the trout farm 

already established and managed by 

community members, which supplies 

local markets with fresh fish.” 

Xstrata’s community relations team is 

supporting community efforts to establish 

an organisational structure that will help 

distribute these benefits throughout the 

local community. The team is also carefully 

monitoring the progress of its Social 

Involvement Programme. 

“Working from a social baseline census 

carried out in 2004–05 to identify 

demographics and local perceptions, the 

team carries out a project analysis every 

two months to assess progress,” Raul said. 

“We also study perceptions on whether 

the projects are adding value 

to the community and use this as a 

mechanism to measure effectiveness and 

identify problems. 

“The programme is designed to be fully 

integrated with our exploration activities and 

to evolve over time, to ensure maximum 

community benefits and effectiveness.” 



Children from communities near El Morro 

copper project, Chile 

Marifaan Primary School, Lydenburg, South 

Africa is sponsored by Xstrata 

2006 complaints by commodity business 

including acquired operations 

Nickel 6% Zinc 5% 

Aluminium 3% 

Alloys 7% 

Copper 18% 

Coal 61% 


Complaints and enquiries 

An important aspect of our engagement 

with communities is the documented 

process in place at all operations which 

provides community members with 

appropriate methods of contacting our 

operations directly with enquiries or 

complaints. We record and assess 

complaints and enquiries we receive and 

respond to each one. This procedure is 

audited through the HSEC Assurance 

Programme. 

In 2006, Xstrata’s managed operations 

and projects (including acquired operations 

from the date of acquisition) received 

391 complaints and enquiries, compared 

to 587 in 2005. The most frequent causes 

of complaints and enquiries were general 

noise and dust, which together accounted 

for 224 of the total. Xstrata Coal 

accounted for the majority of complaints 

and enquiries, recording a similar number 

to the previous year, predominantly from 

the New South Wales operations. Many 

of these coal mines are located close to 

residential areas and thoroughfares and a 

large proportion of the complaints were 

made by one resident. The majority of 

complaints received by Xstrata Copper 

and Xstrata Zinc relate to air emissions 

at Mount Isa, where operations are within 

a city. Sulphur dioxide emissions have 

decreased by 64% since 2000, and 

complaints received have followed this 

trend, with 41% fewer complaints received 

in 2006 compared to the previous year 

and 79% fewer than in 2000. 

Indigenous peoples and 

cultural heritage 

We respect the traditional rights and 

cultural heritage of indigenous people, 

recognising that these peoples have a 

distinct ethnic identity and are often 

historically disadvantaged. We ensure 

that indigenous and other historically 

disadvantaged groups are properly 

identified in stakeholder engagement. 

We structure our engagement activities 

in a manner that is culturally appropriate 

and facilitate the active involvement of 

indigenous peoples in consultation, 

including capacity building initiatives 

where necessary or appropriate. 

We support initiatives to provide 

employment opportunities, training and 

enterprise development to indigenous 

and previously disadvantaged people, in 

particular at our Peruvian, Australian and 

South African operations. 

Xstrata Coal Australia participates in the 

‘Working in Partnership’ programme 

coordinated by the Federal Department of 

Industry Tourism and Recreation to 

support and encourage the development 

of long-term, mutually beneficial 

partnerships between miners and 

indigenous people in regional and remote 

areas. McArthur River Mine and Mount Isa 

Mines in the Northern Territory and 

Queensland respectively run Indigenous 

Employment Programmes, to provide 

training and development opportunities 

to prepare local indigenous community 

members for employment at the mine.

The Xstrata Community Partnership 

Programme North Queensland, in place 

since 2005, supports an initiative to 

provide training and support for 

indigenous people to identify and exploit 

employment opportunities in the region, 

including a mining sector training 

programme with 50 indigenous people 

completing the course and finding 

employment in 2006. An Indigenous 

Relations Strategy and cultural awareness 

course for all employees are being 

developed at Mount Isa Mines in 2007. 

A number of community health initiatives 

are also under way to support both 

indigenous and non-indigenous remote 

communities in the region. 

We support the protection of indigenous 

cultural heritage, archaeological and sacred 

sites. We consult with indigenous people 

to identify and assess any potential impacts 

of our operations on culturally important 

areas. We work together to develop 

strategies to avoid impacts where possible 

and to ensure access to important sites. 

All new mining areas are assessed for 

cultural significance prior to disturbance, 

in consultation with indigenous people. 

Cultural heritage management plans for 

these sites and significant areas are 

developed jointly and access is provided 

on an agreed basis. No cultural heritage 

sites were disturbed in 2006. 

Xstrata also supports research into cultural 

heritage management and runs a wideranging 

programme of cultural awareness 

training for employees. 

The Koniambo project in New Caledonia 

has a number of ongoing heritage 

initiatives with indigenous peoples, 

including support for the protection of 

artefacts obtained during the site 

archaeological studies. All major Xstrata 

Nickel projects will undertake 

comprehensive archaeological assessments 

in 2007 and devise management plans for 

cultural heritage sites and artefacts in 

consultation with indigenous people and 

community members. 

Complaints by type 

2006 including acquired operations 

General dust 

General noise 

Fume 

Blasting vibration 

Other 

Water related 

Access to 

property 

Traffic amenity 

Vehicle fallout 

damage claims 

Resettlement 

It is our policy to resettle people only 

where this becomes unavoidable and we 

seek alternative solutions where possible. 

Where resettlement is necessary, we 

adhere to the World Bank Operational 

Directive on Involuntary Resettlement. We 

consult with affected communities as early 

as possible, providing comprehensive 

information about the potential impacts 

and benefits of the proposed project and 

resettlement. We use a range of culturally 

appropriate communication methods to 

ensure immediate and potential future 

impacts and benefits are understood by 

those affected. We incorporate feedback 

and concerns about resettlement and the 

proposed project into our planning. 

We complete socio-economic baseline 

plans and census surveys as a starting 

point for resettlement planning. We 

determine a fair price for land and 

property acquisition and work within 

the relevant legislative requirements of 

different countries for land compensation 

and resettlement. 

Alloys 

Aluminum 

Coal 

Copper 

Nickel 

Zinc 

Resettlement action plans are developed 

to address specific issues relating to the 

affected communities, including socioeconomic 

support, for example for 

enterprise development and training or 

support for community health and 

education. 

No households were resettled in 2006, 

however a number of managed and nonmanaged 

operations are undertaking 

consultation on resettlement in 2007. 


■ Xstrata Coal: Goedgevonden 

operation, South Africa; 

■ Xstrata Copper: Las Bambas project, 

Peru; 

■ Xstrata Coal: Cerrejón coal mine, 

Colombia (non-managed operation in 

which Xstrata has a 33% interest); 

■ Xstrata Nickel: Kabanga project, 

Tanzania; 

■ Xstrata Nickel: Falcondo ferronickel 

operation, Dominican Republic. 


Xstrata Nickel’s Raglan mine is the largest commercial operation in the Nunavik territory in the Arctic north of Quebec, Canada. The mine 

reached a milestone in 2006 with the presentation of a profit-sharing cheque for C$9.3 million to the Makivik Corporation, a non-profit 

organisation that is owned by the Inuit of Nunavik. 

The Makivik Corporation, founded in 1978, oversees social, political and economic development in the Nunavik Territory, and also promotes 

the preservation of Inuit culture and language (Inuktitut). Nunavik is sparsely populated, with approximately 10,000 residents living in 14 

communities. The two closest communities to Raglan are Salluit (1,000 residents) and Kangiqsujuaq (550 residents), approximately 250km 

from the mine site. 

In 1992, six years prior to production beginning at Raglan, mine representatives met with members of the Makivik Corporation and agreed 

to initiate a more formal consultation process. The Raglan Agreement was signed in 1995 between the Makivik Corporation, Raglan mine, 

Salluit and Kangiqsujuaq. 

The comprehensive socio-economic agreement addresses environmental protection and mitigation, dispute resolution, procurement priority 

given to competitive Inuit businesses and employment. Inuit in Salluit, Kangiqsujuaq and the Nunavik region as a whole are given priority in 

all recruitment. An employment and training committee was formed, with representatives from the mine, the Kativik School Board and the 

regional government to fulfil the agreement commitments to create training programmes for Inuit workers. These include a ‘stope school’, 

apprenticeships and internships. 

The profit-sharing arrangement includes a commitment to provide 4.5% of operating profit to the community partners in the agreement 

once the mine has recouped its initial capital investment. The 2006 payment of C$9.3 million is the second and by far the largest payment 

to date, following a payment of C$300,000 to the partners in 2005. The money is placed in a trust, which in turn distributes 25% of the 

money to the Makivik Corporation, 30% to Kangiqsujuaq, and 45% to Salluit. The Makivik Corporation and local communities distribute 

the funds among the 14 communities in the Nunavik region, based on an evaluation of needs. 

Raglan Agreement fosters strong indigenous relations

The Raglan Agreement is governed by the six-member Raglan Committee, comprising Salluit, Kangiqsujuaq and the Makivik Corporation 

representatives, and three Xstrata Nickel representatives. The committee meets four or five times each year and addresses issues that may 

arise between the company and the local communities. The results of all environmental monitoring are reported to the committee. Should 

mitigation measures not be acceptable to members of the committee, a formal arbitration process is in place, although this has never 

been requested. 

Since 1995, the committee has had a significant influence on the manner in which the mine is operated. For instance, concerns were raised 

that normal shipping practices were potentially disruptive to the migratory patterns of the seal population. Normal shipping – which 

involves ice-breakers – also interfered with traditional Inuit hunting activity during specific seasons. These issues were examined by the 

Raglan Committee, and it was collaboratively agreed that all shipping would cease between 15 March and 15 June. This solution does not 

impact mine output, nor does it disturb the seal population or interfere with traditional hunting. 

In 2006, approximately 17% of the operation’s annual procurement budget was spent on Inuit businesses and services, up from 13% in 

2005. The mine has a target of 20% Inuit employment (currently 18% of the workforce is Inuit). The mine continues to work towards 

the 20% target, despite the inherent challenges of a remote, northern operation (including high turnover), and since 1998, more than 

C$10 million has been invested in training initiatives by the mine and local government. New training plans are being developed for 

implementation by 2008 focused on skilled trades training, cross-cultural initiatives and on retention of Inuit employees. 

Since its development, the Raglan Agreement has been used as a benchmark and reference point for other First Nations agreements in the 

mining industry and in other industrial sectors. Both the Makivik Corporation and the company have shared their experiences with other 

companies and organisations wishing to develop their own agreements. The Raglan Agreement itself is considered a public document and 

is provided to third parties upon request. 


Environment 

Xstrata is committed to the highest standards of environmental performance and to the principles of 

sustainable development. Each managed operation maintains an environmental management system 

aligned to Xstrata’s business principles, HSEC policy and 17 HSEC Management Standards and compliant 

to ISO14001, ICMM’s sustainable development principles and the Mineral Council of Australia’s Enduring 

Value programme. A document mapping our HSEC Management Standards to the ICMM principles, 

ISO14001, OHSAS18001 and AS/NZS4801 health, safety and environmental standards is available from 

62 our | Xstrata website plc Sustainability at www.xstrata.com/sustainability. 

Report 2006


We are committed to limiting the environmental impacts of our operations through efficient use of natural 

resources, reducing input materials and waste and contributing to the conservation of biodiversity. We aim 

to plan, design, operate, and close operations in a manner that enhances sustainable development. We 

proactively identify environmental risks and opportunities as an integral part of our risk management 

processes and business planning. 

We aim to continually improve our 

environmental performance by measuring 

and reviewing the effectiveness of our 

environmental management systems, and 

compliance to ISO14001. Each commodity 

business develops a sustainable 

development strategy to manage key 

challenges and identify opportunities, 

including specific strategies to manage 

material environmental issues such as 

climate change, water management, 

biodiversity conservation, sustainable 

closure and energy efficiency. 

We apply the principles and expectations 

set out by our HSEC policy and management 

standards to all acquired operations. 

Through our HSEC Assurance Programme 

and integration process, we require 

operations to prepare detailed action plans 

to address areas of underperformance 

and achieve sustainable improvements 

in environmental management and 

performance. Environmental training 

and awareness at a site and commodity 

business level are monitored through 

the assurance programme. 

Material environmental issues 

Xstrata’s material environmental challenges 

are: 

■ Climate change and greenhouse gas 

abatement; 

■ Biodiversity conservation and land 

management; 

■ Resource management, in particular 

water and energy; 

■ Emissions, waste and tailings 

management; 

■ Closure planning and closed site 

management. 

Xstrata’s rapid acquisition-led growth in 

2006 has also substantially increased our 

environmental footprint, introducing new 

material issues requiring responses at 

global, regional and local levels. Through 

the acquisition of Falconbridge, Xstrata 

has gained a significant number of closed 

sites, many of which require ongoing 

management, particularly in the area of 

water management and treatment. We 

have integrated the management of these 

sites into our commodity businesses, 

encouraging a more integrated approach 

to their economic, safety, environmental 

and social management. 

We have also gained exposure to nickel 

and cobalt within our portfolio, adding to 

our product stewardship responsibilities, 

together with additional zinc, lead, copper 

and thermal coal exposure from the 

acquisitions completed in 2006. Recycling 

operations acquired from Falconbridge 

enable us to make a positive contribution 

to extending the life cycle of a range of 

metals, and we are expanding this 

recycling capacity with a recycled feed 

preparation plant at the Sudbury Smelter, 

Canada. 

