Embedding Sustainability

Eurasian Resources Group S.à r.l. Sustainable Report Development 2017 Embedding sustainability

Eurasian Resources Group S.à r.l. Sustainable Development Report 2017 Our mission Be the best at what we do. Section 1: Navigate global change whilst Preparing holding true to our values. our business Responsibly unlocking the for the future Introduction potential of the Earth and its P20 people, ensure the prosperity Contents Introduction Section 2: Our global footprint ��02 of those who rely on us. CEO statement ��04 Helping our Our business ��06 Our approach to Sustainable Development ��08 for the future people thrive Strategy ��09 1. Preparing our business Governance ��10 Understanding what matters ��12

Sustainable Development Review P Section 1 28 Preparing our business for the future 1.1 Transformation ��22 About this report 1.2 Development of our portfolio ��24 1.3 Efficiency and innovation ��26 This annual Sustainable Development Section 3: Report covers Eurasian Resources Section 2 Community Helping our people thrive 2. Helping our people thrive Group’s (ERG) sustainability performance 2.1 Health and safety ��31 1 during the 2017 calendar year. It covers development 2.2 Skills, capabilities and development ��35 ERG’s own mining, processing, power 2.3 Labour relations ��36 generation, project development and and wellbeing transportation activity. Section 3 Community development and wellbeing 3.1 Community impacts ��43 The contents of this report has been informed by the P 3.2 Community investment ��46 requirements of the Global Reporting Initiative 40 3.3 Our approach to artisanal and small-scale mining �� 51 Standards. Accordingly, it is focused on our most material

Sustainable Development issues (p18-19). The report and and wellbeing Section 4 its contents have not been subject to third-party Environmental stewardship assurance. It has, however been subject to an internal 3. Community development Section 4: 4.1 Pollution prevention ��57 validation process and approval by the Board of 4.2 Energy and climate change ��58 Managers. For all queries in relation to this report, please Environmental 4.3 Waste management ��60 contact: [email protected] or [email protected]. stewardship 1. This follows our last Sustainable Development Review, Section 5 published in 2017 and covering the 2016 calendar year. Our relationship with broader society 5.1 Value generation and distribution ��65 5.2 Anti-corruption and business ethics ��70 5.3 Government relations and policy ��72 P54 4. Environmental stewardship Section 5: Our relationship with broader society broader society Our relationship with

Notes on the preparation of this report 5. P62 All references to ‘ERG’ or the ‘Group’ refer to Eurasian Please note, this report is produced in English, Russian, Resources Group S.à r.l. and its subsidiaries Kazakh and Chinese. In the event of any inconsistencies, the English-language version shall take precedence. Eurasian Resources Group S.à r.l. 01 Sustainable Development Report 2017 Our global footprint Moscow Amsterdam Astana Eurasian Resources Group (ERG) is a leading Luxembourg Introduction Zurich 1 diversified natural resources group Almaty

Beijing

Dubai for the future ERG has integrated mining, 1. Preparing our business processing, energy, logistics 5 and marketing operations and a global workforce of more than 69,000 people. We operate in 15 countries across four continents.

ERG represents one third of the metals and mining industry in the Republic of 2 Kazakhstan and is a global leader in high-carbon ferrochrome production. 2. Helping our people thrive In Kazakhstan, the Group is the key supplier Production regions 4 Lubumbashi of iron ore, aluminium and alumina as well 1 Kazakhstan Salvador as a provider of electric power distribution 2 DRC 3 7 and railway operation services. ERG is also 3 Zambia 6 a principal cobalt and copper producer Mauritius through operations in Africa and has further Development regions development projects in coal, manganese, platinum, bauxite and fluorspar. In Brazil, 4 Brazil ERG is pioneering an integrated iron ore 5 Mali Johannesburg mining and logistics project. 6 Zimbabwe 8 and wellbeing 7 Mozambique Our materials help meet the needs of

South Africa 3. Community development industries and societies across the world 8 ERG and China’s Belt and fuel future economic and social growth. Corporate/sales offices and Road Initiative ERG is an active participant in China’s strategic Belt and Road Initiative (BRI), which aims to improve trade links and promote economic growth across Eurasia, Africa and Latin America.

We are already benefiting from Chinese EMPLOYEES TOTAL TAX PAID COMMUNITY SOCIAL INVESTMENT Key commodities (2017) investments in our growth projects as % of Number of key well as Chinese construction and Over Group operational Key countries engineering expertise. In the longer- 4. Environmental stewardship Division EBITDA2 assets of operation term, the initiative is likely to play an 1 important role in underpinning future Ferroalloys 54.9% 4 Kazakhstan Chinese demand for our products.

69,090 US$850m US$111m Iron ore 9.4% 1 Kazakhstan As such, we view the BRI as a strategic Alumina and Aluminium 17.3% 4 Kazakhstan driver of our future growth. Kazakhstan 62,100 Kazakhstan 81% Kazakhstan US$105.5m Other Non-Ferrous 9.7% 3 DRC Similarly, we are in discussions with our Africa 6,651 Africa 17% Africa US$5.5m Energy 11.8% 3 Kazakhstan Chinese partners to support the construction and financing of our iron Brazil 103 Brazil 0% Brazil US$0.2m 3 Logistics 1.9% 2 Kazakhstan and DRC broader society

ore project in Brazil. Our relationship with

Corporate offices 236 Europe 2% 5. 2. Please note, these percentages total more than 100% (105%) as they do not include our corporate offices which have a net negative impact on Group EBITDA. 1. This figure does not include contractors. 3. SABOT’s EBITDA is accounted in Other Non-Ferrous.

02 Eurasian Resources Group S.à r.l. Eurasian Resources Group S.à r.l. 03 Sustainable Development Report 2017 Sustainable Development Report 2017 Addressing broader sustainability through the Global Battery Alliance, which concerns I am proud to co-chair. The Alliance, which Business performance Beyond this, we have also made important was launched in 2017, is a World Economic highlights in 2017 steps in terms of making our business more Forum initiative aimed at achieving a CEO Statement responsible global battery supply chain. responsive to our stakeholders environmental, social and governance concerns. This means understanding and addressing stakeholder Safety challenges

concerns where possible, whilst also helping The loss of six lives in 2017 highlights the Introduction REVENUES to support stakeholders’ own objectives. By need for us to continue improving our safety doing so, we aim to generate responsible performance. In Kazakhstan we have rolled out a new corporate safety improvement Transformation supply chain assurance for our stakeholders, US$5,048m programme, carried out enhanced training Many of our transformation efforts were maintain and strengthen our legal, political Focus on Safety to support a ‘safety first’ working culture initiated during the ‘crisis years’ between 2014 and social licence to operate, and support +31.5% and implemented measures to improve and 2015. Most of these directly supported the sustainability of our business. The safety of our employees, contractors contractor safety management (with contractors the stabilisation of our business, and we are and communities is core to our Group making up half of the Group-wide fatalities continuing to pursue innovative ways to Kazakhstan values and to our long term, sustainable we experienced in 2017). Similarly, at Boss improve what we do. growth. It is with deep sadness, therefore, During the year, we benchmarked our operations in Kazakhstan against relevant Mining in the DRC – where three of these that I report the loss of six lives in 2017- fatalities occurred – we have strengthened the UNDERLYING EBITDA Key examples of our transformation efforts in three employees and three contractors European Union (EU) air emissions standards.

enforcement of our fatal risk protocols and for the future 2017 included the establishment of the ERG This is with the aim of pre-empting local (2016: 15). I would like to express my tightened our management of contractors. Academy in Kazakhstan – which will support the sincere condolences to the families of legislative developments and achieving US$2,090m 1. Preparing our business development of a common corporate culture those who died whilst carrying out work for ‘beyond compliance’ emissions performance. and equip our employees with the skills to ERG. While we have achieved improvements In a similar vein, we commenced a major Understanding what is important, +42.4% apply transformation in practice – as well as the in our safety performance in 2017, clearly investment programme to fit advanced filter measuring it and managing it centralisation of a range of Group functions. these tragic events are unacceptable and technology to Aluminium of Kazakhstan’s This year’s report, which has been informed We also completed the implementation of have added further impetus to our efforts sintering workshop in the Pavlodar region. by the Global Reporting Initiative’s (GRI) SAP® across Kazakhstan to fully operationalise to prioritise safety above all else. This will materially reduce our contribution Standards, has taken us a step closer our process-driven approach. Meanwhile, to collective air impacts in the region. towards the application of international-level in Africa we started to transition our assets sustainability reporting. As our cross-Group CAPITAL EXPENDITURE to an integrated performance management We also continued our programmes to support data management systems mature, we system to help further align employee Strategic positioning with respect to China the quality of life of our employees and their hope to achieve ‘Core’ compliance with the US$685m Benedikt Sobotka performance with corporate strategy. China has always been a key market for ERG, families in our mining towns and to promote, GRI Standards in future reporting rounds. Chief Executive Officer which is a strategic supplier of metals to the in partnership with local authorities, broader In addition, more complete datasets will +27% 2. Helping our people thrive Growth and renewal country. The country accounts for 15%-20% regional development. An important addition help us to embed enhanced sustainability In 2017, we advanced the construction of our of our total sales volumes – with ferroalloys in this regard has been the establishment of management practices and oversight in future. strategic Metalkol Roan Tailings Reclamation representing the most significant proportion our Student Entrepreneurship Ecosystem Moving from stabilisation (RTR) project in the Democratic Republic of the of such sales. Once our Metalkol RTR project Programme to help turn regional universities A key component of this year’s reporting to sustainability Congo (DRC). Once complete, the Metalkol RTR enters production, we will also be well into centres of entrepreneurial excellence. effort has been our application of a corporate- In the previous four years, we have successfully project will make us a key player in the exciting positioned to become the largest supplier of This will contribute to job creation, economic level materiality process to determine our FERROALLOYS PRODUCTION stabilised our business – by bolstering the and buoyant cobalt market. Similarly, we have cobalt to China. As such, we are supporting diversification and the development of local most important Sustainable Development integrity of our assets, entering into new strategic undertaken a range of additional projects to – and will continue to support – Chinese capabilities with the potential to support issues. At the time of writing, we have partnerships and implementing enhanced support our production of ferroalloys and growth as it transitions to a consumption- our business. completed the internal part of this process, 1,496 kt management practices. This, along with more aluminium in Kazakhstan and of copper in Africa driven economy. the outcomes of which have informed the +9.9% favourable market conditions, has helped us – ranging from the expansion of production Africa contents of this report. We will complete and wellbeing achieve a 42.4% increase in underlying EBITDA at our Aksu Ferroalloys Plant in Kazakhstan In addition, ERG is at the nexus of China’s Belt At ERG Africa we implemented a new Safety, the external part of the process in 2018, to in 2017. to the Cut 3 project at our Frontier Mine in and Road Initiative. The initiative aims to bridge Health, Environment and Communities ensure the accurate representation of our 3. Community development the DRC. Collectively, these initiatives will help the infrastructure gap in many developing (SHEC) Policy, which is aligned with the stakeholders’ interests in our decision-making. Building on this platform, in 2017 we shifted our ensure we are well positioned to benefit from countries in Asia, Africa and Latin America International Finance Corporation (IFC) Performance Standards. This reflects our focus to the embedding of sustainability into our projected future increases in demand for these by coordinating the financial and technical The outcomes of the full materiality process IRON ORE PRODUCTION business. We mean this in the sense of not only metals, which is increasingly being driven by the expertise necessary to drive major industrial ongoing efforts to apply international best will (along with key external frameworks operating in a responsible way and meeting global transition towards a greener economy. projects and infrastructure initiatives. practice in this area. Similarly, we have such as the United Nations Sustainable stakeholders’ expectations with respect to our updated our existing environmental and Development Goals and the development 10,585 kt environmental, social and governance Efficiency and innovation We work closely with numerous Chinese social impact assessments at our mines in priorities of our host countries) help +7.9% performance, but also achieving true business Meanwhile, the Smart Mine initiative at our financial institutions and industry leaders in the DRC as well as at Metalkol RTR, including inform the Sustainable Development sustainability. In particular, we are focused on the SSGPO iron ore business in Kazakhstan a range of sectors – and are proud of the their alignment with the IFC Performance elements of our new corporate strategy. ability of our business to generate value in the represents our flagship project in terms of positive working relationships that we have Standards. Furthermore, we completed 11 long-term, irrespective of market volatility, and to efficiency and innovation. This project forged with Chinese companies working on Participatory Rural Appraisals (PRAs) in the As such, in 2017 we made real progress demonstrates what digitisation, automation a number of significant ERG projects. This DRC, helping our local communities identify in terms of embedding sustainability generate sustained, shared benefits for our 4. Environmental stewardship and data analysis can do in terms of improving includes construction and financing support their needs and implement (with ERG support) across our business. Whilst I am pleased stakeholders – including our local communities. ALUMINA PRODUCTION productivity – whilst also supporting our for our Metalkol RTR project in the DRC (p24). community action plans to address these. with our progress in this regard, I am also Getting our business and operations broader effort to stabilise SSGPO’s We also anticipate potential collaboration on realistic that there is more to be done. commercial position. our iron ore project in Brazil in the future. Finally, we launched our Clean Cobalt Initiative As a result, embedding sustainability will 1,509 kt ready for the future at Metalkol RTR. This will give customers the remain a key aim as we move forward. During the year, we made a number of In combination with other factors, such as We are confident that the BRI will continue confidence that our responsibly-produced +0.6% important steps to help prepare our business the shareholding of the Government of the to offer us the chance to develop new cobalt does not include material from artisanal for the future. This included the ongoing Republic of Kazakhstan, our participation commercial projects through joint and small-scale mining (ASM) sources, is transformation of our business as well as the in China’s Belt and Road Initiative (BRI), and ventures with Chinese partners. free of child labour and can be reliably implementation of strategic growth and renewal Hereinafter – year-on-year comparisons ever-increasing demand for cobalt (as a traced back through the value chain to our Benedikt Sobotka broader society projects, and a range of initiatives focused Our relationship with result of electric vehicle battery technology operations. We are also focused on helping Chief Executive Officer on operational efficiency and innovation. 5. development), these initiatives mean we children in the DRC out of mining, and on are well-positioned for the future. supporting multi-stakeholder advocacy

04 Eurasian Resources Group S.à r.l. Eurasian Resources Group S.à r.l. 05 Sustainable Development Report 2017 Sustainable Development Report 2017 Our business

How we create value Introduction

Inputs Outputs

Our ability to generate Energy Logistics value is dependent on FINANCIAL

access to financial capital, production for the future FREE CASH FLOW skilled people, quality

Generation of power for our Logistics and railway 1. Preparing our business relationships and key operations and third parties services to support our natural resources. This is in Kazakhstan own operations as well US$476m underpinned by our as third party businesses REVENUE culture, and by access to necessary infrastructure US$5,048m and equipment. UNDERLYING EBITDA

FINANCE VALUE ADDING ACTIVITIES US$2,090m We seek to use all funds efficiently,

whether obtained through 2. Helping our people thrive

financing or generated from operations or investments. SOCIAL

LTIFR PEOPLE We rely on the skills, wellbeing 0.69 and motivation of employees, contractors and service TAXES PAID (OVER) providers to generate value. 01 02 03 04 05 06 07 US$850m and wellbeing

RELATIONSHIPS COMMUNITY SOCIAL 3. Community development We seek to build and sustain INVESTMENT constructive relationships with all our stakeholders that are based Exploration Development Mining Processing & Smelting & Sales Post-mining US$111m on mutual respect, transparency & acquisition beneficiation metallurgy reclamation and trust.

