Sustainability Report 2012 for Non-Compliance with Environmental Laws and Regulations
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Responsibility in everything we do Sustainability Report 2011/2012 www.polymetalinternational.com Overview Contents Polymetal’s core objective is to Fewer injuries Overview 2 Chairman’s introduction Our redesigned health 2 About this report generate superior sustainable returns and safety system is 4 Polymetal at a glance paying dividends with 6 Where we operate for shareholders whilst maintaining the dramatically reduced 8 An interview with the Chief Executive injury frequency rates. 10 Our approach to sustainability 12 How we manage sustainability highest possible standard of corporate 15 Stakeholder engagement citizenship. We aim to ensure that 36 16 How we identify priorities Economic our core business of precious metals 18 Ensuring economic progress 20 Contribution to economic development US$6 million 22 Case study: Working with communities exploration, mining and production We invested US$6 million in Amursk in community programmes 23 Case study: Ozerny – a new industrial operates efficiently and safely, thereby in 2012. community arrives in Khabravsk Territory meeting our commercial goals. At the Environment 24 Ensuring environmental progress same time we are committed to the 26 Managing our environmental performance 21 32 Case study: May the ‘ecological landing force’ be with you sustainable economic development 33 Case study: Going beyond environmental management compliance at Amursk of the regions in which we operate. ISO 14001 We achieved independent Employees certification of our Health and safety ISO 14001 environmental 34 Ensuring a safe working environment It is this match between our core management system. 38 Case study: New approaches to hazard identification and risk assessment objective and the interests of our 39 Case study: Healthy working lives Careers, reward and development 40 Investing in our people employees, suppliers, investors, local 26 46 Case study: Competition for best ideas communities and other stakeholders 47 Case study: Employee development that is the key to long-term success. 23 Communities 50 Building strong relationships with our In 2012 we renovated communities 23 healthcare and 54 Case study: On air – news desk for education facilities. young people 55 Case study: Supporting IMN GRI results 56 Table of standard disclosures under 52 GRI reporting 60 GRI statement Sustainability Report 2011/2012 Polymetal International plc 1 Overview Overview Responsibility: at the heart of everything we do Chairman’s introduction About this report This is the third summary of our sustainability performance, covering the calendar years 2011 and 2012. The next full Polymetal has made significant progress report will be published in 2015. In the interim, we will in its development as a leading precious summarise sustainability performance in the 2013 Annual Report, as well as providing updates on our corporate metals company. Our business is dispersed website www.polymetalinternational.com. across Russia and CIS, operates complex This report addresses all of our wholly-owned operating processes in remote areas, is subject mines and processing sites in Russia and Kazakhstan (Dukat, Omolon, Amursk, Albazino, Mayskoye, Khakanja, to extreme weather conditions and has Voro, Varvara), our headquarters in St. Petersburg and to create much of its own infrastructure. subsidiary companies responsible for exploration and other services. We own and operate all of these entities and have Our management systems, therefore, direct control over policies, procedures and performance. need to be robust and effective in order We have structured this report around our economic, to maintain the highest standards of environmental, health and safety, employee and community focused activity and performance. Within this we have sought employee safety, community partnership to address those issues that are deemed to be important by and environmental stewardship. the Board through its risk assessment function, those that are subject to legal obligation and those that are important This is the right thing to do and makes to our stakeholders. We believe that our approach to risk assessment, legal compliance and stakeholder engagement us a more effective business. That is is consistent with the precautionary principle. why sustainability is important and why Global Reporting Initiative (GRI) Index we are investing in these systems – This is our first report to have been prepared using the creating sustainable value for GRI G3.1 Guidelines, along with the Metals and Mining Supplement. While the measurement indicators used are our stakeholders. consistent with the guidelines, some we have reported on in our previous reports and some we have reported for