A number of the acquired sites operate 

in water-constrained regions, including 

Altonorte, Lomas Bayas and Collahuasi 

in northern Chile. The addition of several 

metallurgical operations has also increased 

energy use and air emissions, with historic 

underinvestment in some operations 

requiring additional capital to implement 

emissions reduction technology. 

The potential environmental impacts 

of any new project or significant 

amendments to existing operations are 

identified through environmental impact 

assessments, covering social, economic 

and environmental risks and opportunities. 

In 2006, 12 impact assessments were 

initiated, submitted or approved, including 

operations acquired in 2006. The most 

material of these were for the McArthur 

River Mine conversion to an open cut 

zinc/lead operation and approval for the 

development of Goedgevonden, a major 

new open cut coal mine in South Africa. 

Monitoring and assessment 

All sites maintain an ‘aspects and impacts’ 

register identifying key environmental risks 

and the programmes and controls in place 

to manage these. Xstrata’s HSEC Assurance 

Programme independently audits every 

operation against our HSEC Management 

Standards at least once every three years, 

dependent on performance and risk 

profile. Specialist and legislative audits, 

together with external and internal 

environmental performance benchmarking, 

and self assessments are undertaken on a 

regular basis. 

Environmental incidents and remedial 

actions are reported to the Executive 

Committee on a monthly basis. Any 

category 3 (significant) incidents and 

above are reviewed by the Board HSEC 

Committee every quarter. In 2007, 

Xstrata’s commodity businesses are 

developing intensity measures for material 

impacts, to provide a more effective tool to 

measure our efficiency in the use of natural 

resources and reductions in waste products 

and emissions. 


Environment 

2006 Environmental incidents 

including Falconbridge 

Nickel 8% 

Alloys 4% 

Zinc 16% 

Coal 18% 


Copper 54% 

Environmental incidents 

The total number of environmental 

incidents increased from 619 in 2005 to 

1,143 in 2006 including acquired 

operations from the date of acquisition. 

On a like-for-like basis, stripping out the 

sites acquired during 2006, incidents 

increased from 619 to 684. The largest 

increase came from negligible (category 1) 

incidents, in particular from Xstrata 

Copper’s Las Bambas exploration site in 

Peru, where exploration activities 

increased substantially in 2006. The 

drilling programme doubled compared to 

the previous year, drilling 100,000 metres 

at three resource areas and undertaking 

initial drill testing at two additional 

prospective sites. In addition, full 

implementation of Xstrata’s reporting 

standards and sustainability database in 

late 2005 resulted in enhanced reporting 

of incidents year on year at this project. 

No category 4 (serious) or category 5 

(disastrous) incidents have occurred at 

Xstrata’s operations in the five years since 

Xstrata plc was created. However, in 2006 

we did not achieve our target of no 

category 3 (significant) incidents, with 

24 incidents recorded, compared to 20 

in the previous year. Half of all category 3 

incidents related to storm water releases 

at Mount Isa during tropical storms. 

Since 2001, considerable infrastructure 

improvements to storm water 

management have been made at Mount 

Isa Mines. During 2006, pumping capacity 

was upgraded to capture water for reuse 

on site and eliminate off site storm water 

discharge. Storage capacities have also 

been increased to eliminate uncontrolled 

releases where possible. Mount Isa is a 

long-standing, multi-use site in close 

proximity to the neighbouring community. 

As a result, water catchment areas are 

adjacent to existing infrastructure with 

short flow lengths, limiting opportunities 

for further upgrades to the water 

management system. We are examining 

other potential short-term and long-term 

solutions to eliminate storm water 

releases in the future, but recognise 

that this issue will require a longer 

timeframe to be resolved. 

Environmental incidents* Category 1 Category 2 Category 3 Category 4 Category 5 Group total 

2002 69 36 12 0 0 117 

2003 427 353 26 0 0 806 

2004 580 210 35 0 0 825 

2005 441 158 20 0 0 619 

2006 (excluding acquisitions) 534 127 23 0 0 684 

2006 (including acquisitions) 890 229 24 0 0 1,143 

*Including acquired operations from the date of acquisition

Environmental fines 

In 2006, four managed operations 

received environmental fines for a total of 

US$8,100. Two of these fines (US$6,400 

in total) related to an administrative error 

at Xstrata Alloys Rhovan and Wonderkop 

operations in South Africa, where 

environmental impact assessments had 

been lodged with and approved by the 

Department of Minerals and Energy, but 

not with the Department of Environmental 

Affairs and Tourism (DEAT). Activities were 

therefore commissioned without the 

relevant DEAT authorisation and this was 

declared, resulting in a fine of US$5,000 

at Rhovan and US$1,400 at Wonderkop. 

One fine (US$1,200) was received at 

Xstrata Coal’s Ravensworth operation, 

Australia, where a technical blast 

exceeded pressure limits of 120dBA. 

Breakdown of Category 3 Incidents (including acquired operations) Location 

13 Discharges of storm water off-site Mt Isa Mines (12); Lydenburg (1) 

4 Vehicle rollover resulting in spillage to ground* Ernest Henry Mines (2) (41 tonnes copper concentrate); 

Alumbrera (2) (10,000 litres diesel; 21 tonnes ammonium nitrate) 

2 Breaches of discharge water quality specifications McArthur River Mine; Kidd Metallurgical 

1 Off-site release of sewage* Mt Isa Mines (affected 22m3 area of soil) 

1 Product from coke works found off-site Mt Isa Mines 

1 Pipeline breach causing concentrate spillage* Alumbrera (approximately 25m3) 1 Spillage of concentrate from containment area* Alumbrera (80m3) 1 

24 

Discharge of diesel via storm water system* Townsville Port (up to 500 litres) 

*‘Significant spill’ under GRI G3 guidelines (eight in total) 

A further fine was received at the 

Townsville port in Australia from the 

Queensland Environment Protection 

Agency for US$500, following a diesel 

spill in the harbour from a valve 

malfunction on a diesel storage tank. 

A ‘root cause’ investigation was 

completed and improved maintenance 

and inspection procedures were 

implemented to prevent a re-occurrence 

of this spill. 

Environmental awards 

In Australia, Xstrata Coal was awarded 

the 2006 NSW Minerals Council’s 

Environmental Award in recognition 

of the rehabilitation of the New Wallsend 

site. This work has also been recognised 

by the NSW Minister for Minerals 

Resources as an outstanding example 

of mining rehabilitation. 

Xstrata Nickel’s Koniambo project is located 

in New Caledonia. In 2006, an Environmental 

Charter was signed with the Northern 

Province to develop effective, efficient and 

equitable measures for the protection and 

preservation of the environment 


Environment | Climate Change 

Climate change is a reality and requires a global response. Xstrata’s operations impact on climate change 

through energy consumption, greenhouse gas emissions from operations, including methane released from 

coal seams during mining activities, and as a major producer of thermal coal, which is used to generate 

power. 

CO2 equivalents 

by source 

Fossil fuels 11% 

Reductant 13% 

Methane 31% 

Xstrata CO2 equivalents 

(million tonnes) 

15 

10 

5 

0 

10.7 

16.6 

02 03 

16.2 

04 

Falconbridge CO2 equivalents 

(million tonnes) 

15 

10 

5 

0 

6.9 

14.5 

05 


Electricity 45% 

15.9 

06 

6.9 6.8 7.1 7.2 

02 03 04 05 06 

To address the global challenge of climate 

change, we recognise that we must reduce 

both our greenhouse footprint and 

intensity within our operations, through 

improved energy efficiency and the capture 

and use of coal seam methane. Coal is a 

carbon liability and as such, we must also 

work with customers to find solutions to 

reduce greenhouse gas emissions from 

burning coal. 

Nonetheless, we believe that coal will 

continue to play an important role in 

providing a reliable, cost effective and 

secure source of energy to fuel social and 

economic development, particularly in 

developing countries. The International 

Energy Outlook for 2006 estimates global 

energy demand to increase by 60% by 

2030 and fossil fuels will account for 88% 

of this. To meet this increasing demand, all 

forms of power generation will be required 

– fossil fuels, such as coal, oil and gas; 

renewable sources, such as wind and solar; 

and nuclear. 

As the largest export thermal coal 

producer, we have committed to taking a 

leadership role in working together with 

government, other industries, the scientific 

community, environmental groups and 

other stakeholders to develop 

technological solutions to reduce or 

eliminate the greenhouse gas emissions 

from burning coal. 

We are responding to the global challenges 

presented by climate change through: 

■ Energy efficiency programmes at our 

operations (see case study: Xstrata 

Coal identifies energy efficiencies and 

Energy efficiency section below); 

■ Capture of coal-seam methane and 

implementation of methane-powered 

electricity generation; 

■ Funding and collaboration in research 

to develop ‘clean coal’ technologies, 

to reduce the emissions from burning 

coal to generate electricity; 

■ Advocacy and engagement to 

encourage wider support and 

development of clean coal and near 

zero emission technologies; 

■ Examining the potential risks and 

challenges for our operations 

presented by climate change, including 

prolonged drought, extreme weather 

events and higher average 

temperatures in some areas. 

Our challenge is to improve energy 

efficiency while recognising that other 

sustainability objectives, such as increasing 

recycling, maximising metal recovery from 

declining ore grades and deeper pits and 

reducing SO2 emissions, require increased 

energy input. 

We continue to participate in the carbon 

disclosure project, publicly reporting on our 

actions to reduce our greenhouse footprint, 

our performance and the potential impacts 

of climate change on our business. 

Greenhouse gas emissions 

Greenhouse gas emissions (GHGs) 

increased by 10% to 15.9 million tonnes 

of CO2 equivalents (CO2-e) in 2006, 

excluding the former Falconbridge 

operations, compared with 14.5 million 

tonnes CO2-e in 2005. The increase was 

attributable to a 10% production increase 

at open cut coal mines following the 

commissioning of the new Rolleston 

thermal coal operation and the addition of 

the Tintaya copper operation from June. 

Indirect GHGs from energy purchased from 

power utilities accounted for 45% of the 

Group’s total. The majority of electricity 

purchased came from fossil fuel 

generation. In some countries, including 

Spain, hydro power also contributed a 

portion of the total purchased.

Methane from coal seams released during 

mining was the second largest contributor 

to greenhouse gas emissions, a similar 

proportion to the previous year. 

The former Falconbridge operations 

emitted a total of 7.2 million tonnes of 

CO2 equivalents in 2006 (including direct 

and indirect emissions), a similar level to 

the previous year. The lower level of 

emissions compared to Xstrata (despite 

higher overall energy consumption) reflects 

the fact that the former Falconbridge 

group did not mine coal and purchased a 

significant proportion of electricity from 

utilities using hydro or nuclear generation. 

Coal mining releases methane, a 

greenhouse gas with 21 times more global 

warming potential than carbon dioxide, 

from decayed organic matter in rock strata. 

Methane capture and 

power generation 

In 2006, Xstrata commissioned a second 

methane gas-fired power station with 

Envirogen, using methane extracted from 

the Oaky Creek coking coal mine in 

Queensland, Australia. Power generated by 

the 12MW station is supplied to the 

national grid and is expected to save 

around 341,000 tonnes of CO2-e per 

annum, or the equivalent of removing 

78,000 medium sized petrol driven motor 

cars from the road each year. 

Capacity at the Teralba power station, 

which was installed at a disused, former 

mine in 2004, was reduced from 8MW to 

6MW during 2006, as the rate of methane 

emitted from the operation declined. 

Together, these power stations prevent 

the emission of around 490,000 tonnes 

of CO2-e each year. 

In addition, Xstrata Coal is investing 

A$15 million to conduct methane drainage 

trials at its underground operations at the 

Bulga Complex in New South Wales, 

Australia. These trials are designed to 

provide a safe working environment and 

identify technologies and processes 

required to help maximise the recovery and 

beneficial use of coal seam methane from 

that site. 

We are also investigating technologies 

to oxidise methane in underground mine 

ventilation air, together with the viability 

of native forestation projects. 

All Australian operations have signed 

agreements and implemented plans in 

accordance with the Australian 

Government’s Greenhouse Challenge Plus 

programme. Through this programme, 

operations are required to: 

■ Reduce greenhouse gas emissions 

(including promotion of awareness 

of greenhouse gas abatement 

opportunities); 

■ Accelerate the uptake of energy 

efficiency; 

■ Integrate greenhouse issues into 

business decision-making; 

■ Provide more consistent reporting 

of greenhouse gas emissions levels. 

Reporting will commence in 2007. 

A significant component of Xstrata Coal’s 

greenhouse gas abatement strategy and 

Greenhouse Challenge Plus cooperative 

agreement is the capture and utilisation 

of methane in mine ventilation air. 

Energy efficiency 

A range of energy efficiency programmes 

are in place across our operations. Energy 

is one of the largest single costs within 

our business and, as such, efficiency and 

energy consumption reductions drive both 

cost savings and emissions reductions. 

Energy audits are regularly conducted at 

operations. Energy efficiency programmes 

are put in place for all major new projects 

and developments and procurement 

strategies include specific energy 

efficiency criteria. 

Xstrata Coal and Xstrata Copper are 

actively involved in the Australian 

Government’s Energy Efficiency 

Opportunities programme, implementing 

plans and measures to reduce the use 

of all forms of energy (see case study). 