NATURAL RESOURCES ENVIRONMENTAL It is critical that our businesses responsibly manage all the natural CO2 EMISSIONS resources used in our processes, given their finite nature. 24.1 Mt CO2e 4. Environmental stewardship OUR KEY GOVERNANCE OPERATIONAL EXTERNAL TRENDS, ENERGY CONSUMPTION CAPITAL ASSETS STAKEHOLDERS EXCELLENCE PRINCIPAL RISKS Significant financial investment in 264,521 TJ the purchase, development and & MATERIAL ISSUES maintenance of property, plant WATER WITHDRAWAL and equipment has provided us with the capacity to generate P16-17 P10 -11 P20-27 P12-15 3 longer-term returns. P18-19 1,972Mm broader society Our relationship with 5.

06 Eurasian Resources Group S.à r.l. Eurasian Resources Group S.à r.l. 07 Sustainable Development Report 2017 Sustainable Development Report 2017 Our approach to Strategy

In 2017, we initiated a process to The new 2025 Strategy will be focused on five key priorities, each of which Introduction develop a new 2025 Group strategy is underpinned by defined Goals: Sustainable Development framework – which supports our Vision of being an international, Portfolio • Asset development in Kazakhstan sustainable, socially responsible Including the intensive and • The optimisation of our portfolio of international assets and efficient mining company. extensive development of our • The expansion of our mining portfolio Sustainable Development is about the asset portfolio in Kazakhstan • Energy business development responsible management of our environmental, Sustainable Development principles This was with the aim of ensuring that our and abroad Relevant section(s) social and governance impacts. For ERG, it is Section 1: Preparing our business for the future (p20) business, which has faced serious commercial Section 4: Environmental stewardship (p54) also about achieving: challenges in recent years: • True ‘business sustainability’ by ensuring our • Is sufficiently robust – and flexible – to culture, strategy, processes, technologies, Financial • Delivery of appropriate dividends to shareholders generate value in the long-term – irrespective for the future decision-making and skills are fit for the future of market volatility. As with others in the Including the achievement of • The achievement of an optimal capital structure financial resilience and the • The achievement of a manageable level of debt

and can sustain long-term value generation Zero Harm sector, the last downturn in commodity prices 1. Preparing our business payment of dividends to our • The maintenance of optimal levels of liquidity • Long-term, sustainable and profitable growth highlighted the need for ERG to optimise its shareholders Relevant section(s) that delivers sustained benefits to our business, including through operational Section 1: Preparing our business for the future (p20) stakeholders, whether they be our employees, efficiency, the creation of a sustainable t so silien cieti portfolio and innovation shareholders, customers, business partners, Re es host countries or – in particular – our • Understands the needs of, and delivers Sustainable development • The improvement of social wellbeing in our local communities sustained benefits to, our stakeholders – of the regions operating regions Innovation Leadership through the creation of shared value. Including contribution to the • The prevention of pollution ble comm As such, Sustainable Development is integral to ina un By doing so, we will be better able to development and wellbeing Relevant section(s) ta it s ie of local communities in our Section 3: Community development and wellbeing (p40), our business model – and increasingly u s manage our strategic risks and capitalise S operating regions Section 4: Environmental stewardship (p54), integrated into our core business processes. on strategic opportunities Section 5: Our relationship with broader society (p62)

We are also exploring ways in which we can 2. Helping our people thrive

The strategy will ensure that we – as an maximise our contribution to the achievement organisation – concentrate on what really Efficiency • The improvement of operational efficiency of relevant United Nations Sustainable matters, helping us make better decisions and Including comprehensive • The development of mechanisms to support and A strong Development Goals (SDGs) and minimise any use our resources more effectively. It will also operational efficiency maintain a culture of continuous improvement company programmes at our assets Relevant section(s) negative impacts we might otherwise have. help us take a more integrated approach to the Section 1: Preparing our business for the future (p20) This includes the identification of ‘priority’ management of our business, by ensuring that and corporate offices SDGs for ERG, selected on the basis of: we factor in the interests of our stakeholders • Potential synergies between the achievement into all that we do. This not only includes the of each SDG and the performance of interests of our shareholders, customers and People • Keeping our people healthy and safe Integrity Accountability our business lenders, but also our employees, local Including skills development, • Improved employee wellbeing

communities, host governments and societies. as well as employee safety • The development of skills and knowledge and wellbeing • Our ability to make a significant contribution and wellbeing • The development of our talent pool to the achievement of each SDG (or to

The strategy will be cascaded throughout ERG • Increased employee engagement and cohesion 3. Community development potentially undermine the same) to ensure that it becomes a living reality for Relevant section(s) • The degree to which achievement of each every manager and every worker, irrespective Section 2: Helping our people thrive (p28) SDG is relevant to the regions in which of location or role. We will do so through: we operate Balance • The integration of the Strategic Goals into employees’ KPIs, thus directly influencing By taking this approach, we can align our Zero Harm Balance their remuneration We are guided by three Principles in all that we do: actions more closely with international We believe that all injuries are Our decision-making process takes stakeholder expectations. This, we believe, • Clear accountability for the delivery of strategic preventable, and by taking the right into consideration the long-term 1. Innovative metals and mining 3. Embedded sustainability will be to the long-term benefit of both our initiatives amongst senior managers measures we can minimise our benefits of Sustainable Development, company We are a sustainable company dedicated to business and broader society. long-term environmental impact balancing and aligning the interests of • A comprehensive, internal communications We will constantly look to strengthen our increasing both resource efficiency and our business and our stakeholders campaign position in the industry and actively exploit contributing to the social development of our You can see more information on the • Dedicated strategy training new processes and technologies. Key to our local communities in an environmentally relationship between our sustainable 4. Environmental stewardship Leadership Integrity approach is our focus on innovation and responsible way. Sustainability is a natural development performance and the SDGs on We work in challenging emerging We are committed to operating achieving the maximum benefit through our outcome of running a business properly – in a p19, as well as the front pages of each chapter. markets and aim to embed an ethos transparently and ethically, and we are existing products and facilities, while also way that goes beyond simply complying with of Sustainable Development across working towards a culture of mutual exploring opportunities to diversify our local laws – and that supports our the Group trust, openness and honesty current portfolio with innovative products. stakeholders across different generations. Accountability Innovation 2. Long-term financial stability We are accountable for our decisions We are constantly searching for, and This builds on our success in achieving a and their consequences, as well as implementing, better ways to operate balanced capital structure and manageable communicating our actions to our – increasing productivity and

level of debt as well as improving our broader society

stakeholders operational efficiency in a Our relationship with operational efficiency over the past sustainable way 5. three years.

08 Eurasian Resources Group S.à r.l. Eurasian Resources Group S.à r.l. 09 Sustainable Development Report 2017 Sustainable Development Report 2017 Our approach to Sustainable Development continued

Regional Health, Safety, Environment and Communities Governance management In Kazakhstan, our dedicated Health, Safety, Environment (HSE) Committee, which is made up of senior regional management and the General Directors of our production entities, Introduction Corporate governance as well as the integration of Sustainable • Strategy development and strategic planning defines our HSE strategy; reviews HSE policies, procedures and initiatives; sets the safety ERG is guided by its Board of Managers Development into our business (through the • Architecture improvement and innovation culture; and receives regular progress reports (Board), comprised of three founding Sustainable Development Council) • Leadership programmes on controls implementation and improvements. shareholders and two representatives of the The HSE Committee met regularly throughout Government of the Republic of Kazakhstan. • Financial and non-financial key performance Business sustainability leadership 2017, reviewing reports on risks and mitigation The Board is committed to ensuring that the Our Sustainable Development Council (SDC) indicators actions presented by senior management, as Group strives to meet the highest business acts as the working body of the Board’s • Business transformation well as addressing issues related to safe worker and ethical standards, and complies with Sustainable Development and M&A Committee. behaviour and contractor management. local and international laws wherever ERG Reflecting our more integrated approach to operates. It approves our Group policies and Sustainable Development, the SDC is In addition, there are two working bodies that procedures, including our Code of Conduct. responsible for considering key issues and oversee our community social investment (CSI)

initiatives around the following areas, all of for the future in Kazakhstan: The Board has established four committees which are aimed at supporting our • A working group dedicated to the management Key external management system standards to help it discharge its responsibilities in key business sustainability: 1. Preparing our business governance areas. All Board committees of our memoranda of understanding with applied by ERG in Kazakhstan have clearly defined terms of reference, which local governments, which account for the significant part of our CSI spending. When describe in detail their duties and the extent of OHSAS 18001 ISO 50001/EN 16001 their authority: selecting projects, the working group considers a range of factors, including the Occupational health and safety Energy management socio-economic needs of our mining towns, ••Audit Committee: Responsible for overseeing management system standard system standard the integrity of ERG’s financial reporting, its our strategic priorities and the interests of all internal controls and risk mitigation actions, key stakeholders the effectiveness of its Internal Audit function • Our regional Sponsorship and Donations ISO 14001 ISO 9001 and the engagement of external auditors Committee, which aims to ensure that our CSI ••Compliance Committee: Responsible for spending is carried out in a transparent and Environmental management Quality management

efficient way 2. Helping our people thrive

overseeing ERG’s Compliance function, system standard system standard including the monitoring of its effectiveness In Africa, our Safety, Health, Environment ••Remuneration Committee: Responsible for and Communities (SHEC) performance is overseeing the remuneration of ERG’s senior reported on a monthly basis to regional managers and monitoring of the Group Executive Committee members, including Key examples of Group- and regional-level remuneration system ERG Africa’s CEO; site General Managers; participation in multi-stakeholder organisations ••Sustainable Development and Mergers and site SHEC managers, and selected senior Acquisitions (M&A) Committee: Responsible employees. Participants in this process meet (member unless otherwise indicated) for overseeing M&A activity (including due to analyse and discuss the cause of serious diligence, the assessment and mitigation of incidents, as well as preventative measures. and wellbeing related risks, structuring and implementation The implementation of such measures is Level of participation Organisation of projects, and post-acquisition integration), monitored by managers on a quarterly basis 3. Community development until issues are resolved. Specific attention Group-level • World Economic Forum (Strategic Partner Associate), is given to emerging trends in relation to: including: Corporate governance structure • The causes of incidents 1. Global Battery Alliance (founding member and partner) • Environmental compliance 2. Partnering Against Corruption Initiative 3. Steward of Future of Economic Progress System • Progress against internal/external • International Chromium Development Association Board of Managers audit reports • Corporate Social Responsibility Kazakhstan • Eurasian Industrial Association • Artisanal and small-scale mining Sustainable Sustainable • Association of Mining and Metallurgical Enterprises Compliance Audit Remuneration • Human Rights Development and Development • National Chamber of Entrepreneurs of Kazakhstan ‘Atameken’ Committee Committee Committee

M&A Committee Council At our operations in the DRC, we also continued • Association of Taxpayers of Kazakhstan 4. Environmental stewardship to operate a formal Safety and Hygiene • Kazakhstan Foreign Investors’ Council Committee as required under local law. CEO • Kazakhstan for Sustainable Development Association

Africa • Cobalt Institute (UK – Board representation) • Chamber of Mines of the DRC ExCom • Chamber of Mines of Zambia • Zambia Institute of Human Resource Management broader society Risk & Compliance Our relationship with Marketing Investment Finance Brazil • Brazilian Mining Institute 5. Management Committee Committee Committee Committee

10 Eurasian Resources Group S.à r.l. Eurasian Resources Group S.à r.l. 11 Sustainable Development Report 2017 Sustainable Development Report 2017 Our approach to Sustainable Development continued

Battery demand and the implications for cobalt Cobalt-intensive battery technology is a key component in the global Implications and responses Understanding what matters effort to reduce reliance on internal combustion engine vehicles. The The construction of the Metalkol RTR project will ensure that ERG enjoys trigger, alongside existing use of the metal in electronic devices, has one of the largest cobalt producing operations in the world – and is well Our new 2025 Group strategy framework will ensure that we Analysis of external issues and dynamics p12 been the development of more practical and affordable electric vehicles positioned to benefit from the mineral’s immediate price increase and concentrate on what really matters – helping us make better (EVs). Indeed, EVs – including both full electric and hybrid vehicles – may long-term fundamentals. Our risk management processes p14 decisions and use our resources more effectively. account for as many as one in every five vehicles sold by 2025. Introduction Our understanding of what matters most to our business Stakeholder engagement p16 Once at full production, Metalkol RTR is expected to produce around The EV revolution has resulted in strong demand for cobalt, which is 105 kt of copper and 20 kt of cobalt per year (supplementing and stakeholders is also underpinned by the following: Our materiality process p18 used in lithium-ion batteries to optimise the battery lifecycle and production from our Boss Mining and Chambishi Metals operations). thermal stability. Cobalt prices increased significantly in 2017 as a result. Much of this output will be sold to the Chinese market – supporting Analysis of external issues and dynamics The long-term fundamentals of cobalt remain strong. Demand for battery manufacturing and the gradual global substitution of internal External issues and dynamics relevant to our business in 2017 include: cobalt in electric vehicle batteries could grow by 200% by the end of the combustion technology. decade, and by 500% by 2025. We are aware, however, that we are operating in a sensitive Global metals demand and price trends Around half of the world’s cobalt reserves lie in the DRC, which is also socio-economic environment, characterised by poverty, active ASM In 2017, prices for metals produced by ERG demonstrated healthy growth. It also proved to be a positive year for copper, which gained 30% in value responsible for more than 65% of global production. The DRC is likely to and historical environmental degradation. year-on-year. While growth was slow in the first half of 2017, better-than- see sustained investment in cobalt projects over time. It is partly in this

For example, economic growth in the main consuming regions helped drive expected macro-economic data from China, as well as plans for a partial context that the Government of the DRC has introduced a new Mining In 2017, we launched the Clean Cobalt Initiative to help ensure for the future robust demand for stainless steel (i.e. more than 6% year-on-year globally). ban of scrap metal imports into the country, fuelled a major price rally Code in 2018, implementing more onerous fiscal terms on producers. responsible, assured cobalt production, improve local communities’