the first time. In all cases we have presented the data in units consistent with GRI and, where possible, included data for 2010, 2011 and 2012. Our previous reports have focused on all of our operating companies, as does this. While we have new assets that have come on stream since our last report in 2010, we are using Bobby Godsell this opportunity to create a fresh baseline for future reports, Chairman of the Board of Directors which will also follow the GRI guidelines. As this is our first such report, we have opted not to seek external assurance, however, we will do so for our next full report in 2015. This will allow us to embed the data collection mechanisms that have been developed over the past two years as we improve our management systems, particularly around environment and health and safety. We are pleased that the management disclosures and performance data are consistent with a GRI Application Level B. 2 Polymetal International plc Sustainability Report 2011/2012 Sustainability Report 2011/2012 Polymetal International plc 3 Overview Overview Polymetal at a glance Polymetal International is a London-listed Our business model Our portfolio 2012 highlights FTSE 100 company and a leading gold and Our business model is focused on centralised processing > Polymetal demonstrated strong operational performance silver producer in Russia and Kazakhstan. facilities (hubs) to deliver significant capex and operating throughout the year. Total gold equivalent production of synergies, allowing us to reduce risk and extend project 1,063 Koz was up 31% compared to 2011, exceeding the Our goal is to provide sustainable value for life cycles. 6 15.1 Moz original projection of 1 Moz. This reflects stable operations Mining operations Ore reserves (GE oz) at all of our mature mines, with a notable improvement shareholders by delivering robust operating Dukat hub at Dukat and growth at Omolon and Albazino exemplary g ng ove and financial performance from high-grade ini rn Albazino/Amursk/ > Metal sales for the full year exceeded production ta an in c Mayskoye POX hub for both gold and silver a tion e Moz assets whilst maintaining capital discipline ra 18.7 M o F pl o Omolon hub Mineral resources (GE oz) > The Amursk POX, the first operating POX plant in Russia’s x cu e s in organic and inorganic growth. n i gold industry, has been slower than planned to come i n Voro standalone mine g g in o online, but the ramp-up is progressing and we expect t n Varvara standalone mine s e h it to reach full capacity by the end of 2013 v i g Khakanja hub n I h > There has been a dramatic increase of the resource base Delivering - 10,722 Our key competitive advantages 2 g Total licence area (km ) r at Albazino and potential new growth assets have been a d > A strong operational track record sustainable e identified through successful exploration at Kutyn L a s and Svetloye > e High-quality reserve base s v value e e t r s > We have implemented a new dividend policy, raising > Robust project pipeline a g 9,237 1,8 5 4 in payout ratio to 30% and introducing special dividends. g Employees Sales revenue (US$ million) ou The first special dividend in the Company’s history M r h Our corporate strategy ub tem of US$0.50 per share was paid in January 2013; a final ai -based sys e nt nc dividend for 2012 of US$0.31 per share is proposed > ai a Locations Deliver superior operating profitability at low risk nin rn g e ove by targeting high-grade assets xemplary g Russia Kazakhstan > Invest in near-mine exploration to extend the life Magadan Region Kostanay Region Production of of existing operations Sverdlovsk Region gold equivalent > Consistently advance standalone greenfield exploration > Focusing on high-grade assets and open-pit mines Khabarovsk Territory 1,0 6 3 Koz 3 55 projects with the goal to discover world-class deposits We have a preference for open-pit mining unless higher Chukotka Autonomous Territory Production of gold equivalent > Pursue synergistic acquisitions grades justify underground development. Grades and mining conditions are the key cost factors that drive (%) > Maintain high corporate governance standards and Awards return on invested capital in the precious metals industry. ■ Gold a strategic approach to sustainability By setting appropriate thresholds on head grades and We have received numerous > Our subsidiary company ■ Silver ■ focusing on open-pit mines we are achieving better awards and citations from in the Ural’s was publicly Copper returns from our project portfolio local community groups, praised for its progressive > Leveraging our hub-based system NGOs, IMN groups and approach to environment Creation of centralised facilities for the treatment of local authorities. protection from the 42 materials from different sources allows us to minimise > Our CEO Vitaly Nesis was Russian