Xstrata Nickel has invested heavily to 

develop Nickel Smelting Technology (NST), 

for use at the Koniambo project, New 

Xstrata CO2 equivalents 

by commodity 

Copper 9% 

Alloys 40% 

Zinc 9% 

Falconbridge CO2 equivalents 

by commodity 

Copper 15% 

Nickel 25% 

Energy source 

Diesel 27% 

Zinc 9% 

Coal 42% 

Aluminum 

51% 

Natural gas 3% Coke 2% 

Coal 4% 

Other 4% 

Electricity 

60% 

The Teralba power station uses methane from a 

closed underground coal mine, Australia 


Xstrata Coal’s New South Wales (NSW) division signed up as a trial company for the Australian Government’s Energy Efficiency Opportunities 

programme in 2005 and submitted Energy Savings Actions Plans to the NSW Department of Energy, Utilities and Sustainability. 

Energy efficiency opportunities assessments were conducted at eight mines in NSW, resulting in the development of a series of action plans. 

A total of 47 cost-effective projects were identified for immediate implementation, together with a number of additional projects that 

required more detailed assessment. 

By the end of 2006, 32 of the 47 immediate projects identified had already delivered quantifiable environmental and economic benefits. 


■ Annual energy saving of 13,686 GJ, a reduction of more than 1% of energy use across the sites; 

■ Consequently, a cost saving of 1% of energy costs; 

■ A reduction in greenhouse gas emissions of at least 3,700 tonnes CO2-e per annum. 

In addition, we expect the programme to achieve further reduction in energy costs: 

■ Cost savings of at least 1% of energy costs year-on-year over the next five years, as the remaining 15 cost effective projects are 

evaluated and approved and additional energy assessments are conducted; 

■ Medium term cost savings of 3-5% of energy costs as energy efficiency is integrated into future design decisions and business systems 

such as procurement and the development of key performance indicators. 

A key objective of the trial was to support culture change in energy management. A senior operational manager, Tony Egan, was appointed 

to drive the programme and attended each site meeting over an eight-month assessment process. External energy consultants were also 

used to assist the sites in prioritising and assessing potential projects. 

To embed the programme as an integral part of everyday business an assessment process was developed to help site personnel identify, 

evaluate and manage energy efficiency opportunities. This recognises that site operators and managers are best placed to understand the 

energy efficiency opportunities at each operation, together with the potential challenges and investment required to achieve these. 

Facilitated site workshops were held to identify a list of all possible energy efficiency opportunities, identifying 175 opportunities in total – 

typically around 30 to 50 projects per operation. A site-selected energy champion was appointed and each opportunity was allocated to a 

‘project owner’. Preliminary investigations were conducted within four weeks of the initial audit, to maintain momentum. 

Xstrata Coal realises energy efficiency opportunities

Following prioritisation and ranking, 125 of the 175 projects were identified as having potential. Of these, 47 ‘operational projects’ were 

identified with a payback period of less than four years, and energy efficiency savings have been quantified for 32 of these. 

Projects were split into two groups: 

■ process changes, such as automating lighting controls, improving conveyor controls and automating equipment shutdown. Typically 

these projects have a payback period of six months to two years, saving from A$20,000-A$65,000 per annum and can be implemented 

quickly to bring about incremental improvements in energy efficiency across the portfolio. 

■ technology changes, range from installation of high efficiency motors and variable speed drives, to the replacement of mainstream 

technology and unit processes with more efficient elements. Payback times are typically two to four years, with costs ranging from 

A$50,000 to A$8 million. The average reduction in energy use per dollar spent is 1MJ/A$, ranging from 0.5MJ/A$ to 9MJ/A$. Many 

of these projects are productivity projects which also result in energy efficiency outcomes. 

For each of the 44 other projects identified as showing promise, a set of actions were developed and a date identified by which a business 

decision will be taken. These projects will continue the momentum of the initial energy actions in the medium term. 

The direct costs of the assessments undertaken (including consultant fees and project manager) were paid for by the cost savings achieved 

in the first year. We are working to identify any indirect costs and benefits from the programmes as they progress over several years. 

Assessments have since been completed at the remaining four Xstrata Coal NSW sites, at six Queensland operations and will be rolled 

out at Queensland and South African operations this year. Operations managers are required to report on progress on a regular basis 

and improvements in energy usage and intensity will be tracked to measure the outcomes of the programme. 

Tony Egan, Xstrata Coal NSW Manager, Projects, said: “The opportunities identified at the eight trial sites are already being used in the 

design of new mines – both those currently under way and in our pipeline. Our aim is to bring about a step change in energy efficiency 

and to integrate energy planning at each stage of the life cycle of our mines.” 



Xstrata energy use 

(petajoules) 

47.6 

58.7 58.2 57.6 

02 03 04 05 05 

(restated) 

Falconbridge energy use 

(petajoules) 

84.6 

82.3 81.4 

55.4 


63.2 

06 

02 03 04 05 06 

Energy use by type 

Electricity 

Diesel 

Coal 

Natural Gas 

Coke 

Other* 

5% 

7% 

6 

3% 

3% 

3% 

2% 

2% 

2% 

4% 

1% 

1% 

84.0 

85.5 

27% 

24% 

21% 

*‘Other’ includes fuel oil, LPG non-transport, polyfuel, wood, naptha and petrol 

Caledonia. Nickel laterite processing is 

energy intensive. Using the NST process, 

which includes advanced technologies such 

as air and dust recycling and counter-current 

heat exchage, reduces GHGs and improves 

energy efficiency by over 80% compared 

to standard technology. 

Xstrata Alloys is the most energy intensive 

business within Xstrata, due to the 

ferrochrome production process. In 2006, 

Xstrata Alloys commissioned the new Lion 

smelting complex in South Africa, using 

Xstrata’s proprietary Premus technology. 

This technology was designed by Xstrata 

Alloys to reduce the energy intensity of 

ferrochrome production by up to 20% over 

existing technology. First production 

commenced at the operation in the third 

quarter of 2006. Once the operation has 

ramped up to full production, we expect 

the Lion project to have a beneficial impact 

on the operating costs and energy 

consumption associated with our 

ferrochrome production. 

Xstrata Technology’s products are designed 

to improve energy efficiency, improve 

recoveries and reduce operating costs at 

mining and metals operations globally, 

including at a number of Xstrata’s own 

operations. A number of sites are assessing 

the potential for implementing Xstrata 

Technology products to improve energy 

efficiency, reduce emissions and improve 

recoveries. For example, McArthur River 

2004 

60% 

59% 


67% 

Mine’s output is currently limited by 

electricity produced at the onsite power 

plant. Through installing two Xstrata 

Technology IsaMills, together with two 

capacitors, Xstrata Zinc has announced it will 

increase the capacity of the concentrator 

by almost 40% from the same generation 

facility and environmental footprint. 

In 2006, Xstrata’s operations (excluding 

Falconbridge) used 63.2 petajoules of 

energy, 14% higher than in 2005 (55.4 

restated from 57.6). Of the total energy 

consumed, 60% (37.7 petajoules) is 

indirect, derived from purchased electricity. 

The amount of energy from purchased 

electricity increased by 11% in 2006, from 

34.1 petajoules to 37.7 petajoules as a 

result of the commissioning of the new 

Lion ferrochrome smelting complex and 

the acquisition of Tintaya, which 

outweighed the impact of energy efficiency 

programmes at a number of operations. 

Total direct energy consumed at managed 

operations rose to 25.5 petajoules, 

compared to 21.3 petajoules in 2005. 

Diesel is the largest source of direct energy 

consumed, accounting for 27% of total 

energy consumed in 2006, and 67% of all 

direct energy consumed. The new Rolleston 

coal operation, the acquisition of Tintaya 

and a 10% increase in production from 

open cut coal mines contributed to the 

increase in energy consumption, together 

with increased diesel consumption at 

MRM in Australia, where mining is being 

converted from underground to open 

cut and construction of the open pit is 

under way. 


consumed 85.5 petajoules of energy in 

2006, 2% higher than in the previous year. 

Noranda Aluminum, which was sold by 

Xstrata in April 2007 and is no longer part 

of the enlarged Xstrata Group, accounted 

for around 30% of total energy use. 

Securing power supply 

Xstrata is developing a 30MW natural gasfired 

power station at Mount Isa within the 

mine lease, to provide a reliable short- to 

medium-term source of energy for planned 

expansions to Xstrata’s copper, zinc and

lead operations at the multi-use complex. 

The station is expected to be operational 

from October 2007 and will complement 

the existing gas-fired Mica Mine Power 

Station owned by Mount Isa Mines, which 

also uses waste heat from the copper 

smelter. Xstrata Copper’s Townsville 

refinery uses electricity generated from 

coal-seam methane. 

In December 2006, Xstrata subsidiary 

Energía Austral, acquired as part of 

Falconbridge, submitted an environmental 

impact assessment to construct a 600MW 

hydro-electric power plant at Rio Cuervo, 

Chile. In early 2007, the regional 

environmental authorities advised that 

the EIS did not meet its criteria and we 

are currently working with the relevant 

authorities to resubmit a revised EIS 

for the project. 

Clean coal technologies 

In total, Xstrata Coal will contribute over 

$75 million to support the development 

and demonstration of clean coal 

technologies over the next five years. 

In 2006, Xstrata Coal became a member 

of the FutureGen Alliance in the United 

States, committing US$25 million over 

10 years. The US$1 billion project aims 

to build a first-of-a-kind integrated near 

zero emission coal-fuelled power plant. 

FutureGen will use advances in integrated 

coal gasification combined cycle, carbon 

Clean coal technology: our contribution 

■ US$25m for FutureGen Alliance; 

■ Clean Coal Technology Levy (COAL 21); 20 Australian cents per tonne of saleable 

coal for five years 

■ CO2CRC contributions A$200,000 per year for seven years; 

■ Energy Futures Forum commitment of A$100,000 total (research project across 

industry examining emission reduction, trading and sequestration); 

■ CCSD (Cooperative Research Centre for Coal in Sustainable Development) 

A$50,000 per year for seven years; 

■ CO2 sequestration pilot project – Otway project, Victoria, Australia A$250,000; 

■ A$250,000 CS Energy oxyfuel feasibility project – now moving into 

demonstration phase. 

capture and sequestration and hydrogen 

production technologies to eliminate 

greenhouse gas emissions associated with 

coal utilisation. It is currently expected to 

be operational in 2012. 

Within Australia, Xstrata Coal has been a 

key player in orchestrating an industry 

agreement with other coal producers to 

voluntarily levy their coal production, to 

raise up to A$300 million over the next five 

years to help fund the development and 

demonstration of technologies for reducing 

greenhouse gas emissions from coal-fired 

power stations. The establishment of the 

COAL 21 Fund is a world first whole-ofindustry 

approach to greenhouse gas 

abatement. The Australian Prime Minister 

has described the COAL 21 Fund as “a 

significant investment and a world leading 

initiative demonstrating the Australian coal 

industry’s leadership and commitment to 

reducing greenhouse emissions while 

maintaining a secure, reliable and 

affordable energy supply.” 

One of the technologies already allocated 

funding support is oxy-fuel combustion, 

a near zero emission technology enabling 

the capture of carbon dioxide from 

conventional power stations. Xstrata Coal 

was a partner in a two-year $2 million 

feasibility study into this technology at 

CS Energy’s Callide plant in Queensland. 

We remain closely involved in this project 

which has now progressed to the 

Illustration of the coal-fuelled near-zero 

emissions FutureGen power plant


An arctic fox at the Raglan site in 

Northern Quebec. 

demonstration phase and is already 

attracting international attention given 

its potential to reduce greenhouse gas 

emissions associated with the use of coal 

in power generation globally. One of the 

key benefits of this technology is its 

potential to be retrofitted to existing coal 

fired power stations enabling the capture 

and ultimate storage of CO2. 

Xstrata Coal is also financially supporting 

the work of both the Cooperative Research 

Centre (CRC) for Coal in Sustainable 

Development (CCSD) and the CRC for 

Greenhouse Gas Technologies (CO2CRC). 

This is one of the world’s leading 

collaborative research organisations 

focused on carbon dioxide capture and 

geological storage (geosequestration). 

Xstrata is directly involved in and 

supporting Australia’s first carbon storage 

demonstration project, the largest such 

project in the world, now underway in 

the Otway Basin of Victoria, Australia. 

Advocacy and engagement 

An important element of our greenhouse 

gas strategy is to play an active role in 

advocating greater support of and 

advancement of clean coal technologies 


and research and development into other 

potential technological solutions. 

Xstrata Coal was a participant in the 

industry dialogue at the Asia-Pacific 

Partnership for Clean Development and 

Climate Ministerial meetings held in 

Australia in January 2006. This inaugural 

meeting brought together Ministers from 

significant producers and consumers of 

fossil fuels such as Japan, China, India, the 

Republic of South Korea, the United States 

and Australia to address the challenges of 

climate change. 

Also in 2006, Peter Coates, Chief Executive 

Xstrata Coal, was invited to join the 

Australian Prime Minister’s Emissions 

Trading Task Group, which unites 

Government and industry to advise on the 

nature and design of a workable global 

carbon trading scheme. 

Xstrata representatives attended a number 

of meetings and presented at conferences 

to discuss the potential for clean coal 

technologies and the imperative to advance 

research, development and testing of these 

technologies to achieve deep cuts in 

greenhouse gas emissions while sustaining 

economic and social development globally. 

Xstrata Coal has also produced a climate 

change brochure, together with 

communication material for Xstrata Coal 

employees, government and other 

stakeholders, to explain our approach and 

initiatives in playing our part in reducing 

global greenhouse gas emissions. 