In turn, this – along with other factors – helped push ferrochrome prices from late-July. quality of life and support multi-stakeholder efforts to achieve 1. Preparing our business across all markets to their highest levels since 2011. In China, for example, Given the security and human rights context posed by the DRC, there is responsible cobalt supply chains (p52). In addition, the Metalkol RTR prices increased by approximately 26% year-on-year, reflecting tight iron ore Finally, cobalt experienced a bull market in 2017 thanks to expected concern that production from irresponsible and/or unregulated ASM project will actively ‘clean-up’ legacy waste in the area by reprocessing it supply and higher ferrochrome production costs. Meanwhile, the mature long-term demand growth driven by electric vehicle technology. operations is present in the global battery supply chain. This has raised and storing it in a responsible manner (p24 and p60-61). ferrochrome markets experienced price increases of 40%-50%, reflecting significant concern with respect to the electronics and EV sectors, both the strength of demand and the consolidation of the market under a Implications and responses including amongst end users, NGOs and consumer facing brands limited number of high-quality suppliers. The recovery in prices across multiple products has played a major role in (as well as their suppliers). stabilising ERG as a business. Similarly, average iron ore prices saw 22% year-on-year growth. Stronger than expected Chinese steel demand, coupled with the shutdown of excess Nonetheless, we will continue to optimise our business, including through steel capacity in China and higher utilisation at steel mills, resulted in several transformation, operational efficiency and innovation (p22-23 and p26-27). waves of iron ore restocking. This was exacerbated by lower than expected This is with the aim of ensuring we can withstand future price volatility, whilst SDGs and the societal role of business supplies from major producers. At the same time, declining steel inventories, continuing to deliver value to our stakeholders – thus ensuring the long-term Adopted in 2015 by the United Nations (UN) Member States, the SDGs set Implications and responses

record levels of profitability at steel mills and environmental regulatory 2. Helping our people thrive sustainability of our business. the agenda for ending extreme poverty, fighting inequality and injustice, and In this report, we have taken initial steps to relate our material issues restrictions resulting in reduced production capacity in China, also supported protecting our planet by 2030. (and own performance) to the SDGs. increased demand for higher-grade ore. Furthermore, ERG is investing in a range of growth and renewal projects that will help ensure we benefit from the long-term shifts in metal demand that The adoption of the SDGs sets an implicit challenge for companies, in terms This is part of a broader effort to better understand the relationship between The aluminium market began 2017 on a stronger footing, largely as a result are expected as a result of global aspirations towards a ‘Green Economy’. of how they can positively contribute to the achievement of these goals – our impacts, our operating environments and the UN-driven agenda. of supply reform (such as cuts in illegal and non-compliant production This includes a focus on cobalt, copper, aluminium and ferrochrome and also avoid undermining them. capacity) and winter closures in China. Despite some initial market (p24-25). This includes our identification of ‘priority’ SDGs for ERG – selected on the scepticism regarding the realisation of these reforms, the Chinese Key goals for extractive companies include: basis of potential business synergies, our actual or potential impact on their Government proved that its intention to reduce capacity was serious, Finally, we are taking strategic steps to stabilise our SSGPO iron ore business • Number 7: Affordable and Clean Energy achievement and the degree to which each SDG is relevant to our areas of helping aluminium cash prices surpass US$2,100 per tonne. (p26-27) – including through our innovative Smart Mine initiative, which • Number 8: Decent Work and Economic Growth operation/local stakeholders (p19). leverages advanced digital technology. • Number 9: Industry, Innovation and Infrastructure and wellbeing • Number 11: Sustainable Cities and Communities We believe that this approach will support our longer term business • Number 12: Responsible Consumption and Production

sustainability, by aligning our activities and decision-making with the priorities 3. Community development Belt and Road Initiative • Number 17: Partnerships for the Goals of our host governments, communities and other stakeholders. China’s Belt and Road Initiative (BRI) aims to create global trade networks This is supporting the diversification of ERG’s portfolio and the sustainability The SDGs are likely to be an increasingly important benchmark that: Furthermore, the outcomes of this process will help inform a new Group and the physical/digital integration of international markets. of our business, whilst also helping ensure that we are well positioned to • Stakeholders can use to assess the positive and negative impacts of strategy (p9) that will: benefit from future market dynamics. companies on society • Support the resilience and flexibility of our business It includes a land-based ‘Silk Road’ across Eurasia (including Kazakhstan) and • Companies can use to help guide their development of more sustainable • Ensure we create shared value for our stakeholders a sea-based route running between South East Asia, East Africa and the In this context, ERG is already working in partnership with the Chinese business models that are aligned with the expectations and needs of a European Union. Government and Chinese financial institutions as part of the BRI. These wide range of stakeholders projects are aimed at fuelling industrialisation and infrastructural growth, In 2017, the BRI was reportedly underpinned by more than 40 national and are also improving the livelihoods of local communities. This includes Indeed, the SDGs are already on the agenda of the mining sector, with the cooperation agreements. Furthermore, it is supported by financing from the the construction (in cooperation with Chinese contractor China Nonferrous International Council on Mining and Metals issuing guidance on how the recently established Asian Infrastructure Investment Bank. Metal Industry’s Foreign Engineering and Construction Co, the Export– mining sector can contribute to the achievement of the SDGs – including Import Bank of China, the Industrial and Commercial Bank of China and the

how they can maximise their positive impacts and minimise their negative 4. Environmental stewardship Implications and responses China Export and Credit Insurance Corporation) of our flagship Metalkol RTR impacts in this regard. Similarly, the World Economic Forum has issued its ERG is well-positioned to play a strategic role in the BRI, delivering the raw project in the DRC. The project will be an important source of future cobalt own guidance to help the sector map its roles, responsibilities and materials needed to help fuel manufacturing and economic growth in China. supply for Chinese battery manufacturers (p24). opportunities across the SDGs. For example, China currently accounts for 15%-20% of ERG’s sales – including high-quality ferrochrome for consumer goods, cobalt and copper. Likewise, Chinese financing and expertise in construction, engineering, technology and design (including large, state-owned contractors) continue to support our growth and renewal projects (p24-25). broader society Our relationship with 5.

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Risk management RISK DESCRIPTION RISK MANAGEMENT APPROACH Three Lines of Defence risk management model Our risk management framework defines the oversight Financial risks • Continued enhancement of the Group’s relationships with financing providers, responsibilities for the Board and the Executive Committee. close coordination with existing lenders and compliance with covenants They are supported in this role by our Risk and Compliance Limited access to financial resources, foreign exchange risk, • Control of Group liquidity via monthly cash flow base and risk scenario analysis Management Committee, as well as our Group Risk and Group liquidity risk, credit risk and tax risks. • Development of treasury policies aimed at reducing levels of foreign exchange Internal Audit teams. Our risks (and corresponding controls) are Operational managers identify and manage risks. Each risk is risk, liquidity risk and credit risk presented to the Board and the Risk and Compliance Introduction assigned to a responsible manager who implements timely Management Committee on a quarterly basis. 1 and appropriate risk response and treatment Risk assessment is built into planning and decision-making, with each risk being assessed based on its potential health, safety, environmental, community, reputational, compliance and financial

Health, Safety, Security and Environmental risks • The prioritisation of safety during operations. Comprehensive safety consequences. This allows us to adopt appropriate risk mitigation reinforcement programmes are developed and implemented in all actions taking into account all underlying causes and The Group control functions (e.g. our Risk, Internal Control, Potential regulatory and reputational impacts linked to Group regions consequences, and to embed sustainable business considerations Compliance, Quality Management, Security teams, etc.) operational activities that present inherent risks • Application of a zero tolerance policy with regards to critical HSE risks, and into all that we do. continuously monitor the adequacy, effectiveness and efficiency of relevant controls implemented by responsible to the health and safety of workers and to the environment. resource allocation is prioritised for managing them 2 managers • Application of management systems to address Health, Safety, Security and In 2017, we took steps to further enhance our Group-wide risk Environmental risks management system. This included: for the future • Regular reporting on performance to management • The updating of our risk management and internal control policies and guidelines in Kazakhstan (with plans for their future 1. Preparing our business adoption across the Group) The effectiveness of our risk management framework is • The development of a new Group-level project risk evaluated on a regular basis by our Internal Audit team Compliance risks • Application of Group policies and regular communication of a zero tolerance management methodology 3 and/or external auditors stance towards unethical activity The presence of the Group in operating environments that • Establishment of ERG Risk and Compliance Management Committee, present high levels of inherent risk of non-compliance with which meets on a regular basis laws relating to: • Ongoing operation of a whistleblowing hotline • The execution of a counterparty due diligence procedure • The prevention of bribery and • Licencing • Adherence to international standards with regards to Human Rights corruption • Human rights • Proactive efforts to comply with EU General Data Protection Regulation ERG Group key risks • Sanctions • Data protection (including the • Tax legislation EU General Data Protection 2. Helping our people thrive

RISK DESCRIPTION RISK MANAGEMENT APPROACH • Supplier relationships Regulation)

Political and regulatory risks • Monitoring of potential changes in legislation and participation in professional bodies/associations Capital project execution risks • Implementation of a robust and transparent stage gate project management Political instability (in particular, in the DRC) and the introduction • Development of engagement strategies process to achieve successful project delivery of new codes and regulations in our countries of operation. • Assessment of capital investments against political risk and portfolio Potential failure to deliver large-scale capital projects within • Implementation of capital project risk management standards to major management agreed time, cost and quality criteria – reducing long-term projects across the Group profitability and damaging our reputation. • Securing of project financing and signing of effective memoranda of understanding with respective partners/suppliers where applicable

• Purchase of insurance for major projects (e.g. erection all risks, contractors’ all and wellbeing risk and delay in start-up policies) 3. Community development Production and operational risks • Group seeks to identify catastrophic operational risks (pit slope failure, tailings dam failure, pit flooding, underground mine collapse, etc.), including through Operational disruption and related safety/environmental impacts third-party engineering reviews, and implements effective controls Information security • Application of strict information security policies as a result of technical/mechanical failures and extreme weather. • Transformation of maintenance and reliability management • Implementation of information technology and information system audits • Implementation of risk-based maintenance and reliability planning Potential operational, reputational, regulatory or other harm • Operational site risk surveys are conducted on a regular basis by external resulting from data leakage, mismanagement or theft – including independent surveyors loss of confidential data. • Development of risk based maintenance programmes on a regular basis • Long-term contracts with reliable power suppliers in Central Africa region • Obtaining of appropriate property damage and business interruption insurance 4. Environmental stewardship Human resources risk • Competitive remuneration, including salary and performance-based remuneration, as well as social benefits. The Group develops and implements

Inability to attract and retain personnel with the right skills training and development programmes to cover its current and future and experience. This is in the context of a growing shortage of requirements for qualified personnel qualified personnel resulting in increased competition on the • Improved recruitment procedures and the implementation of actions aimed at labour market in Kazakhstan and abroad. personnel development and reduction of employee turnover • Implementation of a social investment programme in the Group’s regions of operation, specifically aimed at improving the quality of life for employees and their families broader society Our relationship with 5.

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Stakeholder engagement

Stakeholders are selected for engagement on the basis of: • Their actual and potential impact on ERG’s achievement of its business objectives • ERG’s actual and potential impact (positive Introduction and negative) on them

The identification, prioritisation and engagement of our stakeholders helps us: • Understand the impact we have on others through our activities and relationships • Minimise our negative impacts and maximise our positive impacts • Monitor the effectiveness of our management activities

• Understand the risks and opportunities that for the future our stakeholders represent to our business

– and how our activities affect these risks 1. Preparing our business and opportunities • Identify and support partnerships to work together

Engagement takes place at the following levels: • Corporate-level (i.e. strategic issues) • Regional level (i.e. strategic/operational issues) • Site-level (i.e. operational issues) 2. Helping our people thrive

Photo credit: World Economic Forum

CATEGORY STAKEHOLDER GROUP ENGAGEMENT CHANNEL ISSUES OF INTEREST IN 2017 RELEVANT CATEGORY STAKEHOLDER GROUP ENGAGEMENT CHANNEL ISSUES OF INTEREST IN 2017 RELEVANT SECTION SECTION COMMERCIAL Customers • Interaction relating to product • Supply stability/predictability 1 SOCIETY Local communities • Public hearings and meetings • Quality of life 1, 3, 4, 5 development • Product quality/price • Socio-economic surveys • Employment generation • Responding to customer surveys • Responsible production of cobalt • Community social investment • Emissions to air projects • Access to water Suppliers, business • Engagement through business • Contract stability 1 • Information in local media • Security and artisanal and and wellbeing partners and associations and initiatives • Predictable payments • Participatory Rural Appraisals small-scale mining in the DRC contractors • Ongoing dialogue in relation to health and safety, training and NGOs, civil society • Membership in industry sector • Information access and 3, 5 3. Community development auditing of performance organisations and initiatives transparency media • Multi-stakeholder initiatives and • Business ethics Shareholders • Updates to website, posting news, • Sustainable business development 1 FINANCIAL partnerships • ENRC legacy impacts in the DRC statements and operational reports • Dividend generation • Implementation of CSI projects • Meetings and road shows • Corporate reputation Broader society • Environmental impacts 1 • Press releases and other • Engagements focusing on financial • Cost performance • Employment generation publications on CSI projects, services, their structure, volumes Lenders • Business performance 1 financial information, information and value • Successful project execution on project development • Borrower risks Employees and their • On-going dialogue between the • Conditions of employment 2 • Interest payments and principal WORKFORCE representatives management and teams • Training and development debt • Internal communication channels • Occupational health and safety 4. Environmental stewardship GOVERNMENT National • Engagement regarding the issuing • Development of domestic skills and 1, 5 (Intranet, corporate publications, • External living conditions for governments of permits, compliance with capabilities internal events etc.) employees and families regulations and supervision of • Innovative production approaches • Suggestions for ideas to improve Senior managers • Capability development 2 activities • Legal/fiscal regime for mining in the productivity • Professional development • Development of regulations and DRC • Meetings and surveys public policy • Ongoing dialogue through Regional • Regional socio-economic 2, 3 • Development of business- established industrial relations governments development government partnerships (e.g. channels Regulatory bodies memoranda of understanding in • Environmental impacts, including 2, 3, 4, 5 • Collective bargaining agreements

Kazakhstan) emissions to air • Accident investigations broader society Our relationship with

• Implementation of projects for • Workplace fatalities and injuries 5. socio-economic development

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Materiality process Material Issues1 The process identified our most material Please note that this report is structured 1. If an issue does not appear on this list, it does not mean it is This report has, for the first time, been directly This initial phase of work will be supplemented As well as informing future Sustainable irrelevant or is not being managed, but only that it is not of Sustainable Development issues. around each of these Material Issues, with informed by a new internal materiality process, by an additional external review and feedback Development reporting, the materiality process sufficient significance to be addressed in detail in this report. individual content sections dedicated to 2. Please note, ‘Community impacts’ and ‘Energy and climate which draws on ERG’s ongoing risk assessment exercise in 2018, to verify the results and will help inform our Sustainable Development them within each relevant chapter.2 change’ are also covered in this report, despite not being process and stakeholder engagement activity. ensure the process complies with the strategy. identified as material issues. This is in recognition of the fact This reflects our ongoing efforts to continuously requirements of the Global Reporting Initiative that – as well as being relevant to ERG – both are areas of specific interest to external stakeholders. improve our management of Sustainable (GRI) Standards. Introduction Development – including strategy and reporting. MATERIAL ISSUE (in alphabetical order) SHORT DESCRIPTION RELEVANT UN SDGs

Anti-corruption and Avoidance of unethical and/or illegal actions by the Group, its employees or business ethics its business partners (including bribery, fraud, facilitation payments, anti-competitive behaviour and breach of international sanctions). Supporting materiality process Artisanal and The presence of – and interaction with – ASM communities within or near small-scale mining ERG’s concession areas, including efforts to promote responsible mining practice, address risks related to human rights and labour rights, and deliver assurance to downstream actors in the value chain. 1. 2. 3. 4. for the future Community Voluntary and/or mandatory spending specifically aimed at enhancing Scoping Initial Internal review Finalisation investments socio-economic conditions inside and outside of ERG’s local communities.3 1. Preparing our business assessment and feedback and mapping 3. Please note that community-focused spending linked to our employees Definition of an initial scope of Prioritisation of potentially Presentation of the initial results Finalisation of the list of prioritised is addressed under ‘Labour relations’. potentially material Sustainable material issues using a to ERG functional managers/ Sustainable Development issues Development issues affecting ERG quantitative scoring system based discipline experts – and – and mapping against the GRI Efficiency and innovation Enhanced operational performance through the application of improved and/or its stakeholders. on the following criteria: adjustment of the scores in line disclosure requirements. production processes, technologies and management approaches; • The potential/actual impact with their feedback. innovation; enhanced productivity, performance and operational efficiency; of ERG on stakeholders and and the generation/development of innovative ideas across ERG. their interests Government relations and Relations between ERG and host – and other third-party – governments, • The potential/actual impact

policy including positive and negative mutual impacts (e.g. policy, fiscal regimes, 2. Helping our people thrive of stakeholders on ERG economic strategy, geopolitics, advocacy, state share ownership, etc.). and the achievement of its business objectives Health Delivery of a safe and healthy workplace that does not undermine the and safety physical or mental wellbeing of employees in the short- or long-term.