Impact of climate change 

on operations 

A number of the enlarged Xstrata Group’s 

operations are located in arid areas, where 

further prolonged drought conditions could 

limit production growth, or existing 

operations in extreme cases. These include 

operations in some areas of Queensland, 

Australia and north Chile. We also have 

operations in southern hemisphere regions 

that are at risk of cyclones or severe storm 

events. There is some evidence that climate 

change will increase the severity and 

frequency of these extreme weather events, 

potentially disrupting operations and 

damaging infrastructure and equipment. 

Xstrata’s products are dependent on 

shipping for transport to customers and 

markets. Any increased disruption of 

shipping could lead to increased insurance 

costs and delays to shipments. 

The financial impact of climate change on 

our business today is impossible to calculate, 

given that many of these risks involve 

long-term changes to weather and climate 

patterns. Nonetheless, we are examining 

the potential risks to our business and, 

where appropriate, implementing 

mitigation strategies. Examples of this are 

initiatives to improve the management of 

tailings storage facilities to prevent failures 

in extreme weather events, appropriate 

flood defences and insurance cover. 

One operation that is particularly exposed 

to warmer average temperatures is Xstrata 

Nickel’s Raglan mine, in the Canadian 

Arctic. Permafrost is a critical element to 

Raglan’s tailings design, storage and 

management. Predictions of climatic 

warming mean that the current storage 

arrangements, which rely on year-round 

permafrost, may not be sustainable in the 

long-term. To assess the most appropriate 

response to this risk and to identify any 

further risks from predicted changes in 

average temperatures, Raglan has 

established the Raglan Climate Change 

Committee. This is a multi-stakeholder 

committee consisting of representatives 

from Raglan, representatives of academic 

institutions and engineering and science 

consultants. The ultimate objectives 

of the Committee are to review and 

benchmark the sustainability of the Raglan 

tailings disposal methodology annually, 

based on available scientific and global 

warming information and research 

and advise the operation on best 

practices in the short and long term 

to ensure sustainability.

Water Management 

A number of Xstrata’s operations are located in arid regions where water is constrained. This includes 

coal operations in the Bowen Basin and Ernest Henry copper mine in Queensland, Australia. Former 

Falconbridge sites in arid areas include Lomas Bayas, Altonorte and the non-managed Collahuasi copper 

mine (in which Xstrata has a 44% interest) in north Chile, together with Brenda Mines, a closed site in the 

Okanagan Valley, Canada. A number of other operations are located in water abundant areas, where water 

quality, effluent treatment and control of discharges are material issues. 

Raw water use increased by 14% to 85,600 

megalitres (ML) in 2006 compared with 

75,300 ML in 2005 at Xstrata’s managed 

operations (excluding Falconbridge). Half of 

Xstrata’s raw water consumption is from 

groundwater (including rainwater), 44% 

from surface water (including water from 

rivers and lakes) and 6% from potable 

water (municipal water supplies or other 

water utilities). 

Xstrata Coal’s New South Wales operations 

reported the largest increase in raw water 

use, due to substantial dewatering at Ulan 

underground mine during 2006, along 

with improved measurement at New South 

Wales operations. Limited groundwater 

availability due to the ongoing drought 

conditions in New South Wales led to an 

increase in surface water use, in particular 

from the Hunter River. 

The inclusion of the Tintaya operation in 

Xstrata raw water use 


Zinc 14% 

Coal 33% 

Alloys 8% 

Falconbridge raw water use 


Copper 14% 

Aluminum 8% 

Zinc 37% 

Copper 45% 

Nickel 41% 

Peru from June 2006 was the principal 

reason for a 20% increase in raw water 

use by Xstrata Copper operations. 

In South Africa, Xstrata Coal operations 

continued to increase the proportion of 

recycled water used for dust suppression, 

reducing raw water consumption. Water 

consumption decreased at Xstrata Alloys 

by 14%, due to a number of ferrochrome 

furnaces being suspended during the period. 

A number of Xstrata Coal Queensland 

operations are located in the Bowen Basin, 

Australia, a water-constrained area with 

a number of significant industrial users. 

These operations reduced raw water 

consumption by 12% despite a 15% overall 

increase in production. This was achieved 

through the increased use of recycled water 

and the implementation of water efficiency 

programmes (see case study: Oaky Creek 

Coal Becomes ‘Water Wise’). 

Overall, Xstrata’s operations continued to 

increase use of recycled water year on year. 

In 2006 recycled water use increased by 

2% to 101,300 ML. The most significant 

increase was from Xstrata Coal South 

Africa, through improved recycling of 

water for processing and dust suppression. 

At Minera Alumbrera in Argentina, a new 

water recovery system is being 

implemented to recover water from the 

surface of the mine tailings dam and 

reduce raw water consumption from the 

Campo del Arena. 


consumed 107,219 ML of water (excluding 

recycled water) compared to 123,436 ML 

in 2005. Recycled water use increased 

from 100,092 ML to 105,266 ML in 2006. 

These figures are not directly comparable 

with Xstrata’s reported water use. All 

Raw water use † 

(megalitres) 

18,300 

67,100 

02 03 04 05 06 

† Xstrata excluding Falconbridge 

Recycled water † 

(megalitres) 

34,400 

89,000 

74,900 75,300 

85,600 

02 03 04 05 06 

† Xstrata excluding Falconbridge 

92,900 98,900 101,300 

Xstrata managed operations, including 

those acquired from Falconbridge, are 

reporting according to GRI guidelines 

in 2007. 

Xstrata’s operations (excluding 

Falconbridge) discharged a total of 

7,258 ML in 2006 compared to 7,742 ML 

in the previous year. 


The Bowen Basin in Queensland, Australia is home to a rich coal mining industry, including Xstrata Coal’s Oaky Creek mine. It is also an 

area where water is becoming increasingly scarce. Drought conditions over the past several years are causing regulators to reduce water 

allocations and water scarcity has become a key factor in the approval of any new mine and the expansion of existing ones. 

The Oaky Creek mine shares a water source and water allocation with the nearby town of Tieri, a mining community of 2,000 Oaky Creek 

employees, family members and service providers. In 2005, the mine and town were forced to use a portion of the following year’s 

allocation, reducing the amount of water available in 2006. In addition, water levels at the main water source, the Fairburn Dam, dropped 

to 12% of its capacity level in 2006, as a result of several consecutive years of drought. 

To tackle this material challenge to the operation, Oaky Creek set an aggressive target to reduce raw water use by 10%, or 305 million 

litres, from 2005 levels, to operate within the reduced 2006 water allocation and reduce costs associated with pumping raw water. 

Conservation efforts were underpinned by the ‘water wise’ campaign, which was extended beyond the mine to include the town, and was 

comprehensively marketed, involving a number of initiatives. 

At the mine, these initiatives included water management meetings, supported by ‘tool box’ talks at the operational level. At the meetings, 

representatives from business areas across the operation review conservation strategies and monthly water statistics. Raw water use is 

monitored as a key performance indicator, reviewed by management on a monthly basis. 

Increased awareness amongst employees led to a number of initiatives being implemented. For instance, water from heavy vehicle washing 

is re-used to wash coal, rather than going to an evaporation pond. Solenoids (electromagnetic devices) were installed on some conveyor 

sprays to prevent them from running continuously. Other conveyors were converted from raw water to pit water. An operation-wide effort 

was made to improve leak detection and prevention and flow-meters were installed on equipment.

Oaky Creek Coal becomes ‘water wise’ 

Community stakeholders were actively engaged in the town of Tieri and Xstrata Coal personnel erected a large sign promoting water 

conservation at the town entrance and distributed letterbox flyers to residents. 

A major review of the town’s public green areas, ovals and parks was undertaken by Xstrata in partnership with Spotless and the town 

council, and watering times were reduced and re-scheduled to more efficient times of day. Rain delay sensors were installed on some 

sprinkler systems. Construction of the Water Wise Garden Trail also began in 2006, with the project aiming to remove more than 

120 sprinklers. 

In its first year, the water wise conservation effort has surpassed the 10% target, reducing raw water use by 13% (398 million litres) 

compared to 2005. Oaky Creek has set a further reduction target of 10% for 2007. Specific initiatives include approaching high waterusers 

in Tieri to analyze their water use and to reduce water consumption using a consultative approach. 

At a divisional level, Xstrata Coal Queensland is examining ways to build on the success at Oaky Creek and Tieri and to reduce raw water 

use further across all sites including investigating implementing a ‘Water Tight Town – Water Wise Workforce’ programme. This initiative, 

run by The Sustainable Minerals Institute at the University of Queensland, is designed to improve town water management through 

reduced import of fresh water, large water re-use, effective systems of rainwater capture, reducing water loss caused by leaks and other 

activities. In addition, a risk-based study of water use has been undertaken and will be completed in the first quarter of 2007. This will allow 

each operation to evaluate water use more accurately and will inform a water management strategy for the entire business. 


Environment | Air Emissions 

Sulphur dioxide 

Xstrata’s principal emission to air is sulphur dioxide (SO2). The majority of sulphur dioxide emissions are 

from the Mount Isa complex which comprises copper, zinc and lead operations. 

2006 Sulpher dioxide emissions 


Xstrats Alloys 3% 

Xstrata Nickel 

11% 

Xstrata 

Zinc 32% 


Xstrata 

Copper 54% 

Xstrata Copper 

Kidd Creek mine in winter snow, Canada 

Taking a dust sample at McArthur River 

Mine, Australia 

Overall Xstrata’s SO2 emissions (excluding 

Falconbridge) increased by 14,324 tonnes 

or 6% compared with 2005 to 252,888 

tonnes. SO2 emissions at Mount Isa 

copper-zinc-lead complex increased by 

14,726 tonnes or 6.6% compared 

with 2005 to 238,393 tonnes. This 

performance comprises a 23% increase in 

SO2 emissions from the copper smelter 

and an 8% decrease in SO2 emissions 

from the lead smelter. Emission levels are 

broadly in line with changes in production 

levels year-on-year. 

Overall the Mount Isa copper smelter has 

decreased SO2 emissions by 400,985 

tonnes per annum or 76% over the 2000 

baseline level, following the installation of 

SO2 capture technology at the smelter. The 

SO2 is converted into sulphuric acid at the 

adjacent third-party managed acid plant. 

Xstrata Copper is targeting an increase 

from 80% to 95% capture and treatment 

of SO2 emissions from the copper smelter 

against the baseline established in 2000. 

In 2006 our emission reduction programme 

included the start of progressive hood 

installations to the four copper smelter 

converters, and pressure balances to 

identify leaks in the ducting and ventilation 

system. These efforts have contributed 

significantly to reducing fugitive emissions 

of SO2 to the atmosphere. The programme 

has produced improved coordination 

between the acid plant and copper smelter, 

as well as enhanced process control and 

acid plant efficiency. 

The lead smelter at Mount Isa has achieved 

a reduction of 23,279 tonnes per annum 

(18%) in SO2 emissions since 2000. In 

2006, a new cooling water system was 

installed to allow improved process control 

in the furnace. Improvements to the quality

Xstrata sulphur dioxide emissions (tonnes) 

Mt Isa Copper 

Mt Isa Zinc/Lead 

*Altonorte 

*Sudbury Smelter 

*Horne Smelter 

*Brunswick Smelter 

Carbon Group 

*Kidd Metallurgical 

*CEZinc 

Rhovan 

San Juan De Nieva 

Chartech 

Alumbrera 

Lydenburg Chrome Smelter 

Nordenham Zinc Plant 

Rustenburg Chrome Smelter 

*Falcondo (from process only) 

*Nikkelverk 

*CCR 

Hinojedo Roasting Plant 

Boshoek Chrome Smelter 

Wonderkop Chrome Smelter 

Northfleet Lead Plant 

*acquired operations 

0 

6,762 

8,027 

6,517 

6,647 

6,492 

4,961 

5,489 

2,865 

4,395 

1,632 

1,726 

887 

0 

739 

774 

539 

554 

533 

495 

517 

711 

442 

587 

232 

187 

215 

435 

133 

133 

73 

498 

56 

146 

4 

23 

of feeds for the lead smelter also further 

reduced emission levels, with improved 

coke quality during 2006 leading to 

improvements in the furnace performance 

and smelting reactions. A feasibility study is 

being undertaken to assess the viability of 

implementing Xstrata Technology’s 

ISASMELT technology at the zinc-lead 

smelter at Mount Isa, to achieve further 

reductions in emissions. 

The former Falconbridge operations emitted 

a total of 130,700 tonnes of SO2 in 2006. 

The Altonorte smelter in Chile and the 

Sudbury Smelter in Canada are the most 

significant sources of sulphur dioxide 

emissions from the acquired operations. 

29,980 

22,656 

41,134 

41,846 

40,328 

40,839 

An environmental upgrade project will 

commence at the Altonorte smelter in Chile 

in 2007 to improve performance. This will 

include the installation of a doubleabsorption 

contact process in the new acid 

plant, secondary hoods to catch fugitive 

gases and a dust-leaching plant to process 

stockpiled dust at the site as well as new 

dust resulting from continuing operations. 

Production of sulphuric acid will rise to 

1.2 million tonnes a year from 775,000 

tonnes, with emissions capture reaching 

95% compared to 93.5% previously. 

In 2006, Sudbury Smelter initiated an 

emissions dispersion modelling site 

assessment for ambient air and noise 

105,112 

108,721 118,553 


129,672 

and is targeting further reductions in SO2 

emissions to less than 25,000 tonnes per 

annum by 2015, a reduction of almost 

40% over 2006 levels. 

Oxides of Nitrogen 

Oxides of nitrogen (NOx) are by-products 

of burning fossil fuels, primarily in vehicles 

and generators with diesel fuelled engines 

and are emitted from the exhaust. Xstrata 

consumed 13.9 million tonnes of diesel 

in its operations in 2006, an increase of 

1.6 million tonnes (12.7%) compared 

with 2005. Stack emissions of oxides of 

nitrogen remained at a similar level to the 

previous year at 1,193 tonnes compared 

to 1,112 tonnes in 2005. 


Environment | Biodiversity Conservation 

We actively conserve biodiversity and integrate biodiversity conservation plans into environmental impact 

assessments and management plans at each stage of the life cycle of our operations. Xstrata’s HSEC 

Standard: Biodiversity and Land Management requires all operations and projects to identify biodiversityrich 

and sensitive areas systematically and to implement biodiversity conservation plans. All but three 

operations implemented plans in 2006. These sites are implementing the plans in the first half of 2007. 

All managed Xstrata operations and projects (excluding Falconbridge) have developed biodiversity 

conservation plans with all but three sites implementing plans by the end of 2006. We do not explore or 

mine in World Heritage properties, which are sites identified by the UNESCO World Heritage Committee. 

All acquired operations will develop and implement biodiversity conservation plans by the end of 2008. 

Biodiversity conservation 

Biodiversity-rich habitats 

Xstrata owns, leases or manages 8,829 

hectares of land in or near biodiversity-rich 

areas. In 2006, the Rolleston coal mine 

(Australia) was reclassified to include the 

entire mining lease as an area adjacent to 

a protected area (5,632 hectares from 

Biodiversity-rich habitats: 

Xstrata managed operations adjacent to biodiversity-rich habitats 

Area (ha) of IUCN 

Operation Location Protected area operation lease category Ecological sensitivity 

Rolleston Mine (coal) Bowen Basin, Albinia 5,632 II Adjacent to Albinia National Park and operating 

Queensland, Australia National Park in areas with endangered bluegrass community 

Gaspé smelter 

(closed copper 

mine and smelter) 

Quebec, Canada Parc de la Gaspésie 2,397 II Mine/smelter adjacent to a provincial park 

Magnola 

magnesium (care 

and maintenance) 

Quebec, Canada Étang Burbank 800 III Smelter adjacent to a wetland 


430 hectares previously). Two former 

Falconbridge operations in Canada are 

also adjacent to protected areas, the 

closed Gaspé smelter, a former copper 

mine and smelter (90,000 hectares) and 

the Magnola magnesium operation 

(67 hectares) which is on care and 

maintenance. 

■ National protected areas as defined by IUCN, registered with the World Conservation Union and managed in accordance with the 

IUCN protected areas management categories I-IV; and/or 

■ Globally identified sites of significant international or global value that are recognised by: 

■ UNESCO World Heritage Convention 

■ Ramsar Convention on Wetlands of International Importance; and 

■ UNESCO Man and Biosphere Reserves Programme. 

Sensitive sites 

Sensitive areas are defined as areas which, while not protected or recognised as biodiversity-rich habitats, include one or more of the 

following characteristics: 

■ High species diversity or high levels of endemism; 

■ Contains species included in the IUCN Red List of Threatened Species (regionally extinct, critically endangered, endangered, vulnerable 

and near-threatened species); 

■ Rare, vulnerable and threatened habitats or ecosystems (e.g. wetlands).

Xstrata managed operations in or adjacent to sensitive sites 

Operation Location Ecological sensitivity 

Mount Owen Mine (coal) Hunter Valley, Ravensworth State Forest (IUCN category VI). Expansion will impact 35 hectares of 

New South Wales, 

Australia 

State Forest and 56 hectares of native woodland (offset established) 

United mine (coal) Hunter Valley, 207 hectares are of high habitat value. This includes a 30 hectare compensatory habitat area 

New South Wales, for five species of conservation significance with six mammals and four bird species listed 

Australia under NSW Threatened Species Conservation (TSC) Act and an additional seven migratory 

species listed under the EPBC Act. Fauna assemblages and listed species have also been 

identified in an additional 177 hectares. This area also allows a linkage between the Wollemi 

National Park and Wollombi Brook 

Westside Mine (coal) Newcastle, Threatened species: Tetratheca juncea 

New South Wales, Endangered ecological community: Sydney Coastal Estuary Swamp Forest Complex 

Australia (offset programme established) 

Bulga mine (coal) Hunter Valley, Multiple conservation areas with high aboriginal heritage significance including numerous 

New South Wales, artefacts scattered throughout 4 zones and 55 significant grinding grooves on part of 

Australia Loders creek. Habitat for several threatened species such as the eastern bent-wing bat, 

eastern free-tail bat, grey-crowned babbler, speckled warbler, hooded robin, diamond firetail, 

brown treecreeper and masked owl 

Oaky Creek, Newlands 

and Collinsville (coal) 

Queensland, Australia Sensitive areas including endangered brigalow communities 

McArthur River Mine Northern Territory, Species identified in areas potentially affected by or adjacent to the conversion to open 

(zinc lead) Australia cut operations include: 

Endangered: Freshwater sawfish 

Near threatened: Carpentaria grass wren; spectacled hare wallaby; purple-crowned fairy 

wren; white-browed robin; grey falcon; Worrell’s turtle 

Vulnerable: Australian bustard 

Tweefontein (coal) Witbank, South Africa Vulnerable: Giant bullfrog; Bald ibis 

Kroondal Mine Rustenburg, Adjacent to wetlands area (although not a protected area or listed in RAMSAR convention 

(chrome) South Africa on wetlands of international importance) 

Horizon Mine Pilansberg, Protected species or species of concern: Gladiolus, Scadoxus, Sclerocarya and Euphorbia spp. 

(chrome) South Africa Data deficient: Lemniscomys rosalia (single-striped mouse) 

Rietvly Mine (silica) Rustenburg, Protected fern species Pellea, Cussonia; Tristachya biserata (previously listed as 

South Africa a red data grass species); 

Near threatened: Leptailurus serval (Serval) 

Data deficient: Lemniscomys rosalia (single-striped mouse) 

Rhovan (vanadium) Brits, South Africa No endangered, rare or vulnerable species were recorded. Endangered species that may 

potentially occur within Rhovan area were identified by using National Botanical Institute 

Research information and the Red Data List for plants of South Africa. these include: 

Endangered: one bird species 

Near threatened: six plant species, 15 bird species 

Rare: three plant species, two mammal species 

Vulnerable: 10 bird species, five mammal species 

Least concern: one plant species 

Xstrata Alloys Eastern Steelpoort, Endemic ‘red list’ species within or adjacent to the lease area: 

Mines (Thorncliffe South Africa Short stem carnation weed; Sekhukhune (Bushman’s-tea); Blue Shield Fruit; 

and Helena chrome Red Ivory (Rooi-ivoor); Sekhukhune Elephant-root (Sekuhunebasboontjie); 

mines and Mototolo Cicada Pycna Sylvia (rare but not on IUCN red list due to insufficient data) 

platinum group metals) 


Environment | Biodiversity Conservation and Rehabilitation 

Xstrata managed operations in or adjacent to sensitive sites continued 

Operation Location Ecological sensitivity 

San Juan de Nieva Asturias, Spain Herbaceous vegetation: 

Smelter (zinc) Sensitive to habitat alteration: Crucianella maritima 

Endangered: Linaria supina 

Amphibian: 

Vulnerable: Hyla arborea, Rana perezi 

Birds: 

Sensitive to habitat alteration: Haematopus ostralegus 

Special interest: Hydrobates pelagicus, Riparia riparia 

Vulnerable: Numenius arquata 

Tintaya (copper) Espinar, Peru Endangered: Puya (Puya raimondii Harms) 

Near threatened: Chilean flamingo (Phoenicopterus chilensis), Giant Gallareta 

(Fulica gigantean) 

Vulnerable: Parihuana or Andean flamingo (Phoenicoparrus andinus), Common Bandurria 

(Theristicus melanopis) 

Nordenham (zinc) Nr Bremerhaven, Nordenham’s jarosite pond is located inside an area proposed as a protected area under 

Germany the European Union directive for protection of birds. One near-threatened species and six 

least concern species have been identified. Further studies are under way 

Koniambo (nickel) New Caledonia The project is within a region containing endemic species, and ecosystems including moist 

evergreen forest, swamp forest, savannah, mangroves and coral reefs. IUCN Red List species 

identified include three freshwater fish species, 50 plant species, two vulnerable reptiles, 

seven birds, three mammals, one shark, two marine fish, two vulnerable marine mammals, 

and four endangered or critically endangered turtles. 


Mount Isa Mines (Australia) has identified 

habitat areas for the capentarian 

grasswren (IUCN category ‘Near 

Threatened’) to the north of mining lease 

and freshwater crocodile (IUCN category 

‘Least Concern’) at Lake Moondarra, 

Mount Isa’s water supply dam which is 

located on the Mount Isa Mines lease. 

Mount Isa’s current and planned future 

operations are not expected to impact on 

these habitats. 

A number of options have been identified 

for potential biodiversity offset projects 

at MRM in Australia through the 

environmental impact assessment and 

approval process for its conversion to an 

open pit. An evaluation process is currently 

under way to assess the costs and 

biodiversity benefits of these options to 

aid selection of the most appropriate site. 

The programme will be established in 

partnership with the Northern Territory 

government, community members and 

environmental groups. A trial nursery area 

has also been established to assist with the 

rehabilitation of the river diversion works. 

This area will be used to trial the 

germination of various native species. 

Extensive environmental baseline studies 

including biodiversity assessments were 

completed or are ongoing at the Las 

Bambas, Kabanga, Koniambo and Araguaia 

project sites. A comprehensive biodiversity 

management plan will be developed as the 

Koniambo project moves from its feasibility 

phase to minimise environmental and social 

impacts and make a positive contribution to 

biodiversity conservation. 

The Araguaia nickel project in Brazil is 

pioneering exploration and progressive 

reclamation techniques that minimise the 

impact of exploration drilling on the 

sensitive tropical forest areas in which they 

operate. Bulldozing of roads and platforms 

is kept a minimum through carrying in drill 

equipment and manual slashing to prepare 

the drill site. At the completion of drilling, 

nearby leaf litter containing seeds is spread 

on the drill site to rehabilitate the site with 

native vegetation. At year end, 97% of the 

drill sites had been rehabilitated.

Rehabilitation and closure 

Land rehabilitated/disturbed 

Xstrata manages 1,174,579 hectares of 

land, including 615,989 hectares of land 

owned freehold (internal and external to 

mining leases) and 558,590 hectares of 

land leased. All operations are required to 

rehabilitate disturbed land progressively. 

With the exception of sealed sites, such as 

smelters and refineries, all our operations 

have procedures in place to ensure that 

disturbance is minimised and once 

activities cease, land is rehabilitated to an 

agreed land use. 

In 2006, Xstrata’s operations and projects 

(excluding Falconbridge) disturbed 1,734 

hectares of land, 19% less than in the 

previous year. A total of 992 hectares 

rehabilitated in 2006. Xstrata Coal 

operations accounted for 86% of land 

rehabilitated and 78% of land disturbed. 

Falconbridge operations rehabilitated 400 

hectares of land in 2006, compared to 28 

hectares of land disturbed. 

Closure planning 

Every managed operation maintains a 

closure plan which is reviewed at least 

annually and includes closure cost 

estimates. The anticipated costs of 

rehabilitation and restoration of mining 

activities are provided for throughout the 

life of operations. As the anticipated 

closure date of the mine approaches, 

comprehensive plans are integrated into 

the closure plan to address identified 

social, labour, environmental and 

economic issues associated with closure. 

Closure plans for each managed operation 

are independently assessed through the 

Xstrata HSEC Assurance Programme. 

Detailed closure guidance for sites is 

developed by each commodity business, 

in line with Group expectations. In 2006, 

Xstrata Coal implemented a detailed mine 

closure planning standard for its global 

operations. This sets the requirement for 

closure plans including social, physical and 

economic aspects. All managed coal 

operations will comply with this standard 

by the end of July 2007. Xstrata Copper 

is currently developing a closure plan 

guide for all operations to be rolled out 

this year. 

Provisions for rehabilitation costs increased 

to $1,080 million as at 31 December 

2006, including $656 million from 

acquisitions in 2006. These costs are 

expected to be incurred over the next 

24 years. 

Some jurisdictions also require a bond, 

typically a bank guarantee, which is 

provided to government to cover closure 

Land disturbed vs land rehabilitated 

2500 

2000 

1500 

1000 

500 

0 

1,654 

610 

2,362 

659 

2,142 

1,122 

03 04 05 06 

Cacti at El Morro copper project, Chile 

1,734 

992 

Land disturbed (ha) Land rehabilitated (ha) 


Sudbury Soils Study 

The Sudbury Soils Study is one of the 

largest human health and ecological risk 

assessment studies ever conducted in 

Canada. It was initiated in 2001, after the 

provincial Ministry of the Environment 

(MOE) identified elevated levels of nickel, 

cobalt, copper and arsenic in Sudbury soils 

and recommended further study. While 

the study aims to assess fully any risks 

relating to human health and 

environmental risks, based on previous 

studies of similar nature in other Ontario 

communities, both the MOE and the 

Sudbury District Medical Officer of Health 

believe that there is no immediate risk to 

human health due to metal levels in 

Sudbury soils. 

The Sudbury Soils Study was advanced 

significantly in 2006 with the submission 

of the draft human health risk assessment 

for scientific peer review in September. 