Labour Bilateral relations with our workforce and their legitimate representatives Material issues based on internal assessment Material Relevant relations on salient workplace issues (including pay, benefits, working conditions, collective bargaining, industrial action, etc.) and non-workplace issues (such

Community as quality of life and family welfare in our local communities). and wellbeing Preparing our business Helping our people Environmental Our relationship with development for the future thrive stewardship broader society Responsible management of potentially harmful emissions and wellbeing Pollution 3. Community development prevention to the environment.4 Value generation 4. Excluding carbon emissions, which are addressed separately under ‘Energy and climate change’. Transformation Health and safety Community impacts Water availability and distribution (incl. local content) Skills, capabilities and Developing skill and capability levels within our workforce. development Governance and Skills, capabilities Community Pollution prevention Human rights compliance and development investments Transformation The delivery of sustainable growth and reduced costs through the development of the integrity of our assets, the security of new business Efficiency Artisanal and Anti-corruption partnerships, the implementation of industry leading management and Diversity and inclusion Energy and climate change and innovation small-scale mining and business ethics sustainable development practices as well as strengthening our ability to respond to a changing external environment. 4. Environmental stewardship

Indigenous people and Government relations Value generation The generation of economic value by ERG in the short-, medium- and Risk management Labour relations Waste management traditional communities and policy and distribution long-term as a result of its core business activities – and the distribution of (incl. local content) such value to its stakeholders (e.g. operating costs, taxes/royalties, staff pay/ benefits, dividends, finance costs and community social investment). Responsible closure Waste management Responsible approaches to waste generation, management and disposal and transfer (e.g. overburden, tailings, slag, general industrial waste, etc.). This includes waste-related risks, opportunities and impacts linked to physical integrity, broader society

recycling, marketing, pollution, environmental liabilities, etc. Our relationship with Biodiversity 5.

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During the last four Introduction business for the future years, we have successfully

Renewal, growth and innovation P22 stabilised and transformed our business for the future 1. Preparing our business

Key enabling factors included: As such, we must ensure we maintain a robust, • A diversified project portfolio flexible and sustainable business that not only 1.2 Development survives changes in market conditions, but can • The maintenance of relationships with our successfully anticipate and address attendant existing business partners of our portfolio risks and opportunities – and thrive as a result. • The Government of the Republic of It is in this context that we aim to embed Kazakhstan’s stake in the Group sustainability throughout all aspects of our • Revision of the debt repayment schedule with business and incorporate this as a key focus of key lenders our business strategy. 2. Helping our people thrive • Continuous cost optimisation programmes

It is now important that we build on this solid

foundation to ensure we continue to generate sustainable value in the short-, medium- and P24 long-term. This is not only in the interests of our shareholders, but is also vital for the future of a broader set of stakeholders, who benefit from 1. i.e. why this issue matters to our stakeholders the value we generate (p16-17). and/or to our business. and wellbeing 3. Community development

Relevant Priorities Key UN Sustainable 1.3 Efficiency in the 2025 Strategy Development Goals and innovation Focus area: Portfolio • Asset development in Kazakhstan • The optimisation of our portfolio of international assets

• The extension of our mining portfolio 4. Environmental stewardship

Focus area: Efficiency

• The improvement of operational efficiency • The development of mechanisms to P support and maintain a culture of 26 continuous improvement broader society Our relationship with 5.

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Business performance in 2017 • Planning: Including tools to support short-, Key transformation programmes first • Implementation of Dynaway enterprise asset More favourable market conditions, in medium- and long-term planning, analysis of initiated in 2016 management system to enhance maintenance combination with our past and current efforts the consequences of decision-making and • The introduction of uniform principles and management at our Boss and CCC mines in to support the sustainability of our business, regular internal and external communication management mechanisms for all assets Africa – in a process that will be completed have helped to support improved financial and of our strategic plan. This includes the within the Group (completed in 2017) in 2018 production indicators in 2017. For example, in implementation of a new 18 month rolling • Introduction of common, cross-Group 2017 ERG achieved: forecast process based on drivers to help In addition, we implemented Project Baobab capital governance and project management

senior management understand the in Africa, which saw more than 150 cross- Introduction • Underlying EBITDA of US$2,090 million processes and a dedicated Group-level implications of their decisions – as well as disciplinary participants develop Functional (a 42.4% increase on 2016) Investment Committee internal and external influences on liquidity Handbooks defining organisational structures, • A net debt to underlying EBITDA ratio of 3.39 • The integration of all Group planning • Procurement: Including centralised regional business processes, as well as business (compared to 4.77 in 2016) processes at all levels planning and analysis and automated infrastructure and systems, amongst other • An underlying EBITDA margin of 41.4% (up by processes • ERG 4.0 – including ongoing efforts to elements. This will provide the foundation for 3.2 percentage points compared to 38.2% increase internal digitalisation the implementation of a process-driven in 2016) management model in the region. Key transformation programmes first • Establishment of a dedicated Operational initiated between 2009-2015 Excellence team to drive productivity and The year also saw an improvement in Collectively, such measures have helped us • SAP® implementation – a process that was reduce costs production levels, particularly with respect to achieve a balanced management system to completed across Kazakhstan in 2017, ferroalloys, iron ore, aluminium and coal. • Enhanced efficiency and restructuring support the resilience of our business. representing the ultimate operationalisation processes to support transformation,

of our process-driven approach for the future including delegation of authority, cost Planned transformation • Entity-level introduction of robust financial management and office restructuring programmes for 2018 1. Preparing our business We aim to embed sustainability Group production modelling and forecasting at regional and In Kazakhstan, we plan to: Group levels Key transformation programmes • Implement a new maintenance and reliability throughout all aspects of our Product 2017 (kt) 2016 (kt) Change (%) initiated in 2017 business and incorporate this as • Enhanced and centralised procurement management programme Saleable ferroalloys 1,496 1,361 +9.9 planning and management processes • The centralisation of our sales and marketing • Audit the application of SAP® at our entities a key focus of our business strategy companies’ financial functions and of our legal • A new sales strategy – including the and identify areas for improved performance 10,585 9,809 +7.9 and IT services in Kazakhstan Saleable iron ore concentrate and pellets restructuring of our Sales and Operational • Roll out further digitisation projects beyond Planning function to ensure integrated • The establishment of the ERG Academy, a Alumina 1,509 1,500 +0.6 our Kacharsky mine (p26), including advanced commercial decision-making and coordinated strategic programme in Kazakhstan through vehicle dispatching systems which we deliver a structured training, Aluminium 257 240 +7.1 operational planning development and leadership curriculum and • Implement a number of financial projects with • Project Minus 10%, aimed at reducing costs by support a coherent corporate culture the aim of further centralisation and ‘fast close’ Saleable copper (contained) 142.7 142.2 +0.4 10% through operational efficiency 2. Helping our people thrive • The transition of our African assets to a single • A transparent, process-based system of KPIs Cobalt (contained) 2.5 5.1 -51.0 integrated performance management system using Dynamics 365 software. This process will

Coal 27,472 24,679 +11.3 be focused on our Supply Chain, Finance and Human Resources functions and will be completed in 2019

1.1 Transformation and wellbeing Transformation journey

The key stage of our transformation journey In 2016, a further evolution took place. Building 3. Community development Key Strategic Goals in the 2025 Strategy (presented in the figure on the opposite page) upon our recently established process-driven Development and growth • The development of mechanisms to started in 2014 in Kazakhstan, when the approach to management, we established the support and maintain a culture of decision was made to enhance the central Sustainable Development Council (p10), which • Optimisation of our asset portfolio continuous improvement management and oversight of our entities. was tasked with supporting the achievement This involved the expansion of our corporate of the Group’s strategic objectives, the Stabilisation • Investment in new growth and renewal projects The global commodity downturn demonstrated office, as well as the implementation of centrally achievement of sustainable development approved management plans and processes for of the business and the generation of value • Extensive improvement of operational that we needed to explore new ways of thinking, • Restructuring of our debt and the each entity, including: for all stakeholders. It is in this context that efficiency working and organising our business. consolidation of our financial position in 2017 we continued to pursue these goals To this end, we continued to develop and apply • Five-year plans Crisis management • Further refinement of management through our transformation efforts. • Implementation of innovative projects international standard management systems, • Budgets systems and management capabilities • Revitalisation of existing growth and practices and organisational structures – • Maintenance of production volumes • Key performance indicators Enhanced management practices renewal projects supporting our strategic objective of being a and avoidance of retrenchments 4. Environmental stewardship high performing organisation. This includes a • Procurement plans We continued to implement existing initiatives • Stabilisation of financial position strong focus on: to improve the management of our business. In parallel, we placed greater emphasis on the Collectively, these have materially improved our • Transformation, centralisation and • Business process standardisation, improved implementation of processes that focus on management in the following areas: enhanced management oversight planning, disciplined capital allocation, as well value-creation for ERG and all of its as enhanced costs/productivity • Sales: Including a focus on long-term stakeholders. This was supported by a switch contracts, enhanced market analysis and • Promoting innovative operational and from a ‘functional’ approach to management integrated coordination with our operations management approaches across the business (i.e. managing via individual functions) to a • Capex: Including a detailed 10-year Group- • Achieving higher levels of employee ‘process-driven’ approach (i.e. managing across level plan, the application of a best practice

engagement around common business goals different functions involved in any cross-cutting broader society processes). stage gate process, centralised management Our relationship with and monitoring of major projects, and periodic 2014-2015 2016-2017 2018 onwards 5. progress reporting to the Board

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Expanding production at the Aksu Other projects this strongly regulated and environmentally Ferroalloys Plant in Kazakhstan In addition to the above, we are implementing sensitive region. Once constructed, BAMIN is In 2017, we commissioned a major rebuild of additional growth and renewal projects to expected to produce 18 mt of iron ore per year, 1.2 Development of our portfolio the Aksu plant’s No.64 smelter furnace (under support our general business sustainability, with a total mine life of 30 years. the continuing Workshop No.6 Renovation including the following: project) – including gas-tight sealing of the Major upgrade of the Aksu Power Plant furnace. This will help us harvest ferroalloy gas Advancement of the Bahia Mineração in Kazakhstan

and use some of it to heat charge materials (BAMIN) project in Brazil Power Unit No.7 of the Aksu Power Plant is Introduction during feeding. This programme is expected currently planned for decommissioning in 2019, Key Strategic Goals in the 2025 Strategy BAMIN is a high-quality iron ore deposit with to improve furnace productivity by 50%, direct-shipping ore (DSO) and concentrate which would result in an intra-Group energy • Asset development in Kazakhstan whilst also reducing energy consumption production potential. capacity shortage. In 2017, we developed a • The optimisation of our portfolio of by up to 20% and (in conjunction with the major conceptual project to reconstruct the unit international assets installation of two modern gas cleaning devices) In 2017 we: that will involve the full replacement of the main reducing our emissions to air. In coming years, generators and increase capacity from 300MW • The extension of our mining portfolio • Carried out work on the (now complete) similar renovations will be implemented at to 325MW. The prefeasibility study for the project feasibility study other furnaces in the workshop. After the project is due to be completed by the third During the year, we continued to develop our full renovation is completed, the workshop • Placed strong focus on maintaining our quarter of 2018, with the project then moving asset and product portfolio to support the is expected to produce up to 500 kt of environmental licences to feasibility, to prepare for the start of future success of our business. This included high carbon ferrochrome a year. decommissioning and construction by 2019. key projects that will better position us to help In this context, BAMIN has achieved status as an drive, and profit from, future shifts in metal example of environmental best practice in the for the future demand (p25). State of Bahia. This is a vital enabling factor in 1. Preparing our business

Cobalt and copper The Metalkol Roan Tailings Reclamation Metalkol (RTR) project in the DRC In 2017, construction continued on our flagship Providing the raw materials for the Metalkol RTR project. ‘Green Economy’ of the future This is in the context of our participation in China’s Belt and Road Initiative and receipt of Chinese investment for our development Beyond our own environmental performance, we are proud to play a projects, including Metalkol RTR. broader role in helping enable – through the production of 2. Helping our people thrive