The other major study component, an 

ecological risk assessment, was submitted 

for peer review early in 2007. 

Xstrata Nickel (formerly Falconbridge) and 

Inco (now CVRD Inco) have mined the 

Sudbury Basin in Northern Ontario since 

the early 20th century, and continue to 

have significant operations there. Both 

companies voluntarily accepted the MOE’s 

recommendation and joined an open 

study process involving four other 

community partners: the MOE, the 

Sudbury & District Health Unit, the City of 

Greater Sudbury, Health Canada First 

Nations and Inuit Health Branch. A 

dedicated website provides the wider 

community with regular updates. 

The study partners sit on a Technical 

Committee, with decisions made by 

consensus. An independent party chairs 

the meetings and an independent process 

observer attends meetings to represent 

the interests of the general public and the 

environment. The observer regularly 

reviews the study process and reports to 

the public on a regular basis via the study 

website. A Public Advisory Committee 

(PAC) represents citizens’ interests in the 

study, and a PAC member attends 

Technical Committee meetings and 

provides input on the study process. There 

are regular PAC Open Houses where 

Sudbury community members can receive 

updates on the study process. 

The scientific study itself is independently 

administered. An independent consortium 

of experts has conducted the scientific 

fieldwork and data analysis and reports its 

findings to the Technical Committee. More 

than 10,000 soil samples have been 

collected and analyzed on identified 

chemicals of concern, creating tens of 

thousands of data points. Samples were 

also collected of air, dust, local foods and 

market baskets. 

Selection of scientific reviewers for the 

2006 peer review of the draft human 

health risk assessment was conducted by 

an independent party, Toxicology 

Excellence for Risk Assessment, and a 

public briefing was held to introduce 

panel members to the public and to 

explain the peer review process. Following 

the public briefing, and prior to the 

delivery of an independent peer review 

report, the panel publicly stated that it 

found the risk assessment to be very 

comprehensive and included extensive 

sampling in the community. The panel 

also stated that the assessment 

appropriately considered all sensitive 

groups of the population and possible 

exposure pathways. 

Following detailed feedback from the peer 

review panel, the human health risk 

assessment will be released to the general 

public in 2007. It is anticipated that the 

ecological risk assessment will be publicly 

released later in 2007. As an active 

participant in the study process, Xstrata 

Nickel is committed to respecting the 

results of the study, and if necessary, 

taking appropriate action should any 

unacceptable risks be identified. 

More information is available at 

www.sudburysoilsstudy.com.

costs or maximum liability over the term 

of the operating plan. In South Africa, 

the rehabilitation trust fund is used to 

accumulate funds for rehabilitation 

liabilities relating to South African coal 

operations. Following completion of 

rehabilitation work and approval from the 

Department of Minerals and Energy, 

amounts are paid out from the fund. 

The trust fund is carried in our accounts 

at fair value and in 2006 amounted to 

$36 million. 

Closed sites 

A total of 44 closed copper, aluminum, 

zinc or nickel operations sites requiring 

ongoing management were acquired as 

part of the Falconbridge acquisition. 

All but four closed sites are situated in 

Canada, with the remainder located 

in the United States. 

The majority of costs associated with 

these closed sites relate to the ongoing 

collection and treatment of water. Over 

90% of closed site costs are associated 

with nine closed operations and two 

operations that are planning for near-term 

closure. 

During the integration of Falconbridge, 

Xstrata’s teams assessed closed sites and 

found that a strong formal closure plan 

development and review process existed 

for Falconbridge operations. The former 

Falconbridge business managed closed 

sites through a dedicated, centralised 

reclamation group. 

In line with our devolved management 

model, which emphasises the 

responsibility of global commodity 

businesses for all elements of operational 

performance, we decided to devolve the 

reclamation process and existing closed 

sites into the relevant commodity 

businesses. This management model 

provides greater ownership and a ‘whole 

of business’ approach. 

Xstrata’s commodity businesses are 

mandated to identify commercial 

opportunities and potential risks, to 

minimise the financial, environmental and 

reputational liability associated with the 

management of closed sites. This includes 

examining alternative technologies for 

ongoing environmental management, 

assessing commercial options for future site 

use and engaging with government, local 

communities, the scientific community and 

other stakeholders to review and improve 

management procedures. 

Waste and tailings management 

All operations reuse, recycle or properly 

dispose of waste generated, minimising 

waste sent to landfill and maximising 

recycling and reuse opportunities, including 

within the operation, for example using 

waste rock for backfill. 

Xstrata’s operations generated 959 million 

tonnes of waste in 2006 compared to 

638 million tonnes in 2005. Every managed 

operation has an active waste management 

plan to reduce the production of waste at 

the source and optimise the reuse and 

recycling of wastes. Waste management 

operations will be consolidated into the 

formal waste management plans by 

the end of 2007. Waste from mining 

operations consists primarily of overburden 

rock, stripped from open cut mines to 

expose ore or coal. The development of 

new mines in 2006 increased the amount 

of overburden removed, which accounted 

for 98% of the total year-on-year increase 

in waste produced. 

Tailings, coarse reject and slag accounted 

for 99.7 million tonnes of waste in 2006, 

of which 3.6 million tonnes were recycled. 

Hazardous waste, as defined by the Basel 

Convention 1992, (including 

hydrocarbons, heavy metal contaminated 

sludges, medical waste and vehicle 

batteries) rose to 1.4 million tonnes in 

2006, up from 1 million tonnes the 

previous year. Over 54% or 767,000 

practices at the former Falconbridge Tailings dam at Minera Alumbrera, Argentina 


Environment | Waste and Product Stewardship 

Total waste produced by type* 

(959 million tonnes) 

Tailings, course reject 

and slag 10% 

*Xstrata excluding Falconbridge 

Xstrata hazardous waste* 

(1.4 million tonnes) 

1,600,000 

1,400,000 

800,000 

400,000 

0 

05 06 

*Xstrata excluding Falconbridge 

Hazardous waste, general 

waste to landfill 

and other 

(quench ash) 

1% 

Excavated materials 

and overburden 

89% 

Hazardous 

waste to 

offsite 

disposal 

Hazardous 

waste 

to onsite 

disposal 

Total 

hazardous 

waste 

reused 

tonnes of hazardous waste generated were 

reused or recycled, an increase of 495,000 

tonnes from 2005, and 4,800 kilolitres of 

waste oil were reused in blasting or 

recycled through off-site facilities. A small 

proportion of waste (18,900 tonnes) was 

disposed of in off-site regulated facilities 

and the remainder (630,000 tonnes) was 

disposed of in regulated on-site facilities. 

General waste to landfill increased 11% 

on 2005, primarily due to increased waste 

from Xstrata Alloys. This was due to the 

commissioning of the Lion ferrochrome 

smelter, rehabilitation of the closed Vantech 

site and Thorncliffe mine, and increased 

production at Helena mine and the 

Mototolo platinum joint venture. Waste 

disposed of in landfills also increased at 

Las Bambas, due to the construction of 

an onsite facility, allowing previously 

stockpiled waste to be disposed. 

Acid rock drainage is a particular issue for 

water management and overburden and 

tailings disposal facilities or emplacements. 

Field technicians Ronnie and Doning Puli monitoring water levels along the Lawit river, Tampakan copper project, Philippines 

When exposed to water and air, 

potentially acid-forming rock (containing 

sulphide-bearing material) may form 

sulphuric acid which can leach heavy 

metals such as lead, zinc, cadmium and 

mercury from the ore enabling it to enter 

ground and surface water. We manage 

this risk, identified at Alumbrera mine in 

Argentina and Collinsville coal mine in 

Queensland, through capping waste rock 

to prevent water infiltration and ensure its 

integrity through regular monitoring. 

Other strategies include submerging waste 

in water to prevent the formation of acid 

through contact with air, in place at a 

number of former Falconbridge operations. 

Where waste has been submerged in 

wetland, this can also reverse the process 

of acid formation and remove metals and 

acid from solution. 

A particular issue for the zinc industry is 

the management of jarosite waste, 

created in the smelting process. Jarosite is 

rich in iron and is defined as a hazardous

waste product. At most zinc smelters, 

jarosite is disposed of in tailings ponds, 

which require ongoing close monitoring 

and management to minimise 

environmental impact. Xstrata Zinc’s San 

Juan de Nieva smelter and the former 

Falconbridge CEZinc operations both use 

a patented technology to convert jarosite 

into ‘jarofix’ – an inert, solid material which 

can be reused as aggregate or infill. In 

Spain, Xstrata Zinc has used jarofix from its 

operations to rehabilitate a governmentowned 

disused quarry in partnership with 

the municipal authorities. 

Product stewardship 

We assess the health, safety and 

environmental impacts of our products at 

each stage of their life cycle, including: 

■ Development of product concept; 

■ Research and development; 

■ Manufacturing and production; 

■ Storage, distribution and supply; 

■ Product use; and 

■ Disposal, reuse, or recycling. 

Xstrata’s operations aim to minimise any 

adverse health, safety, environmental and 

social impacts of operations and products 

and promote technologies that are efficient 

in energy, resources and materials usage. 

Responsibility for product stewardship is 

devolved to the commodity business level. 

Xstrata has a specific HSEC Management 

Standard which requires operations to 

assess potential impacts and benefits of 

products and to maximise potential reuse 

and recycling opportunities. All managed 

operations are independently audited 

against this standard at a minimum of 

once every three years. We require all 

operations to achieve or exceed our 65% 

satisfactory target. In 2006 the average 

score for this standard was 69%. 

We are active participants in industry 

associations and participate in life cycle 

assessments for each product through 

these associations. These include: 

■ International Lead Zinc Research 

Organisation (ILZO); 

■ International Zinc Association (IZA); 

■ Green Lead initiative; 

■ International Copper Association (ICA); 

■ International Canadian Chemical 

Producer’s Association; 

■ Vanadium International Technical 

Committee (Vanitec); 

■ Lead Development Association 

International (LDAI); 

■ Nickel Institute; 

■ European Association of Non-ferrous 

Metals (EUROMETAUX); 

■ International Chromium Development 

Association (ICDA); 

■ International Lead Zinc Research 

Organisation (ILZRO); 

■ European Sulphuric Acid Association 

(ESA) and; 

■ Cobalt Development Institute (CDI). 

Xstrata Coal’s activities focus on interaction 

with the power generation industry, 

scientific organisations and government to 

advance the development of clean coal 

technologies (see pages 71 to 72), together 

with the capture and use of coal seam 

methane for power generation. 

Xstrata Nickel and Xstrata Zinc continue 

to work closely with industry associations 

and customers to assess, manage and 

respond to the requirements of the 

European Union’s Registration, Evaluation, 

Authorisation of Chemicals (REACH) 

legislation. 

Material Safety Data Sheets are provided 

for products and intermediates and made 

available to stakeholders. These sheets 

include information on product 

Nickel from the Nikkelverk refinery in 

Kristiansand, Norway 

composition, any risks to human health 

and first aid, fire and explosion data, 

identify physical and chemical 

characteristics, handling, storage and 

exposure control, spill and waste disposal, 

stability/reactivity, eco-toxicology and 

transportation information. 


Successful 

mine closure 

after 147 years 

of operation 

The effective closure of mining operations 

requires careful advance planning and an 

integrated approach, considering 

environmental, social and economic 

factors whilst working closely with 

stakeholders. This is particularly true when 

the mine has been operating for almost 

150 years and has been a significant 

contributor to a local water source for the 

last three decades. 

Three years after Xstrata Zinc’s Reocín 

mine was closed, the mine site in northern 

Spain has become a recognised example 

of successful mine closure. Working with 

stakeholders – in particular regional and 

local authorities, regulators and local 

communities – in advance of closure, the 

mine was able to reach solutions that met 

the requirements of all parties, helping to 

achieve necessary regulatory approvals 

and going beyond regulatory requirements 

in the rehabilitation of water management, 

land and waste-tailings rehabilitation. 

Water management presented a 

significant challenge at the operation. 

The Reocín mine is located in an area 

crossed by several streams and rivers. 

Water collects underground and is 

subsequently discharged to the Besaya 

River. This water is essential – particularly

during summer months – to maintain 

appropriate water levels in the river for 

downstream industrial users. Water 

leaving the mine must meet both volume 

and quality requirements. Dewatering 

equipment and a water treatment plant 

were installed to deliver water with 

contaminant levels well below authorized 

limits. An environmental monitoring 

programme is conducted regularly on 

both river water and underground aquifer 

water, and the water treatment plant is 

monitored daily. Since the closure of the 

mine, water quality has continuously 

improved. If this trend continues, water 

treatment may no longer be necessary 

and local authorities could use this as a 

source of publicly-provided potable water. 

Other issues addressed during mine 

closure included the demolition and 

treatment of buildings, treatment of waste 

rock (mullock) dumps, soil rehabilitation, 

rain water collection and revegetation. 

Rehabilitation efforts covered more than 

180 hectares and included the planting of 

native vegetation as well as more than 

600 trees. 

A significant portion of the mine’s 

property was fully rehabilitated and 

donated to the community. An office 

building will be used by the regional 

government as an educational institution. 

One mine shaft will be used by the 

regional authorities either as a mining 

museum or as part of a new industrial 

development. Another restored area was 

transformed into a soccer ground and was 

donated to the town council and part 

of the tailings dam will be used by local 

authorities as a landfill site. 

The heritage of the mine was another 

unique factor in considering its closure. 

Historical documents, books and ledgers 

from the mine have been preserved, 

together with nineteenth century 

laboratory and geological equipment. 

These artefacts will be donated to any 

future mining museum at the site or to 

other institutions to protect them from 

loss or destruction. 

The Reocín mine worked closely with 

authorities and unions to minimise 

impacts on the mine’s 200 employees. 

More than 25% of the mine’s employees 

took early retirement through the ‘Miner’s 

Statute’ legislation, which provides for 

early access to pensions. All members of 

the workforce were assisted in finding 

employment with Xstrata or elsewhere, 

The skilled nature of Reocin employees, 

together with employee assistance 

programmes and industrial jobs available 

in the region, enabled all former 

employees seeking work to find 

new employment. 

Local authorities are currently considering 

urban, industrial and public uses for the 

rehabilitated land. The closure plan and 

actions undertaken at Reocín were 

independently audited through the Xstrata 

HSEC Assurance Programme in January 

2006, and were highlighted as an 

example of good practice in the mining 

industry. Reocin’s closure process and the 

independent audit assessment report have 

been shared with other Xstrata sites, 

institutions and professional associations, 

such as the Spanish Geological Institute, 

which have recognised Reocin mine for its 

effective closure activities. 


Key Sustainability Data 

Economic indicators* 

$ million 2004 2005 † 2006 * 

Total Group Revenue 6,462 8,050 17,632 

Total Group EBIT 1,499 2,520 5,863 

Employee salaries and benefits 735.1 877.6 1,435.0 

Royalties and taxes 212.4 610.8 1,413.0 

Corporate social involvement 10.5 24.7 49.2 

Dividends per share 24US¢ 31US¢ ‡ 42US¢ 

*Statutory including acquisitions from date of transaction completion 

†Results reported under IFRS 

‡2005 dividends adjusted for rights issue impact 

Production indicators 

$ million 2004 2005 2006 

Ferrochrome (kt) 1,225.4 1,121.7 958.6 

Vanadium pentoxide (k lbs) 21,067.0 20,166.0 21,651.0 

Ferrovanadium (k kg) 5,791.0 4,936.0 4,907.0 

Thermal coal (mt) 48.1 52.2 62.4 

Coking coal (mt) 5.2 4.8 5.6 

Semi-soft coking (mt) 6.7 4.8 5.3 

Total coal (mt) 60.0 61.8 73.3 

Copper in concentrate (kt) 1 460.6 493.8 640.9 

Gold in concentrate (kt) 726.2 685.0 771.4 

Anode copper (kt) 236.3 220.3 468.0 

Refined copper (kt) 237.6 219.2 477.4 

Zinc metal (kt) 3 646.2 648.9 731.12 

Zinc in concentrate (kt) 2 311.9 384.8 468.4 

Lead metal (kt) 125.9 161.4 186.7 

Lead in bullion (kt) 3 139.5 159.6 118.3 

Lead in concentrate (kt) 26.2 34.5 60.7 

Refined silver (k oz) 8,976.0 11,859.0 8,183.0 

Silver in crude lead (k oz) 4 10,581.0 11,362.0 6,273.0 

Nickel (kt) – – 46.5 

Ferronickel (kt) – – 29.7 

Copper (kt) – – 11.9 

Cobalt (kt) – – 0.989 

1Includes Xstrata Copper’s 44% share of Collahuasi and 33.75% share of Antamina 

2Includes Xstrata Zinc’s pro-rata share of CEZ production (25%) and Antamina production (33.75%) 

3Includes lead from purchased concentrate 

4Includes silver from purchased concentrate 


Environmental indicators 


Direct energy use (PJ) 58.2 55.4 † 63.2 

Total water use (ML) 74,900 75,300 85,600 

Greenhouse gas emissions (CO2 equivalent million tonnes) 16.2 14.5 15.9 

Sulphur dioxide stack emissions (tonnes) 229,291 238,564 252,888 

Oxides of nitrogen stack emissions (tonnes) 1,477 1,112 1,193 

Total recycling and reuse of water (ML) 92,900 98,900 101,300 

Land disturbed (hectares) 2,362 2,142 1,734 

Land rehabilitated (hectares) 659 1,122 992 

Category 1 incidents # 580 441 890 



Category 4 incidents # – – – 

Category 5 incidents # – – – 

Prosecutions – – – 

Fines $1,110 – $8,100 

†2005 figure restated from 57.6 PJ 

#Figures include former Falconbridge data from September 2006 

Social indicators 


Total workforce 22,144 24,091 43,732 

Permanent employees 16,766 17,628 28,198 

Full-time contractors 5,378 6,463 15,882 

Total employees covered by collective agreements 13,047 12,639 19,451 

Fatalities 6 9 1 

Total Recordable Injury Frequency Rate # 18.5 15.0 14.1 

Lost Time Injury Frequency Rate # 5.3 4.3 3.3 

Disabling Injury Severity Rate # 613 575 399 

Health and safety prosecutions – – – 

Health and safety fines – – – 

Occupational illnesses # 36 37 58 

Average days of training per employee per year 6 9 11 

Community complaints # 490 587 391 

#Figures include former Falconbridge data from September 2006 


GRI Content Index 

The table below indicates where to locate information relating to GRI G3 indicators and principles in this report or other publications. A more detailed GRI 

Navigator is provided on Xstrata’s website. 

Indicator Reporting Level Location 

Indicator Reporting Level Location 

Strategy & analysis 

Environment 

1.1 CEO Report, p.4-5 

EN7 

1.2 Xstrata’s Strategy and Sustainable EN8 Environment, p.73 

Development, p.15-17 

EN9 Environment, p.73 


Organisational Profile 


2.1 

2.2 

2.3 

2.4 

2.5 

2.6 

2.7 

2.8 

2.9 

2.10 

Xstrata at a Glance, p.2 



Annual Report, p.20-21 




Annual Report, p.109 

Annual Report, p.1, 29-39 


CEO Report, p.4 


Scope of Report, p.12 

CEO Report, p.5 

Environment, p.65 

EN12 

EN13 

EN14 

EN15 

EN16 

EN17 

EN18 

EN19 

EN20 

EN21 

EN22 

EN23 

EN24 

EN25 

EN26 

EN27 

n/a 

n/a 

Environment, p.78-80 





None material 


Sustainability Datasheet (website) 








n/a 

Report Parameters 

EN28 

EN29 


3.1 

3.2 

3.3 

3.4 

3.5 

3.6 




Inside Back Cover 



EN30 

EN23 (MM) 

MM3 

MM4 

MM5 

MM6 

n/a 



GRI navigator (website)* 

n/a 

Environment, p83-85 

3.7 

3.8 



Labour Practices and Decent Work 

3.9 

3.10 

3.11 

3.12 

3.13 




GRI Content Index, p.90 


LA1 

LA2 

LA4 

LA5 

LA6 

Workplace and our People, p.46 

Workplace and our People, p.47,50 




Governance, Commitments and Engagement 

LA7 

LA8 


Workplace and our People, p.43-44 

4.1 

4.2 

4.3 

4.4 

4.5 

Governance and Ethics, p.19 



Governance and Ethics, p.19, 23 



Annual Report, p.126-139 

LA10 

LA11 

LA12 

LA13 

LA14 

MM12 

MM13 








4.6 

4.7 



Human Rights 

4.8 

4.9 

4.10 

4.11 

4.12 

4.13 

4.14 

4.15 

4.16 

4.17 

Governance and Ethics, p.20-21 










HR1 

HR2 

HR3 

HR4 

HR5 

HR6 

HR7 

HR8 

HR9 









No incidents 

Social Responsibility, p.58-59 

Economic indicators 

MM11 Social Responsibility, p.58-59 

EC1 Social Responsibility, p.52 

Society 

EC2 

EC3 

EC4 

EC6 

EC7 

EC8 

EC9 

MM1 

MM2 



GRI navigator (website)* 


Social Responsibility, p.53 





SO1 

SO2 

S03 

S04 

SO5 

SO6 

SO7 

SO8 

MM7 

n/a 

n/a 




No incidents 



No incidents 



MM8 n/a None identified 

Environmental indicators 

MM9 Social Responsibility, p.59 


MM10 Environment, p.81-83 

EN2 Production Report, Sustainability 

Datasheet (website) 

Product Responsibility 

EN3 

EN4 

EN5 

EN6 





PR1 

PR3 

PR6 

PR9 

n/a 

None 



n/a 

None 

fully reported partially reported not reported n/a = not applicable 

*See GRI navigator on our website for explanation of indicators not reported or partially reported 


Independent Assurance Statement 

URS Verification Ltd (URSVL) was commissioned 

by Xstrata plc to provide independent assurance 

of its 2006 Sustainability Report. This is the fourth 

successive year that URS has provided assurance 

of Xstrata’s Sustainability/HSEC reporting. The 

scope of work performed on which our opinion 

is based was: 

■ Interview with two senior Xstrata group 

managers responsible for management of 

sustainability issues and corporate affairs 

within Xstrata; 

■ Assessing six sites West Wallsend Coal Mine, 

Mount Isa Lead/Zinc Mines and Lead Smelter 

and McArthur River Lead/Zinc Mine 

(Australia), Tweefontein Coal Complex, 

Kroondal Chrome Mine and Thorncliffe 

Chrome Mine (South Africa); 

■ Review of Xstrata’s internal health, safety, 

environment and community (HSEC) 

assurance process; 

■ Review of stakeholder engagement processes 

in place for socially responsible investors at a 

group level and with local communities at 

the sites visited; 

■ Interview with Xstrata personnel responsible 

for implementing and managing the webbased 

Xstrata Sustainability Database, 

including review of data management and 

reporting systems in place for the collation 

and aggregation of site level data. 

The data aspects verified during the above tasks 

comprised: 

Safety: Numbers of fatalities, total recordable 

injuries (LTI, MTI, RWI), fines and penalties. 

Health: Number and type of occupational 

diseases, HIV management in South Africa; 

Environment: Air emissions (NOX, SO2, total 

particulates); water use (potable, raw, recycled, 

discharged); land use, rehabilitation and 

biodiversity; and environmental incidents, fines 

and penalties. 

Community: Number and type of community 

complaints and complaint management process, 

stakeholder interactions and community 

investments. 

URSVL has performed this assurance process 

following the three principles of the AA1000 

Assurance Standard (AA1000AS) 1 – materiality, 

completeness and responsiveness. URSVL auditors 

also apply the general principles of auditing and 

audit procedures as contained within International 

Standard ISO 190112. We also reviewed the 

report against the Global Reporting Initiative 

(GRI) G3 Sustainability Reporting Guidelines and 

the additional requirements of the GRI Mining 

and Metals Sector Supplement3. Responsibilities of Directors and Verifiers 

The information contained in this report is the 

sole responsibility of the Directors of Xstrata. 

Our independence to provide robust views on 

this information is important. URS Corporation, 

our parent company, undertook some consulting 

work for Xstrata during the period of this report. 

Prior to commencing this year’s assurance work, 

we reviewed the independence of our team and 

our assessors have not been involved in the 

development of this report nor any associated 

systems that would present a conflict of interest. 

URSVL has carried out its services by checking 

samples of information and documents that 

have been made available to URSVL from Xstrata. 

Accordingly, URSVL has not checked or reviewed 

all of Xstrata’s information and documents. The 

assurance statement provided herein by URSVL is 

not intended to be used as advice or as the basis 

for any decisions, including, without limitation, 

financial or investment decisions. 

Opinion 

The management of health, safety, environment 

and community (HSEC) issues is increasingly being 

integrated into Xstrata’s core business processes, 

although the level of integration continues to 

vary, across the commodity businesses and their 

divisions. Significant examples of integration for 

2006 are: 

■ HSEC risk reviews of the Falconbridge 

business, which were completed as an 

integrated part of business due diligence 

within 100 days of the acquisition. 

■ Responsibility for the implementation and 

management of the HSEC Assurance 

programme was transferred from a Group 

level to commodity businesses. 

The improved outcomes observed from the HSEC 

assurance process during 2006 are an encouraging 

indicator of improving sustainability management 

and performance across the sites concerned. 

Materiality and Responsiveness 

Based on our knowledge of Xstrata built over the 

past four years and broad understanding of the 

international mining industry, it is our opinion 

that the key sustainability challenges raised by 

Xstrata in the report reflect the main material 

issues for the industry given Xstrata’s geographic 

presence. Risk assessment forms part of business 

planning from site level through to Group 

executive management. These processes consider 

non-financial risks alongside financial risks with 

areas such as safety being identified and 

recognised as a core business risk. 

Xstrata has continued to actively engage with 

a range of stakeholders and respond to issues 

raised, increasingly integrating stakeholder 

engagement into business processes. In 2006, 

Xstrata has also developed sustainability reports 

at a commodity business, divisional and site level 

across most of its business with content targeted 

towards addressing material issues relevant to 

stakeholders at the various business levels. 

Xstrata is moving towards a more uniform 

approach to stakeholder interaction at a divisional 

and site level and monitoring the benefits of 

community investments. All sites have some 

form of engagement with local communities and 

other stakeholders, and the increased focus and 

structure in this area has started to reduce the 

wide variation in style identified in previous years. 

Completeness 

In our opinion the report provides a clear account 

of the management processes and systems and 

the high performance expectations set by the 

Group. The sites and commodity businesses have 

continued to integrate these expectations into 

their operations to move further towards meeting 

all of these requirements. Setting and reporting 

against specific performance targets for 

greenhouse gas, water, emissions, health, safety 

and community, will increase the transparency of 

Xstrata’s performance reporting in the future. 