The new processing plant will reprocess legacy aluminium, copper, cobalt and ferroalloys – the global ‘Green 2 cobalt-copper tailings at one of the largest implemented, the project could support Economy’. As noted by the World Bank , these metals are expected to tailings deposits in the world, accumulated over average production of over 60 kt a year of Our Metalkol RTR project will make us play an important role in supporting ‘cleaner’ technology decades of operations at the site. These tailings, copper contained in concentrate between 2019 a major producer of low-cost copper which were released into the environment and 2023 – and potentially lay the ground for a and cobalt – and add a new strategic (including into the Musonoi River) by previous subsequent Cut 4 project. In turn, this would source of responsibly mined cobalt to help ensure sustained value creation for ERG’s operators from the 1950s onwards, continue the global value chain to cause pollution that affects local water and local stakeholders, including employees and Cobalt Ferroalloys surrounding communities. By reprocessing community members. Cobalt, which is a vital component in Ferroalloys, which are essential components in

and responsibly storing these tailings, we will lithium-ion batteries used in electric vehicles. the manufacture of stainless steel, are required and wellbeing become a major, low-cost cobalt and copper Aluminium The DNK Phase 2 is expected Growing production of electric vehicles is for the development of advanced coal-fired producer, as well as owners of a new strategic Adding value to aluminium through the likely to significantly increase demand for power stations (including boilers and pipework) to increase output of chrome 3. Community development source of responsibly mined, low-cost cobalt to KAS-2 project in Kazakhstan ore and ensure stable production cobalt. As such, increased supply of cobalt is and for gas turbine generation. Stainless steel add to the global value chain. In turn, this will In 2017, in response to increased demand for likely to have a material impact on the gradual also plays an important role in nuclear power generate responsible supply chain assurance our aluminium, we initiated the KAS-2 project at Kazchrome future transition from hydrocarbon vehicles generation structures. for our customers (p51 and p60). at our Kazakhstan Aluminium Smelter. This to electric vehicles. involves a prefeasibility study to expand overall The Boss 50 project to increase copper aluminium smelting capacity and investigate Ferroalloys output in the DRC further integration down the value chain by Development of DNK mine in Kazakhstan In 2017, we completed an investment of more producing aluminium alloys in different forms Some of the mines supplying chrome ore to Aluminium Copper than US$50 million in a project to increase such as slab, rod and T-shaped pig. If approved, Kazchrome are expected to progressively Aluminium, which is integrated into Copper, which is a key input material for copper production at Boss Mining to 50 kt per the project will add value to our alumina produce lower volumes. In this context, we photovoltaic generation structures, wind renewable energy infrastructure and electric year – an increase of approximately 16 kt. This reserves and power resources. continued to develop the second phase of our generation structures, and lithium-ion vehicles. For example, it is estimated that was done through the construction of a new DNK mine, which will potentially use block-cave batteries, could play a key role in the the motors used in electric vehicles use tank leach plant and supporting infrastructure. Using advanced filtration to reduce mining to produce replacement production reduction in the weight of future fuel-efficient approximately four times as much copper 4. Environmental stewardship emissions at Aluminium of Kazakhstan volumes. The project is expected to help and/or electric vehicles. According to the compared to traditional combustion engines. Frontier life of mine extension through the We have started a significant investment increase production at the DNK mine and World Bank, the metal is expected “to benefit The metal is also (like cobalt) an essential

Cut 3 project in the DRC programme to upgrade the filters at ensure overall production at Kazchrome will amongst other metals from a low carbon component for lithium-ion batteries, power In 2018, we are planning to continue investment Aluminium of Kazakhstan’s sintering workshop remain stable over the long-term. First ore from energy shift over the century”. inverters and charging infrastructure. in our Frontier Mine to extend its life. This in the Pavlodar region. This cutting-edge the DNK second phase is planned for 2023. Furthermore, the World Bank notes that the includes the Cut 3 project, which assumes the filtration technology will result in significant ‘spread of distributed energy generation and stripping of up to 28 million cubic meters of reductions in particulate emissions. As a electricity access is likely to increase future 2. World Bank, The Growing Role of Minerals and Metals for a overburden to push back the pit boundaries result, it will materially reduce our contribution Low Carbon Future, http://documents.worldbank.org/ demand for more electrical cabling’ resulting and expose over 300 kt of economically to air pollution linked to multiple heavy curated/en/207371500386458722/pdf/117581-WP- in greater demand for copper and aluminium. broader society recoverable copper. This has the potential to industrial and mining enterprises in the P159838-PUBLIC-ClimateSmartMiningJuly.pdf Our relationship with extend the mine’s life by up to four years. Once region (as well as domestic coal-users). 5.

24 Eurasian Resources Group S.à r.l. Eurasian Resources Group S.à r.l. 25 Sustainable Development Report 2017 Sustainable Development Report 2017 Section 1: Preparing our business for the future continued

In addition, the Forum integrated an expanded competitive programme, focused on production Industry 4.0, digitisation and cyber security improvements, operational efficiency and the 1.3 Efficiency and innovation introduction of innovative ideas. This produced an additional eight initiatives – adding to more As demonstrated by the Smart Mine initiative than 800 internally-generated initiatives submitted by employees via our internal Ideas at our Kacharsky mine (SSGPO), we are actively

Portal (more than 450 of which are currently working to prepare the Group so that it can Introduction During 2017, this management process being implemented and monitored). Key Strategic Goals in the 2025 Strategy Operational Efficiency Management Process in Kazakhstan delivered total cost savings of US$114.5 million reap the benefits of Industry 4.0 • Asset development in Kazakhstan In 2017, we built on our existing Project Minus in Kazakhstan. This compares to general Mine benchmarking and modelling • The improvement of operational efficiency 10% by developing a structured and ongoing efficiency savings of US$65 million in 2016 – in Kazakhstan an 88% increase. • The development of mechanisms to Operational Efficiency Management Process. We initiated a programme to engage the world’s

support and maintain a culture of Examples of key projects include: leading mining consultancies to analyse our This includes the digitisation In this context, we are prepared to mitigate a continuous improvement Innovator’s Forum on Industry 4.0 mines and current mining plans, with the aim • SSGPO railroad review: This saw continued of production and application range of cyber security risks. In 2017, we efforts to adapt transportation infrastructure and idea-generation in Kazakhstan of identifying: carried out a gap analysis at our Kazchrome We held our second Innovator’s Forum, of sensor technology, the Efficiencies can be achieved through a variety at the Sarbai pit, to allow access to • Low capex operational improvements and European offices against the ISO 27001 which involved a broad range of international of means, including the optimised use of our economically recoverable iron ore reserves generation of data driven information security management system experts, senior ERG managers, ERG • Transformational improvements that may existing deposits, infrastructure and equipment. around the pit perimeter. This has saved an require additional capital expenditure insight and cloud computing. standard. The results of this process have employees, government officials and for the future In addition, we also look for economically estimated US$18.5 million in costs over two informed our work plan for 2018 and beyond, other sector specialists. Participants effective opportunities to replace legacy years and has extended the mine’s life The process, which will include international To enhance these initiatives, the Group including the establishment of a centralised examined the opportunities that the 1. Preparing our business equipment where it will deliver sufficient returns • SSGPO vehicle performance monitoring: started deploying a new major programme cyber security team in Astana and compliance Fourth Industrial Revolution could bring to benchmarking against other operations, will be – in terms of output, costs, environmental This saw (in the context of our Smart Mine – building a single Manufacturing Execution to the ISO 27001 standard. the sector generally and ERG specifically applied at all operational mines in 2018. impacts or other variables that support our initiative, see below) the application of a fuel System (Cloud MES) layer between all – including in relation to production business sustainability. measurement system that supports the production systems at the business In addition, we plan to establish a venture processes, automation and digitisation. In addition, we continued the implementation tracking and minimisation of idle time within of a Mine Modelling initiative (using units and an existing single instance ERP fund to invest in high-potential digital projects Similarly, innovation and finding new ways of the fleet, producing savings of US$15.9 million advanced software) to help de-risk our solution. Cloud MES will be the base for and digital partnerships with the Government doing things through the application of advanced in 2017 mines in terms of operational disruption, collecting and harmonizing all operational of the Republic Kazakhstan, within the technology can help improve productivity. In ore accessibility and safety. In 2017, we data into a single, ready for further analysis context of its national digitisation Kazakhstan, this process is supported by our launched the implementation of this ‘data lake’. In its turn, the ‘data lake’ will programme. R&D team (consisting of approximately 85 initiative at Donskoy chrome mine. give a big impulse to completely new people) made up of scientists and analysts based big data and machine learning cases in in Astana, as well as their colleagues located in the production processes. The Group is

Stabilisation of our SSGPO iron ore 2. Helping our people thrive laboratories across our entities. currently actively working on its first pilots business in Kazakhstan in big data and machine learning cases. In response to reduced production and a

significant fall in the price of iron ore, in 2017 Smart Mine Initiative we implemented measures to support the economic viability of our SSGPO iron ore We believe there are still significant business. This included: • Application of the Smart Mine initiative at our opportunities to improve our operational Kacharsky mine (p26) • An operational efficiency programme that efficiency and further reduce our costs and wellbeing generated almost US$18.5 million in savings

We expect these initiatives to collectively 3. Community development contribute to enhanced production One of the means by which we The project is expected to deliver cost savings of performance in 2018. are doing this is through our US$1.4 million per year and improve capital productivity as a result of reduced failures, Other important initiatives include: Smart Mine initiative, which we improved equipment wait-times and enhanced • A 2017 operational efficiency study at have rolled out at our Kacharsky coordination of our mine trucks. It has Aluminium of Kazakhstan and Eurasian Energy mine (part of the SSGPO iron highlighted the strategic opportunities that Corporation, which is informing work plans ore business). digital data collection and analysis could for 2018 represent for the rest of our business. • The rollout of a programme in 2017 to This data collection and analysis project improve production capacity and reduce costs provides full transparency and automated As a result, we plan to have completed the at Kazchrome operations. The programme is 4. Environmental stewardship control over a range of operational efficiency rollout of the initiative to our open-pits in expected to increase high-carbon indicators – across the iron ore concentrate Kazakhstan by the end of 2019. This is aligned ferrochrome production by 10%, without production lifecycle. with the Government’s goal of promoting major capital expenditure

digitisation within the economy of Kazakhstan, • Planned application of predictive plant This includes: and our aspiration to leverage Industry 4.0 to the advantage of our business and maintenance in 2018 and 2019, including the • Production process monitoring stakeholders. application of remote sensor technology • Pit monitoring • System modification

• Mine vehicle and logistics optimisation broader society Our relationship with 5.

26 Eurasian Resources Group S.à r.l. Eurasian Resources Group S.à r.l. 27 Sustainable Development Report 2017 Sustainable Development Report 2017 Section 2 Helping our 2.1 Health & safety Materiality

As an operator of mines, Introduction people thrive as well as other heavy

Supporting employee safety, P31 industrial facilities, the safety development and wellbeing and wellbeing of our people is paramount for the future 1. Preparing our business

Providing a safe and healthy working Finally, as a diversified natural resources environment is not only the right thing to do; business with more than 69,000 employees, our 2.2 Skills, capabilities it is also important for the maintenance of labour relations have a direct impact on our our operational continuity, efficiency and the productivity, efficiency and profitability. In this and development motivation of our employees. In this context, context, we take a truly holistic approach to we are fully committed to the achievement of labour relations that focuses as much on Zero Harm. meeting the social needs and living standards of our employees and their families, as it does on Like any business, our ability to continue the effective engagement of our people within generating value is dependent on our attraction, the work environment. development, motivation and retention of high 2. Helping our people thrive quality, skilled employees. The transformation Key issues in this regard include: of our business makes this even more

• Health and safety important to ERG. Achieving integrated • Skills, capabilities and development management, enhanced planning, effective P35 capital allocation, cost efficiencies and improved • Labour relations productivity also requires the evolution of our organisational culture. and wellbeing 3. Community development

Relevant Priorities Key UN Sustainable 2.3 Labour relations in the 2025 Strategy Development Goals Focus area: People • Keeping our people healthy and safe • Improved employee wellbeing • The development of skills and knowledge 4. Environmental stewardship • Development of our talent pool • Increased employee engagement and cohesion

P36 broader society Our relationship with 5.

28 Eurasian Resources Group S.à r.l. Eurasian Resources Group S.à r.l. 29 Sustainable Development Report 2017 Sustainable Development Report 2017 Section 2: Helping our people thrive continued

How we manage our workforce Implementation of our commitments Workforce profile Our commitment In Kazakhstan, our overall approach to We are committed to delivering a safe, employee management is executed through attractive, productive and stable working entity-level human resource policies and 2.1 Health and safety At the end of 2017, we environment for all our employees and frameworks. In late 2017, we established a Staff employed 69,090 people contractors. Our commitments in this regard and Remuneration Committee in Kazakhstan, (2016: 68,623) – of which are supported by the requirements of our which meets on a monthly basis. The approximately 90% are Health, Safety and Environment (HSE) Policy Committee supports regional-level coordination Introduction in relation to a range of areas, including located in Kazakhstan. Statement, Human Rights Policy and our Code Key Strategic Goals in the 2025 Strategy of Conduct. organisational planning, recruitment, employee motivation, remuneration, talent management • Keeping our people healthy and safe Our HSE Policy Statement commits us to: and social benefits. • Improved employee wellbeing • Continually improving our performance Furthermore, all of our operations in • Assessing and managing our risks Kazakhstan are certified to the OHSAS 18001 • Carrying out training, communication occupational health and safety management We are committed to achieving and reporting systems standard. In 2017, we began Zero Harm FEMALE EMPLOYEES • Implementing audit and review processes implementation of an integrated performance management system across our operations in

Under our Human Rights Policy we are Africa. This aims to embed a process driven Ensuring the health and safety of our people for the future committed to respecting universally recognised and systematic framework to manage our – employees as well as contractors – is a 24% human rights and labour standards. The policy employees in the region. We plan for the system fundamental tenet of our business. In line with 1. Preparing our business of our workforce are women includes commitments in relation to: to be fully operational in 2019. We also apply a our Group HSE Policy Statement, we are Safety, Health, Environment and Communities committed to the continuous improvement of • The provision of safe and healthy (SHEC) management system at our operations all our working environments and to achieving work conditions in Africa that is aligned with OHSAS 18001. Zero Harm. • Respect for employees’ rights to freedom management personnel. In addition, we of association and collective bargaining We respect the right of our employees to join In Kazakhstan, our dedicated HSE Committee, implemented an employee awards scheme In 2017, we implemented a new SHEC • The provision of a secure work place trade unions and bargain on a collective basis. which is comprised of corporate and regional to encourage the reporting of safety risks Policy for our Africa region aligned More than 90% of our employees are trade senior leadership, sets our strategy in relation to • The prevention of forced and child labour ••Safety management systems: This included with the IFC Performance Standards union members. occupational health and safety, reviews related our review and revision of our transportation TRADE UNION MEMBERS • Respect for equality, diversity and non- policies and procedures, sets the safety culture safety procedures (in the context of our discrimination and receives regular progress reports to ensure significant vehicle operations) and the • Implementation of a new programme to that the implementation of safety controls and All of our operations in Kazakhstan implementation of an automated incident address the causes of frequent but low impact These commitments are supported improvements are carried out. 2. Helping our people thrive +90% by the terms of our Code of Conduct. are certified to OHSAS 18001 data management system to ensure timely safety incidents (such as slips and trips) that and efficient communication of safety risks disproportionally contribute to lost time More than 90% of the Group’s In Africa, safety and broader sustainability

injuries (LTIs) employees are trade performance is reported monthly to our ••Equipment and workplace safety: This included union members regional Executive Committee, which includes an equipment risk assessment across all our • A cross-entity employee survey to benchmark the ERG Africa’s CEO; site General Managers; operations, and the development of a five-year safety culture against international standards site SHEC managers, and selected senior equipment renewal plan • Integration of operational risk assessments employees. At our operations in the DRC, we into capital expenditure planning We also conducted internal audits, and also operate formal Safety and Hygiene • Installation of video surveillance systems to Committee as required under local law. assessed the results with our corporate safety more effectively monitor high risk roles and and wellbeing standards. The findings have informed our Employees are represented on this Committee the ongoing use of drones to undertake high by trade union representatives. improvement plans for 2018.