The report covers the significant issues and 

challenges that the company has faced during 

2006 in a balanced manner, and also presents 

information on safety performance challenges 

experienced in the early part of 2007. Xstrata 

has continued to increase its disclosure on 

stakeholder relationships, business ethics and 

social issues. Xstrata has declared an A+ level 

of application of the GRI G3 Guidelines3, and 

this has been reviewed and agreed by URSVL. 

The internal web-based Sustainability Database, 

partially implemented in 2005, facilitates 

collection and collation of data for this report. 

Improvements in both the database and the 

process for data entry and validation have been 

made in 2006 with the aim of improving data 

quality. In 2006, Xstrata continued to enhance 

its sustainability definitions guidelines across the 

group and provided in-house training to facilitate 

uniform interpretation of definitions by personnel. 

For the key performance indicators verified, data 

in this report is considered to be generally accurate 

and representative of overall group performance. 

However, URSVL has identified occurrences where 

there appear to be minor systematic data quality 

and definition interpretation issues at a site level, 

although where identified these did not result in 

material errors when aggregated to a commodity 

business or group level. 

Recommendations 

To assist with further development of 

sustainability management and performance 

Xstrata should: 

■ Ensure implementation of the group HSEC 

Standards and Assurance programme within 

the recently acquired operations to reduce 

risk and improve performance; 

■ Build upon improved major hazard 

management and behavioural safety issues 

in order to eliminate injuries, illnesses and 

fatalities from its business; 

■ Continue to improve the process and systems 

of collection, collation and reporting of 

sustainability data at a site level to ensure 

continuous improvement in data quality; 

■ Review some sustainability definitions to 

encourage uniform interpretation and 

application of these across the Group; and 

■ Continue to improve the level of stakeholder 

engagement and also monitor the benefits 

of community investments at a site level. 

Sally Vivian 

URS Verification Ltd 

London 

May 2007 

1 AccountAbility Institute of Social and Ethical Accountability. 

Assurance Standard AA1000, March 2003, London, UK 

2 ISO 19011:2002. Guidelines for Quality and Environmental 

Management Systems Auditing. 

3 Global Reporting Initiative G3 Sustainability Reporting 

Guidelines; Mining and Metals Sector Supplement Pilot 

Version 1.0, February 2005. 


Glossary 

AA1000 Assurance Standard (AA1000AS) 

– the first non-proprietary, open-source 

Assurance Standard that covers the full range 

of an organisation’s disclosure and 

performance, based on assessment of reports 

against three Assurance Principles: Materiality; 

Completeness; and Responsiveness. 

AIDS – Acquired immune deficiency syndrome. 

Anti-retroviral treatment (ART) – A drug 

that suppresses the progression or activity 

of a retrovirus. Anti-retroviral drugs include 

ddC and AZT 

AS/NZS 4801 – Australia/New Zealand 

Standard specifying requirements for an 

occupational health and safety management 

system 

BEE (black economic empowerment) – 

a programme of redress launched by the 

South African government in order to fasttrack 

upliftment of previously disadvantaged 

groups of the South African population. 

Biodiversity – an abbreviation of “biological 

diversity” and means the variability among 

living organisms from all sources, including 

land-based and aquatic ecosystems, and the 

ecosystems of which they are part. 

Brigalow (Acacia harpophylla) – 

A species of silvery wattle found in 

Queensland and north NSW, Australia. 

Biodiversity offset – The setting aside of 

an area to compensate for the disturbance 

of biodiversity. 

Business Principles – Xstrata’s Statement 

of Business Principles sets out the ethical 

framework for the way we work globally. 

CCSD – Cooperative Research Centre for Coal 

in Sustainable Development in Australia. 

Closure plan – A formal document detailing 

a costed conceptual outline of how the 

operation will be closed, taking into account 

the options available to deal with prevailing 

social and environmental issues. 

Coal mine methane – Methane is a 

greenhouse gas with approximately 21 times 

higher global warming potential than CO2. In certain regions, methane (CH4) is released 

from coal as it is mined. 

CO2-e – Carbon dioxide equivalent is a 

standard metric by which greenhouse gases 

other than carbon dioxide are converted to 

CO2 equivalence to facilitate comparisons and 

quantification. 

Colliery – Underground coal mine. 

Commodity business – Xstrata’s activities 

are structured into global commodity 

businesses organised along commodity lines. 

Community complaints and enquiries – 

Any issue raised by a member of the 

community relating to the operation in 

question, whether resolved or not. This can 

relate to an enquiry or other incident or 

non-compliance. 

CRC – Co-operative Research Centre. 

Critical Incident (CI) – An incident which 

has caused a fatality or life threatening 

injuries to a person; damage to assets or 

property, or loss of operations, to a value 

greater than US$0.5 million; a category 4 or 

category 5 environmental incident or; media 

attention/public exposure of a serious, 

negative consequence. 

dBA – Decibels adjusted (measurement of 

noise intensity). 

Disabling Injury – Lost Time Injuries plus 

Restricted Work Injuries (LTI + RWI). 


DISR – Disabling Injury Severity Rate. 

The number of days lost to disabling 

injuries per million hours worked. 

EIS – Environmental Impact Study. 

EITI (Extractive Industries Transparency 

Initiative) – The Extractive Industries 

Transparency Initiative (EITI) aims to increase 

transparency in transactions between 

governments and companies in extractive 

industries. 

Environmental Incident categories – 

Incidents are classified on a scale from 1 to 5 

representing extent of environmental impact. 

■ Category 1, Negligible: an incident that 

has caused negligible, reversible 

environmental impact, requiring very minor 

or no remediation. 

■ Category 2, Minor: an incident that has 

caused minor, reversible environmental 

impact, requiring minor remediation. 

■ Category 3, Significant: an incident 

causing moderate, reversible 

environmental impact, with short term 

effect, requiring moderate remediation. 

■ Category 4, Serious: an incident that has 

caused serious environmental impact, with 

medium term effect, requiring significant 

remediation. 

■ Category 5, Disastrous: an incident that 

has caused disastrous environmental 

impact, with long term effect, requiring 

major remediation. 

EMPR – Environmental Management 

Programme Report (the South African 

equivalent of an Environmental Impact Study). 

EMS – Environmental Management System[s]. 

Fatality – A death resulting from an 

occupational injury or illness. 

GJ – Gigajoules (1 GJ = 1,000,000,000 joules). 

Global Compact – the UN Global Compact is 

a voluntary corporate responsibility initiative 

to advance ten universal principles in the 

areas of human rights, labour, the 

environment and anti-corruption. 

GHGs – Greenhouse gases. 

GRI – Global Reporting Initiative globally 

applicable Sustainability Reporting Guidelines 

to assist corporations in reporting on the 

economic, environmental, and social 

performance of their operations. 

ha – Hectares (1 ha = 10,000 square metres). 

HDSA – Historically disadvantaged 

South African. 

High Potential Risk Incident (HPRI) – An 

incident which could have resulted in a 

Critical Incident (CI). 

HIV – Human immunodeficiency virus. 

Hours worked – Total number of hours 

worked by employees and contractors, 

including overtime and training. 

HSEC – Health, safety, environment 

and community. 

HSEC Assurance Programme – 

An independent audit programme which 

assesses the systems and performance of 

Xstrata’s sites and commodity businesses 

against Xstrata’s HSEC Policy and 

Management Standards. 

HSEC Committee – Xstrata’s HSEC 

committee is a committee of the Board and 

the primary HSEC governance structure. 

HSEC Management Standards – a set 

of 17 standards which set out corporate 

performance expectations for each operation 

and against which sites and commodity 

businesses are independently audited through 

the Xstrata HSEC Assurance Programme. 

ICMM – International Council on Mining 

and Metals. 

ILO – International Labour Organisation. 

ISO 14001 – The International 

Standardisation Organisation’s standard 

for environmental management systems. 

IUCN – The International Union for the 

Conservation of Nature and Natural 

Resources, also known as the ‘World 

Conservation Union’. 

Jarofix – jarosite is transformed into jarofix, a 

solidified, stabilised, inert material. 

Jarosite – iron sulphate (classified as 

a hazardous waste). 

kg – kilogram (1 kg = 1,000 grams). 

kL – kilolitre (1 kL = 1,000 litres). 

km – kilometre (1 km = 1,000 metres). 

Land disturbed – Land disturbed by 

operational activities. 

Land rehabilitated – Land disturbed by 

operational activities and then reshaped 

and revegetated. 

Longwall – Series of equipment, including 

hydraulic jacks and a shearer, used to mine 

coal in an underground mine. 

LPG – Liquid petroleum gas. 

LTI – Lost Time Injury – an occupational injury 

or illness that results in days away from work. 

LTIFR – Lost Time Injury Frequency Rate = LTI 

x 1,000,000/hours worked. 

Materiality – disclosing all information 

of significant concern to stakeholders for 

assessing our economic, environmental, 

and social performance. 

m3 – Cubic metres. 

Megalitre – 1 megalitre = 1,000,000 litres or 

1,000 kilolitres. 

µg/l – Micrograms per litre. 

µg/m3 – Micrograms per cubic metre. 

Mining Charter – The policy objective stated 

in the South African Mineral and Petroleum 

Resources Development Act to expand 

opportunities for historically disadvantaged 

persons to enter the mining and minerals 

industry or benefit from the exploitation 

of the nation’s mineral resources. 

ML – Megalitres (1 ML = 1,000,000 litres). 

MPRDA – the South African Minerals and 

Petroleum Resources Development Act 2004 

governs the transfer of mining rights and 

grant of mining authorisations. 

Mt – Megatonnes (1 Mt = 1,000,000 tonnes). 

MTI – Medical Treatment Injuries – an 

occupational injury/illness which results in 

loss of consciousness or requires medical 

treatment beyond first aid. 

MW – Megawatt, a unit for measuring 

electric power, which has the value of 

1,000,000 watts. 

NGOs – Non-governmental organisations. 

NIHL – Noise-induced hearing loss. 

Non-trading items – non-trading items 

are material items of income and expense, 

which, due to their nature or expected 

infrequency are presented separately. 

NOx – Oxides of nitrogen (nitric oxide and 

nitrogen dioxide). 

NT – Northern Territory, Australia 

Occupational illness – Any abnormal 

condition or disorder, other than one resulting 

from an occupational injury, caused by 

exposure to factors associated with 

employment. 

OHSAS 18001 – Occupational Health and 

Safety Assessment Series (specifications 

for occupational health and safety 

management systems). 

PGMs – Platinum group metals. 

PPE – Personal protective equipment. 

PJ – Petajoule (1015 joules). 

Premus technology – proprietary technology 

for the production of ferrochrome, developed 

and patented by Xstrata Alloys which has 

significant cost and environmental benefits 

compared to existing technology. 

Raw water – Untreated water extracted 

from groundwater, dams or rivers. 

Groundwater is extracted from wells, bores, 

cut off trenches and mine dewatering both 

on and off site. Surface water is defined as 

water from streams, lakes and dams including 

storm water and collected runoff. 

Recycled water – Recycled/re-used water 

is water: 

■ that has been used at least once in 

a process within the operation or at 

another operation within the organisation; 

and 

■ that would otherwise be part of a waste 

stream; and 

■ if not re-used, would require the input 

of raw water. 

Red List – IUCN Red List of Threatened 

Species. 

Reductant – Reducing agent, the electron 

donor in an oxidation-reduction (redox) 

reaction. 

ROM – Run of mine. 

RWI – Restricted Work Injury – 

An occupational injury or illness that results in 

a person being physically or mentally unable 

to perform all or any part of his/her normal 

assignment during any rostered shift. 

SME – Small and medium-sized enterprise(s). 

Social Involvement Plan (SIP) – A plan 

produced by each Commodity Business 

which sets out their engagement with 

local communities, and details the range 

of initiatives to be undertaken and the 

resources, financial and other, dedicated 

to this area of their business. 

Tailings and tailings dams – The fine 

fraction of waste rock remaining after the 

mining and on-site processing of mineral 

resources. Tailings are piped into engineered 

impoundments known as tailings dams. 

Transformation – In South Africa, the 

term transformation describes the ongoing 

process to develop a sustainable, equitable 

society and economy in South Africa. 

TRI – Total Recordable Injuries – a measure that 

includes all injuries other than first aid, ie: 

■ Lost Time Injuries (including fatalities); 

■ Restricted Work Injuries; and 

■ Medical Treatment Injuries. 

TRIFR – Total Recordable Injury Frequency 

Rate = (LTI + RWI + MTI) x 1,000,000/hours 

worked. 

VCT – Voluntary counselling and testing for 

HIV/AIDS. 

Waste water discharged – Total volume 

of effluent discharged to: surface water 

for irrigation; third parties for treatment; and 

rivers or oceans.

Enquiries 

If you would like further information on Xstrata please contact: 

Corporate 

Paul Jones 

General Manager, Sustainable Development 

+61 2 9253 6742 

pejones@xstrata.com 

Claire Divver 

+44 20 7968 2871 

cdivver@xstrata.com 

Brigitte Mattenberger 

+41 41 726 6071 

bmattenberger@xstrata.com 

www.xstrata.com 

If you would like to register to receive copies of Xstrata news releases or announcements, please contact us 

or register directly on the website at www.xstrata.com/register. 

Design and production – Cre8with.com • Illustrations – Mandy Pritty • Typesetting – Orb Solutions

Xstrata plc Bahnhofstrasse 2 PO Box 102 6301 Zug Switzerland 

Tel +41 41 726 6070 Fax +41 41 726 6089 www.xstrata.com

Xstrata plc Sustainability Report 2006

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?