risk site surveys 3. Community development NUMBER OF EMPLOYEES Embedding a safety-first culture through Our health and safety performance is reported Africa BY REGION ongoing training is a key component of our (through our Chief Financial Officer’s report) to In 2017, we implemented a new SHEC Policy safety management strategy. In 2017, we the Board on a regular basis. for our Africa region. This is aligned with trained around 100 health and safety trainers the IFC Performance Standards – including to help increase our capacity to deliver safety Performance Standard 2 (Labour and 69,090 Key issues and initiatives training across our operations in Kazakhstan. Safety improvements Working Conditions). The maintenance of a safe working environment Throughout the year, we also continued to We are in the process of rolling out an for our employees is a precondition for our deliver onsite safety training for operational integrated Isometrix software programme to Kazakhstan 62,100 operational work. To this end, we took a employees including site inductions, role- number of steps in 2017 to support the further enhance audit standards across our Africa 6,651 specific training and regular team safety continuous improvement of our safety operations in Africa. This includes an HSE briefings. Furthermore, we expanded our 4. Environmental stewardship Brazil 103 module (in addition to environmental and social performance. training to prevent unintentionally hazardous modules) to help centralise and standardise Corporate offices1,2 236 behaviours to our remaining entities in HSE audit standards, processes and outcomes, Kazakhstan Kazakhstan during 2017. In 2017, we rolled out our corporate safety whilst also improving central oversight and the generation of value-adding safety data analytics. improvement programme in Kazakhstan. Additional measures to support our safety The programme will be fully operational in 2018. This defines key areas of management focus, efforts included: mid-term targets and new initiatives. Key areas of focus and progress in 2017 include: • Ongoing risk assessments across all operational roles to inform the development ••Motivation, competence and awareness: of risk mitigation actions in 2018 – as well as a This included the rollout of our Employee broader society gap analysis of our safety risk management Our relationship with 1. Includes offices in Europe, Russia, UAE and China. Safety Motivation Policy to all operations in standards 5. 2. Headcount of corporate offices in Kazakhstan, Africa and Kazakhstan as well as new safety KPIs for line Brazil are included within each relevant region.

30 Eurasian Resources Group S.à r.l. Eurasian Resources Group S.à r.l. 31 Sustainable Development Report 2017 Sustainable Development Report 2017 Section 2: Helping our people thrive continued

We also carried out safety training, including: We also introduced dedicated managers in Individual health Performance Our investigations suggest that inadequate • Refresher training for operators on adherence Kazakhstan to strengthen oversight of our We are committed to addressing non- We regret to report that six fatalities took adherence to safety procedures, a lack of Over 7 million LTI-free to Group safety procedures onsite contractors, and we plan to roll this out occupational diseases that can have an place during the year (2016: 15). Of these, supervision over hazardous activities and hours at Metalkol RTR to our African operations in 2018. Efforts to impact on the health of our employees. three involved employees (2016: 10) insufficient control over contractors were • Awareness training for operational employees further integrate contractors into our safety In 2017, we carried out cardio-screening and three involved contractors (2016: 5). contributory factors in some of these fatalities. on Group policies and procedures relating to management processes in Africa, and to ensure for approximately 10,000 employees in Despite the reduction in fatal incidents, In response, we have: higher-risk aspects of operational safety In 2017, our Metalkol Roan their alignment with our safety standards, will Kazakhstan (2016: approximately 13,000). any fatality represents a major failure in • Strengthened our technical controls, including Tailings Reclamation (RTR) remain a key focus area. We also purchased additional defibrillators performance. As such, we will not rest until Introduction Brazil enhanced contractor control procedures for project in the DRC reached a and trained more than 120 employees we achieve Zero Harm. We would like to We have implemented a range of safety explosives management and increased Employee health (2016: more than 70 employees) on basic express our sincere condolences to the significant safety milestone of measures to ensure the safe and predictable supervision for hazardous works Occupational health defibrillator resuscitation techniques. families affected by these tragic events. over 7 million consecutive Lost development of our iron ore project in • Implemented audits of our health and Some of our workplace activities – if not Brazil. This includes the ongoing delivery safety management systems (including fatal Time Injury-free hours. proactively managed – can present latent risks In Africa, we provide free medical support to Each incident was subject to comprehensive of comprehensive safety training to all new risk protocols) to the health of our employees. This includes employees and their families. We also: investigation and appropriate prevention employees and contractors and additional This is particularly noteworthy as potential exposure to particulates, noise, measures have been implemented to reduce • Applied additional measures to improve our role-specific safety training for individuals • Participate in government vaccination operations typically feature higher vibrations and heat. As such, we implement the risk of them reoccurring. Three of these management of/engagement with contractors in higher risk operational roles. We also run campaigns and HIV/AIDS/tuberculosis levels of inherent safety risk during comprehensive occupational health fatalities took place at Boss Mining, where weekly ‘safety dialogues’ between management programmes their construction phase. programmes for all our employees. we are strengthening the enforcement In 2017, we also experienced 86 lost time and operational staff to facilitate effective • Implement malaria prevention measures injuries (LTIs) involving employees (2016: 94) of our fatal risk protocols (including the The team at Metalkol RTR worked closely communication and safety incident reporting. at our Frontier Mine and Metalkol RTR resulting in a lost time injury frequency rate In Kazakhstan, this includes: introduction of an additional fatal risk for the future work camps 1 with our main construction partner to protocol relating to tramming and working (LTIFR) of 0.69 (2016: 0.76). This includes the Contractor management • Mandatory annual medical examinations achieve this milestone. This included

• Provide antenatal healthcare at ERG reported employee fatalities. 1. Preparing our business near slow moving mining equipment), our implementing an intensive training Sadly, recent fatalities involving contractors • Onsite role-specific medical examinations Africa clinics contractor management practices and programme and matrix to foster a demonstrate why safety management in this • Workplace health risk assessments physical controls around key equipment. safety-first culture across our multicultural area remains a critical focus area (including In Brazil, we vaccinate employees against • Provision of relevant medical treatment workforce and to firmly embed our vision understanding potential gaps between seasonal flu and H1N1. We have also contractor and employee safety standards of Zero Harm into project planning. More In addition, we have implemented an Industrial implemented a health programme (‘Saúde de and/or behaviours). In 2017, we conducted than 5,441 training modules were provided Hygiene Programme across our African Ferro’) that provides physical activity clubs for contractor forums at all our entities in to Metalkol RTR staff. operations to help prevent occupational all employees. Kazakhstan. The forums provided a platform disease, protect employees’ health, monitor and for the communication of our corporate maintain regulatory compliance, and manage requirements, the gathering of feedback from key health risks. Key safety parameters and indicators by region our contractors and the generation of insight into how we can help our contractors stay safe. Kazakhstan Africa Brazil 10,000 Fatalities (employees only) 2 1 0 2. Helping our people thrive Fatalities (contractors only) 1 2 0 Employees in Kazakhstan provided with cardio-screening LTIs (employees only) 73 10 0

LTIs (contractors only) 8 2 0

LTIFR 0.70 0.50 0.0 and wellbeing 3. Community development Key safety parameters and indicators by year 2

2017 2016 2015 2014 Fatalities 6 15 10 17 (employees and contractors)

Fatalities 3 10 9 13 (employees only)

Fatalities 3 5 1 4 (contractors only)

LTIs (employees only) 86 94 95 97 4. Environmental stewardship

LTIFR (employees only) 0.69 0.76 0.74 0.70

broader society Our relationship with 5.

1. Employees only. 2. LTI and LTIFR include employee fatalities.

32 Eurasian Resources Group S.à r.l. Eurasian Resources Group S.à r.l. 33 Sustainable Development Report 2017 Sustainable Development Report 2017 Section 2: Helping our people thrive continued

2.2 Skills, capabilities and development Introduction Finally, the development of our potential and • The retraining of operators in DRC and Key Strategic Goals in the 2025 Strategy current young employees is vital to our Zambia on effective operational principles • The development of skills and knowledge longer-term ability to innovate and grow. This is • The development of our talent pool in the context of a shortage of young mining In Brazil, we implemented a performance specialists and outward migration from our evaluation programme across all levels of our

operating regions. To this end, we are workforce. This resulted in individual professional Having made significant progress in collaborating with over 70 educational development plans for all employees. transforming our organisation in recent years, institutions, including vocational colleges, mine we are now focused on embedding new and training institutions and universities (p48). In innovative ways of working throughout every Performance 2017, for example, we ran a joint programme In Kazakhstan, we invested US$4.2 million in level of our global workforce. with the Nazarbayev University which included training and skills development for our training in project management and innovation Our training and skills development efforts are employees (including spending on mandatory for the future for the winners of our first Innovators’ Forum. particularly relevant in the context of an ageing training delivered under ERG’s subsoil licencing workforce across the mining sector, increasing obligations). 1. Preparing our business New employee evaluation programme global competition for young mining specialists In 2017, we launched a structured programme and the isolated locations of many ERG In Africa, we spent over US$340,000 on such to assess employee efficiency with the aim of operations. efforts during 2017. building a transparent performance and capabilities management system. Key issues and initiatives Planning for the future In 2018, we plan to increase the number of Kazakhstan The programme included: ERG Academy training sessions offered through the ERG In 2017, we established the ERG Academy. • An integrated evaluation exercise of 1,402 Academy with a particular focus on ‘lean We plan, deliver and monitor all our training employees undertaken between November management’,1 leadership training and activities through this strategic skills 2017 and January 2018. This included 381 communication of Group strategy. development programme. Throughout the corporate employees as well as 98 senior year, employees received training on topics managers and 923 employees from our We also plan to do the following in Kazakhstan: entities 2. Helping our people thrive including Group strategy, operational and • Establish two corporate-level and four technical improvement, innovative thinking, • A ‘360 degree’ assessment of top management operation-level technical training centres

people management and leadership skills. In • Build on the success of our OPS-100 initiative Based on these results, we defined a list of 2017, we updated our ERG Academy curriculum by creating a new leadership academy, competencies that required further following a high-level analysis of our operations’ introducing job shadowing and mentoring existing and required skills. This resulted in enhancement. This will inform the definition of • Automate our recently introduced Planning for the future We will also plan to strengthen our safety additional emphasis on innovation, change specific development plans for each participant. management and business transformation. performance management system Contractor safety will remain Kazakhstan culture by: Africa and Brazil • Improve production and technical staff a focus area as we endeavour In addition to the actions already undertaken • Training additional health and safety trainers In 2017, the most significant training initiative In Africa, our skills development programmes competencies through an enhanced training and wellbeing in 2017, we are planning further measures to to achieve and maintain at the ERG Academy (p35), following our delivered through the ERG Academy was focus on performance management and programme as well as a new talent reduce the risk of fatalities. These include: successful training of around 100 trainers effective safety standards our Summer Team project in which 6,500 maximising the productivity of our workforce. management programme, structured 3. Community development across our operations • Implementation of technological solutions to in 2017 employees were trained as part of Expo 2017 competency frameworks and an online ‘talent remove employees from higher risk activities • Establishing additional specialist safety training Astana. The programme focused on enhancing Key initiatives included: platform’ to support career development • Provision of enhanced personal protective centres across our operations organisational learning, understanding external • The rollout of an integrated performance equipment for employees in higher risk roles • Implementing a ‘safety mentors’ programme economic dynamics and their implications for management system which we plan to be fully Other areas of focus will include a mentoring • Revision of our safety standards and to promote a safety-first culture throughout ERG, as well as Group strategy and values. operational in 2019 scheme for young employees, work-life balance procedures for higher risk roles our operations and business simulation training. Our employee development efforts place • The implementation of a succession planning • Integration of ‘lessons learned’ into employee and talent management programme to Africa particular emphasis on identifying high-potential 1. i.e. the development of streamlined business processes. safety training programmes individuals for future leadership positions. In support and develop our future leaders (to be In our Africa region we plan to further fully operational by mid-2018) strengthen our safety performance by: 2017, work continued on our OPS-100 initiative. Contractor safety will remain a focus area as we This focuses on: endeavour to achieve and maintain effective • Implementing measures to address issues

• Identifying the top-100 employees from our 4. Environmental stewardship safety standards across our operations. In identified in our 2017 safety audits (e.g. hot production units support of this, we are developing corporate work, excavation safety, rigging and slinging, contractor standards and implementing a and electrical safety) • Developing individual plans to support internal succession planning at our operations range of additional measures to improve • Introducing dedicated managers to oversee contractor safety. onsite contractors at our operations • Creating ‘talent pools’ to support the • Enhancing our integrated SHEC management development of high-potential individuals system, including through the integration of We also built on our 2016 assessment of fatal risk protocols into performance production and technical staff competencies by: management for senior staff

• Developing individual training plans to address broader society

• Delivering training on critical procedures to Our relationship with technical skills gaps Metalkol RTR safety officers and contractor 5. safety officers to ensure coordinated and • Applying integrated annual appraisals at cohesive team approaches Group and operation level

34 Eurasian Resources Group S.à r.l. Eurasian Resources Group S.à r.l. 35 Sustainable Development Report 2017 Sustainable Development Report 2017 Section 2: Helping our people thrive continued

Employee benefits in Supporting employee wellbeing through 2.3 Labour relations Kazakhstan the ERG Sports Club in Kazakhstan We provide a range of workplace benefits In 2017, we established the ERG Sports Club to our employees. This includes:

• Competitive base salaries and bonuses programme to embed a more strategic approach to Introduction employees fairly, equally and without prejudice, many young people to seek work in other parts Key Strategic Goals in the 2025 Strategy for the achievement of production increasing sports participation and improving lifestyle irrespective of gender, race, age, disability or of Kazakhstan – or abroad. targets • Improved employee wellbeing sexual orientation. • Additional financial support for choices amongst our employees in Kazakhstan • Increased employee engagement Standardisation of workplace employees who have large families or and cohesion conditions in Kazakhstan Key issues and initiatives children with disabilities Our holistic approach to labour relations in As a responsible employer, a main area of focus Kazakhstan is driven by the significant overlap is the ongoing standardisation of workplace • Extended maternity leave for female This included: • The introduction of a sports infrastructure In Kazakhstan, we place strong emphasis on and interconnectivity between our workforce conditions and employee benefits. This is with employees (in excess of what is required modernisation programme to standardise meeting the social needs of our employees and • The establishment of a new team, the and local communities. the aim of raising all operations up to Group- by law) and upgrade our facilities across our their families. In particular, we aim to ensure primary focus of which will be the wide standards. • High-value training and skills operating regions, providing equal access they enjoy a decent standard of living in our local promotion of active and healthy lifestyles As such, in addition to the provision of our total development programmes (p35) among employees and facility standards for all employees communities, some of which are geographically Initiatives in 2017 included: employee rewards package, we invest in a range for the future remote and highly reliant on ERG’s activities. • Targeted awareness campaigns to more • The introduction of a programme to train of social initiatives outside of the workplace. In addition, in 2017 all staff at production • The launch of a healthcare services effectively promote healthy living health and fitness instructors to support These initiatives are focused on materially entities in Kazakhstan received a pay rise. 1. Preparing our business A key component of our Group-wide approach standardisation programme with the aim employee exercise and prevent sports improving the living, leisure, nutritional and to labour relations is our constructive of improving the quality of healthcare for Plans for 2018 include: injuries health conditions of our employees and their interaction with employees’ unions on issues our employees families. This supports the development of a Employee social investment in Kazakhstan • The hosting of our second Group ranging from pay and benefits to health and • An ongoing renovation and standardisation motivated, safe, productive, stable and loyal As part of our efforts to meet the social needs Spartakiad – an employee sports safety. We respect the right of all employees to programme of onsite facilities, such as for workforce – whilst also promoting broader of our employees and their families, we competition based on teams representing join unions and to freely engage in collective example, canteens and showers (using local community development (p37). delivered a range of benefits in 2017, including: our entities. The first Group Spartakiad took bargaining. More than 90% of the Group’s construction firms and suppliers where place in 2016 and involved over 400 employees are trade union members, and possible) • The construction of affordable modern Furthermore, our approach supports our accommodation and its provision to employees collective bargaining agreements are in place at • The auditing of 73 employee canteens to future skills pipeline by incentivising multiple employees on preferential terms of finance • The hosting of our first ERG Marathon for 400+ the majority of our operational entities. assess compliance with Group-wide food generations of employees and their families to under our Affordable Housing Programme. employees and external stakeholders. service and quality standards. The results will Employees involved in our first settle and thrive within our operating regions This included three large-scale, multi-storey Furthermore, we are committed to the inform a programme to address these issues Group Spartakiad in Kazakhstan – including through youth job creation within accommodation buildings in Kostanay and These are large-scale events involving a

principle of equal opportunity in employment 2. Helping our people thrive our operations and outside them. This is and implement uniform standards across significant number of community members and the maintenance of a fair and non- Aktobe for 200 employees and their families. particularly relevant given an ongoing trend for all operations discriminatory work environment. We treat our We are implementing this programme in partnership with local authorities and financial

institutions • The launch of a programme to overhaul and modernise employee transportation networks in Aktobe, Kostanay and Pavlodar regions. This involved the phased implementation of quality standards for all ERG-owned and contracted

transport, as well as close coordination with and wellbeing relevant local authorities to improve public

transportation used by our employees 3. Community development • Investment in a wide range of social infrastructure across our operating regions. This includes health clinics, sports centres, swimming pools, and cultural and recreation areas. These facilities are available for our employees and their families, with discounts provided for retired workers and disadvantaged and/or large families • Investment in a wide range of educational and entrepreneurship programmes to support the development and future job prospects of the children of employees – as well as other 4. Environmental stewardship community members. This includes our support for STEM Laboratories (p48), our

Student Entrepreneurship Ecosystem Programme (p47) and the funding of scholarships at vocational schools and universities broader society Our relationship with 5.

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Employee relations in Africa Performance During 2017: During the year, we placed significant focus on In Kazakhstan, we did not experience any strikes • We did not identify any of our operations as improving direct employee engagement as well or threats of strikes in 2017. This reflects presenting risks to workers’ rights to freedom as the benchmarking and enhancing of our positively on the consistent and constructive of association and collective bargaining rewards package. Measures included: nature of our relations with labour unions, as • There were no reported incidents of well as our strong focus on addressing the • The implementation of Project Baobab, a discrimination at our operations cross-functional review to transform our social challenges faced by employees living in

• There were no incidents of forced labour Introduction organisational processes and structures – and our local communities. Peers operating in the or child labour at our operations to give our employees a ‘voice’ in shaping the same regions have experienced recent transformation of our business (p23) instances of strike action. • The rollout of an employee engagement In Africa, we experienced only two minor strikes: survey at Boss Mining and CCC in the DRC. This focused on issues including career • A two-day stoppage at Boss Mining by

development, pay and benefits, training and production staff demanding a salary rise working conditions. Based on this, we • A one-day strike at our Frontier Mine involving launched several initiatives to improve (mainly) production staff demanding the employee engagement, training and internal payment of production bonuses communication • The benchmarking of salaries across our No significant labour relations issues took place for the future operations in Africa, undertaken to assess the in Brazil during the year.

competitiveness of our remuneration 1. Preparing our business packages relative to peers and to measure equity across our salary bands 2. Helping our people thrive

and wellbeing

• Continue work on our transport

Planning for the future 3. Community development In Kazakhstan, we plan to standardise our modernisation programme. This will include In Kazakhstan, we are focused on approach to human resources across our investing around US$1.9 million to purchase standardising workplace conditions operations (including recruitment, training 15 modern buses and more than US$130,000 and employee benefits and talent management). In addition, we to renovate approximately 100 existing buses. will also: We also plan to establish joint ventures with local transport providers to further improve • Complete construction of 18 new transportation provision accommodation buildings under our Affordable Housing Programme, providing In Africa, we are in the process of establishing housing to more than 1,300 employees and a competitive rewards and remuneration their families framework based on market benchmarking • Continue implementation of our healthcare undertaken in 2017. This includes the services standardisation programme. For implementation of short- and long-term 4. Environmental stewardship example, in 2018 we plan to outsource the incentive schemes, where appropriate. healthcare centres in Rudnyi (Kostanay region) We plan to complete this initiative in 2018. and Pavlodar to improve the quality of

healthcare services for our employees at SSGPO and Aluminium of Kazakhstan broader society Our relationship with 5.

38 Eurasian Resources Group S.à r.l. Eurasian Resources Group S.à r.l. 39 Sustainable Development Report 2017 Sustainable Development Report 2017 Section 3

3.1 Community Materiality Community impacts Many of our local communities Introduction development have effectively developed around our operations. As such, we do not

and wellbeing P43 manage our operations in a vacuum Supporting the development – but see them in the context of the and wellbeing of our communities local socio-economic ecosystems in for the future which they are embedded 1. Preparing our business

In Kazakhstan, for example, we play a significant Finally, whilst our operations in the DRC can 3.2 Community role in the lives of our local communities. This is deliver high levels of assurance regarding the as a result of our current and historical provenance and conditions of extraction of the investment generation of employment for local people, cobalt and copper we deliver to customers, we the relatively remote nature of our local are aware of the challenges that exist on or communities, as well as a track record of near our concessions. These include illegal and/ delivering a range of public services, including or hazardous artisanal and small-scale mining housing, infrastructure, education and power. (ASM) activity that can be linked to a range of negative environmental and social impacts. As a 2. Helping our people thrive Our African operations are located amongst responsible cobalt and copper producer, we are rural communities. One of the main challenges taking a number of proactive steps to address facing our local community members, particularly these challenges.

in the DRC, is a lack of formal employment opportunities and high levels of poverty. We also believe, however, that regulated ASM P46 However, the technical skills required to run (i.e. legal ASM that takes place in government our operations means our ability to employ created artisanal mining zones outside of our local people is limited. Instead, we focus on concessions) is an important source of income supporting community-led social investment for local communities. If carried out in a activities, including alternative income generating responsible way, regulated ASM can make a opportunities that are independent from our meaningful contribution to broad-based local and wellbeing operations and support for basic services. economic development.

3. Community development In this context, we are committed to actively Key issues with respect to community managing both our positive and negative wellbeing include: impacts on local communities. This – as well as • Community impacts close, ongoing engagement with our • Community investment 3.3 Our approach to communities – is vital if we are to develop and maintain our social licence to operate and to • Our approach to artisanal and small-scale artisanal and small- continue accessing new growth opportunities. mining scale mining Relevant Priorities Key UN Sustainable

in the 2025 Strategy Development Goals 4. Environmental stewardship Focus area: Sustainable development of the regions

• The improvement of social wellbeing in our operating regions

P51 broader society Our relationship with 5.

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How we manage our interactions • Integrating engagement feedback into project with communities planning and community investment activities We are committed to maximising our Our commitments • Seeking to avoid involuntary resettlements, positive impacts on communities – We are fully committed to supporting and, where this is unavoidable, constructively whilst minimising any negative 3.1 Community impacts community investment programmes that engaging with local communities in line with impacts maximise our positive socio-economic impacts. relevant laws and international standards In line with our new Group Corporate Social Responsibility (CSR) Projects and Sponsorship Implementation of our commitments Introduction Policy rolled out in 2017, we focus on a range of In Kazakhstan, we implement our Group CSR In Africa, we implement a Safety, Health, Key Strategic Goal in the 2025 Strategy Projects and Sponsorship Policy through a issues including: Environment and Communities (SHEC) • The improvement of social wellbeing systematic process framework. This ensures a • Infrastructure and social welfare management system. Amongst other things, in our operating regions comprehensive, well-targeted approach to the this provides a systematic framework to: • Education and support for youth initiatives identification, implementation, monitoring and

• Identify, assess and manage negative impacts • Sports and promotion of healthy lifestyles review of our community investment. We believe that responsibly managing our on communities • Community training and development impacts is not only the right thing to do, but also • Manage, monitor and control community programmes Community investment in our operating regions helps maintain our social licence to operate. takes place through two channels: grievances and issues This is underpinned by ongoing community This is underpinned by close, ongoing • Maintain open and enduring relationships engagement to help ensure we are responsive community engagement to help us align our • Direct social investment: Targeted at with community leaders to the concerns, needs and aspirations of local programmes with community concerns, needs maximising our positive impacts and • Proactively engage and consult with communities. for the future and aspirations (p45 and p56). minimising our negative impacts on local communities through the project lifecycle Our positive impacts on local communities 1. Preparing our business communities • Recognise the value of cultural heritage and We are equally committed to minimising our (beyond the provision of targeted community • Social partnership investment: Negotiated cultural diversity, and protect cultural sites negative impacts on host communities. In line development spending – see p46-50) include: strategic partnerships with local authorities • Identify, and support the development of with our Group Human Rights Policy, this targeted at broader socio-economic • Employment generation includes: sustainable social projects, with a focus on development of local communities (some of education, health, alternative livelihoods and • The purchase of goods and services from • Respecting the rights, cultural heritage and which are undertaken as part of our the prevention of child labour local/locally-based suppliers (p68) customs of local communities licencing obligations) • Broader local economic growth generated by • Engaging with local communities to assess the third-parties potential impact of our activities – including a • The development of operational infrastructure focus on risks, impacts, remediation, that also benefits local communities (e.g. mitigation and monitoring power, transportation, etc.) 2. Helping our people thrive • The payment of taxes and royalties, some of which are distributed at the local level (p68)

We are conscious, however, that unless properly managed, mining and other heavy In Africa, we worked with an external consultancy In 2017, we also carried out a range of internal industries can also undermine the interests of to update the existing environmental and social audits at our entities in the DRC – as well as local people – including through inward impact assessments (ESIAs) at our operations in Chambishi Metals in Zambia – against the migration, pollution, property damage, inflation the DRC – including through the conduct of requirements of the IFC Performance and other factors. formal community consultations. This included, Standards. This was with the aim of identifying

as part of our efforts to bring our management and addressing any existing gaps in process and wellbeing Key issues and initiatives systems and practices closer in line with and performance – and the delivery of higher Impact assessment international best practice, their alignment with levels of future assurance to our national and We conduct comprehensive impact the requirements of the IFC Performance international stakeholders. We also engaged 3. Community development assessments and community consultations Standards. with international NGO Pact to support the whenever undertaking any major developments training of our security personnel on or operational changes – in line with national As a result, in 2017: responsible human rights practices. legal requirements and relevant international standards. In Kazakhstan, for example, we • The updated ESIA for Boss Mining was completed and accepted by the government Under our licence agreement in Brazil, we are conducted around 40 public hearings in 2017 funding research to deepen our understanding • The updated Frontier Mine ESIA was related to project changes, with the most of aquatic wildlife near to the port development, completed and submitted for government significant being: Porto Sul. Monitoring has been undertaken approval • Open-cast mining of a clay-rich deposit near since 2013, and is maintained by a joint team the city of Aksu • Progress was made on updating the Metalkol drawn from Bahia Minerção (BAMIN), the • The refurbishment of the Aksu Ferroalloy RTR ESIA and it will be submitted for community and the local fishing industry. 4. Environmental stewardship Plant’s Workshop No.6 government approval in 2018 The team is building and maintaining a deep understanding of fishing activities and water • Construction of the DNK underground mine • Progress was made on updating the ESIA fauna in the area surrounding the port at Kazchrome for Comide, but it is yet to be completed development, collecting all information in a In addition to the ESIAs, we have implemented a central database for ease of analysis and grievance mechanism procedure to help better tracking. In 2017, BAMIN invested around identify and manage our negative impacts, US$200,000 in this programme. This is in supported by social management plans to addition to our undertaking of an updated address identified impacts. socio-economic study of nearby communities. broader society Our relationship with 5.

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Participatory Rural Appraisals in Africa

We believe that local communities should

play an active role in – and take ownership of – their Introduction own sustainable development

In 2017, we completed Examples of community priorities We support the PRAs in parallel to – and in Participatory Rural Appraisals identified through the 2017 PRAs included: support of – our broader community social investment activities. (PRAs) within 11 local • Food security

communities in the DRC. • Educational standards for the future • Health facilities 1. Preparing our business The PRAs help communities identify their • Water distribution own development priorities – and create • Sanitation sustainable Community Action Plans (CAPs) to address these needs based on available Following these collaborative discussions, the capacities, the capabilities of local institutions 11 11 communities each developed a CAP, the and the availability of external assistance. implementation of which will be managed by Participatory Rural community-led committees. ERG will work Appraisals completed within closely with these committees to support local communities in the DRC in 2017 relevant projects and to help address challenges as they arise. 2. Helping our people thrive

Legacy complaint against ENRC • Communications channels and grievance • Early work on community facilities: this is being As noted above, we have grievance mechanisms procedures: regular meetings now take place addressed in line with the above mentioned and community engagement processes to with the representatives of both communities. PRA and CAP processes to ensure identify potential complaints. We are committed A registry has also been set up to prevent development efforts are fully led by the to ensuring that these complaints are reviewed future damage to historical and cultural sites in Kisankala community itself. and wellbeing promptly and appropriate action is taken. both communities. In addition, we have

established a Participatory Rural Appraisal (PRA) The NCP issued a Follow Up Statement in April 3. Community development In 2016, the UK National Contact Point (NCP) process – and related Community Action Plan 2018, in which it set out further actions that it for the OECD Guidelines for Multinational (CAP) – to support the Kisankala community in believes are needed to fully satisfy their Enterprises issued a Final Statement After the identification of their own needs and the recommendations. We are examining these to Examination of Complaint. This followed a implementation of community-led inform our planning for 2018. legacy complaint against ENRC, made on behalf programmes to address these needs. of the Chiefs of the Kisankala and Lenge villages • Staff/security contractor standards of conduct Resettlement at Metalkol RTR and their communities near our Comide and mining schedule: regular meetings with In 2017, we concluded a successful community concession. The final statement alleged that representatives of both communities are used engagement process in relation to the planned ENRC had “not engaged effectively with two to raise awareness on scheduled mining voluntary resettlement of 16 families from the stakeholder communities on the concessions, activity and the security issues associated with Samukonga community near the Metalkol RTR and has not taken adequate steps to address the mine. Likewise, we have developed a list of project in the DRC. The need for resettlement impacts on the communities that arise from rules for our employees and concession was identified through our ESIA due to the 4. Environmental stewardship delays in taking forward mining projects”. holding partners to abide by. potential health and safety impacts related to the project. The new resettlement village (which • Use of influence to ensure continuing Whilst the complaint relates to ENRC legacy will offer a better standard of accommodation)

unrestricted community access to the water issues, we are committed to responding to the is under construction and the voluntary supply provided in 2007-2008: the challenge concerns of our local communities and to taking relocation is scheduled to take place in 2018. of maintaining an ongoing supply of clean a ‘beyond compliance’ approach to managing water at the Kisankala site has been resolved. our impacts. As such, we have set out some of In addition, we paid compensation for crops to We continue to provide water from the well at the relevant activities we took in 2017 – in the more than 500 farmers in the operating region Kisankala free of charge and without the context of the NCP’s recommendations: of Metalkol RTR. community paying any maintenance costs. broader society

Progress has also been made on drilling for a Our relationship with permanent water source for the community. 5.

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Set out below are the projects that benefit our For example, we supported a one-day event as local communities (including, where relevant, part of the 2017 Skolkovo Start-Up Tour in Supporting youth employees and their families). Projects that only Almaty, a competition aimed at identifying and 3.2 Community investment targeted and benefited employees are covered supporting innovative new business start-ups. job creation through in ‘Labour Relations’ on page p37. Out of 50 projects presented by participating the Student entrepreneurs, 19 were selected in four areas: Entrepreneurship Improving living standards smart industry, new materials and energy, smart

We invest in improving living standards across environment and e-commerce/fintech. At the Ecosystem Programme Introduction our operating regions. Much of this is delivered event, ERG awarded a special grant to fund a Key Strategic Goal in the 2025 Strategy Key issues and initiatives – Kazakhstan through our negotiated strategic partnerships project on the development of metal powder • The improvement of social wellbeing (or memoranda of understanding) with local for additive technologies. In 2017, we launched the Student in our operating regions In Kazakhstan, our approach to CSI authorities. In 2017, this included: Entrepreneurship Ecosystem Programme, a multi-year initiative to develop ‘ecosystems’ is framed by the following issues: • The reconstruction of the Central In addition, in 2017 we spent around of talented entrepreneurs throughout our In Kazakhstan, our community investment efforts Embankment of Aksu city in Pavlodar region US$40,000 sponsoring Kazakhstan’s first two 1 operating regions. The programme will are driven by the inextricable, long-standing (US$613,000) Makeathon Tikkun Olam Makers (TOM) events. support the transformation of regional relationship between ERG and the local These events are organised by Kazakhstan • The reinstallation of boiler facilities from universities into centres of entrepreneurial communities in our operating regions. We place Tel-Aviv University Friends Association to help residential buildings in the village of Shakhan excellence. Over the long-term, this will particular emphasis on improving the lives of young inventors develop technologies to in Karaganda region (US$158,000) contribute to the development of innovative our employees and their families outside of the support people with disabilities. The inventors • Repair of the Gornyak Stadium in Rudnyi city business start-ups to support youth job workplace (i.e. as local community members) as Legacy Government with the best ideas are then offered for the future in Kostanay region (US$129,000) creation and regional economic well as on supporting broader socio-economic scholarships to help bring their ideas to fruition. communities partnerships diversification. development in our operating regions. The events in Kazakhstan resulted in the 1. Preparing our business We also invested in a range of initiatives to development of a new rehabilitation simulator Many local communities have, in effect, A significant proportion of our community support socially vulnerable and disadvantaged The programme was successfully piloted In Africa, we focus our community investment for people with musculoskeletal conditions. developed as a direct result of the existence development spending is invested through groups. This included: in 2016 at Pavlodar State University, with efforts on addressing the most material The simulator has already been installed at a of our operations over multiple decades. negotiated strategic partnerships (or assistance from the Kazakhstan Tel-Aviv development challenges facing rural • A contribution to the purchase of a building neurorehabilitation centre in Karaganda. However, we are aware of the need to reduce memoranda of understanding) signed University Friends Association. In 2017, it communities in our operating regions, many for use by the Pavlodar regional social community dependency on ERG through, for annually with regional governments. These was live in nine universities (including in of which live in conditions of extreme poverty. rehabilitation centre for the disabled and example, strategic investment in regional partnerships are critical for delivering Aktobe and Karaganda). To this end, we undertake community elderly (US$368,000) economic diversification and youth skills broader socio-economic development for 2 investment activities focused on infrastructure, • The funding of relief efforts for residents Tugan Zher development. This is in the context of the local communities with particular focus on One of the principal socio-economic education, healthcare and food security, affected by floods in the Karasu district finite life of some of our operations and our infrastructure development, education and Programme challenges facing Kazakhstan is how to amongst other issues. (Kostanay region) (US$245,000) increasing application of automation. youth development, sport, healthcare and develop high-tech industrial growth that social cohesion. • Sponsorship of SOS Children’s Villages of can provide employment for a growing 2. Helping our people thrive

In 2017, we initiated a socio-economic baseline Kazakhstan initiative to support children In 2017, we completed an generation of talented workers. study to help measure the impact of our without parental care and families at risk initial baseline socio-economic community social investment (CSI) in the DRC. (US$26,000) This challenge is particularly acute in our This will inform our future activities. assessment under our Tugan Zher Programme, an ambitious remote operating regions as many young Entrepreneurship and business incubation people are taking up public and private initiative launched in 2016. Employees and In Kazakhstan, we aim to reduce We invest in the future of our local communities sector jobs in the major cities, rather than community dependency on ERG by through our support of entrepreneurship, utilising their entrepreneurial skills within Community investment in Kazakhstan local communities business incubation and capacity building This assessment has helped us to better their own communities. benefits a wide range of community promoting economic diversification programmes. This includes particular emphasis understand the specific challenges and members – including our own This unique community context means we and youth skills development on youth initiatives as a means of developing needs of our local communities, and The Student Entrepreneurship Ecosystem particularly those of our employees and and wellbeing employees and their families actively target part of our CSI spending on alternative economic opportunities for future Programme is part of our response to this improving the lives of our employees and generations (i.e. outside of our operations). their families, in each of our mining towns challenge. In addition to direct investment (i.e. local cities that are economically their families outside of the workplace (i.e. as By doing so, we: in the programme, ERG: 3. Community development dependent on our operations). The local community members). These efforts • Promote regional economic diversification • Works closely with partner universities focus on ensuring that our operating regions assessment is based on analysis across 16 • Deliver assurance to our employees that their to help develop their ‘transformation’ are places where multiple generations of development indicators, including children have a future in their hometowns standards of housing stock, transport strategies and related training employees and their families will choose to programmes live and work over the long-term. • Build local supplier, contractor and skills infrastructure, water supply and sanitation, pools that our operations can potentially power infrastructure, healthcare and • Offers its technical facilities and benefit from education. laboratories for use in research and development • Help local communities to become more All of the initiatives cited in this chapter that self-sustaining over the long-term • Supports students in business and were carried out under memoranda of financial planning understanding with our local authorities In 2017, we also participated in a range of • Engages business mentors to advise fall under the Tugan Zher Programme. other external initiatives aimed at supporting students on monetising their ideas 4. Environmental stewardship innovative new business in our operating regions.

broader society Our relationship with 5.

1. http://tomglobal.org/ 2. ‘Tugan Zher’ translates as ‘Homelands’ in Kazakh.

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Education Healthcare Key issues and initiatives – Agriculture We place particular emphasis on supporting Supporting future labour markets We finance enhanced healthcare infrastructure Africa and Brazil We continued to fund an agricultural educational programmes focused on the through STEM Laboratories to support the wellbeing of our current and As a major cobalt and copper producer in the co‑operative at Boss Mining, providing seeds scientific and technical disciplines that will retired employees, their families and the wider DRC, we are operating responsibly in one of the and fertilisers to local families. underpin future economic growth and job communities in our operating regions. In 2017, least developed countries in the world. creation. ERG is funding the establishment of STEM1 this included the provision of funding for the Education construction and maintenance of health centres The local context means we face heightened Access to adequate formal education presents These efforts are also vital for the development Laboratories across our operating regions, with the and medical centres near our operations in the community expectations around employment an acute challenge for local communities in the Introduction of ERG’s own future skills pipeline and provide first constructed in early 2018 Pavlodar and Kostanay regions. provision that we are – due to the nature of our DRC. To help address this challenge, we support assurance to current and future employees that operations – unable to meet. As such, we invest 17 primary and secondary private schools near their children can look forward to promising Under our negotiated strategic partnerships in social investment programmes aimed at Boss Mining. futures in our operating regions. with local governments, we have also making a lasting positive impact on the lives of implemented a programme to incentivise young our local communities whilst avoiding future In 2017, we also supported schools close

These innovative institutions will increase The programme is being implemented in We support a range of educational institutions doctors to live and work in our operating dependency. to our other operations. This included our (and their students) in Kazakhstan, including access to modern teaching methods and partnership with local educational authorities, regions. In 2017, we invested more than commitment of more than US$90,000 in educational technologies for school children including the Education Department of mine training centres and vocational colleges. US$90,000 in the programme to provide These conditions of underdevelopment also funding for the construction of new classrooms, in our remote operating regions in Astana, and educational charity Bolashak This includes, for example: financial support to 19 young doctors, most of result in some local communities engaging in the enlargement of existing classrooms and Kazakhstan. Pupils attending the Laboratories Engineering. • Direct investments in infrastructure and whom commenced work in provincial hospitals artisanal and small-scale mining (ASM) that, the provision of new equipment at Maseya will be taught: facilities, as well as educational programmes in the Kostanay region. whilst offering money-earning opportunities to primary school in Kisankala near our Comide Under the programme: for students • Engineering local people, can be associated with negative operation. We identified this project through for the future • ERG provides funding for technical Sports, culture and wellbeing the Participatory Rural Appraisal (PRA) • The provision of scholarships for talented • Computer programming (including coding community impacts (p51).

equipment We are conscious that community wellbeing process after communities raised concerns 1. Preparing our business students at local educational institutions languages such as Scratch, Java, Python, etc.) • The Laboratories are staffed by the local relies on more than narrow economic At our iron ore project in Brazil, levels that the inward migration of the children of • Scholarships and tuition payments for young authorities, who benefit from training and development. As such, we implement of underdevelopment are not as acute as in the artisanal miners was putting pressure on the people from local orphanages to train at the • Robotics technical support delivered by Bolashak programmes to support the broader ‘social DRC. Nonetheless, local communities face a school’s capacity. The new classrooms will Khromtau Mining and Technical College, as • 3D modelling Engineering fabric’ and quality of life of local communities, range of challenges related to, for example, accommodate an additional 150 children, and well as the potential provision of employment including sports centres, swimming pools, restricted water availability, poverty, could potentially help reduce the number of opportunities at our own operations As such, we are helping future generations The first Laboratory opened in February 2018 holistic therapy centres, and cultural and unemployment and inadequate provision of local children engaged in artisanal mining. – including the children of our employees – to at a secondary school near Astana. As well as recreational areas. These facilities are accessible public services (especially healthcare). This, in develop the necessary skills to excel in the providing education for pupils from the local to our employees, their families and local addition to historical voluntary resettlement, Healthcare job markets of the future. This, in turn, will school, the Laboratory is open to all school communities and we provide discounted access means we place particular emphasis on the The prevalence of relatively weak health contribute to long-term economic children from grades 5 to 11 from the local for our retired workers as well as for careful management of our community impacts indicators in our local communities in the DRC diversification and growth within our Koktal housing estate. disadvantaged and/or large families. and social investment activities, which helps means we also focus our social investment 70+ operating regions. efforts on improving healthcare services and 2. Helping our people thrive

support this strategic growth project’s social Educational institutions that 1. Science, Technology, Engineering, Maths. Significant projects in this regard (undertaken as licence to operate. behaviours. For example, in 2017 we supported ERG supports in Kazakhstan part of our negotiated strategic partnerships an existing medical clinic in the village of

with relevant local authorities) included: Infrastructure Kimfumpa near our Frontier Mine. In line with • Support for regional football and volleyball We invest in a wide range of infrastructure our Participatory Rural Appraisals (PRA) process, teams in the Pavlodar region (US$4.3 million) improvements to support community we helped the community submit a formal request to the local health authority to provide • The construction of a 50 metre, 300-seat development near our operations in the DRC. a nurse to staff the clinic. As a result of these swimming pool in the Usolsk district of This includes funding road and bridge repairs, efforts, the clinic now has a dedicated nurse. Pavlodar city (US$3.1 million) providing power free of charge, and drilling wells and installing pumps to improve access However, it still requires medicine and • Support for football in Kostanay region equipment before it can begin serving the local

to water. and wellbeing (US$1.1 million) community. We plan to contribute funding • Support for ice hockey in Kostanay region In 2017, for example, we funded the towards these supplies in advance of the clinic’s 3. Community development (US$318,000) construction of water wells and installation scheduled opening in 2018. of solar-powered pumps in the villages of Investment in cultural activities and Kisankala, Kisanfu, Lenge, Kimfumpa and In Brazil, we continued to support the São José infrastructure as part of our negotiated Sakania in the DRC. This was undertaken in – Santa Casa de Misericórdia Hospital in the strategic partnerships with relevant local direct response to community concerns city of Ilhéus, which faces significant funding authorities included: identified through the Participatory Rural pressure. We mainly provide funding to support catering for employees, patients and visitors. In • The construction of the Palace of Youth Appraisals (PRA) process (p45). Upon 2017, we invested over US$200,000 to support Creativity in Aktobe (US$1.8 million) completion, ERG provided training to the hospital. • The installation of children’s playgrounds and community-run water committees, which street exercise equipment in parks in the cities have since taken over responsibility for the of Pavlodar and Aksu (US$631,000) maintenance and operation of the systems (with ongoing support from ERG). • The modernisation and improvement of the 4. Environmental stewardship Shakhtar Culture and Recreation Park in In Brazil, we are working to address restricted Ekibastuz (US$920,000) clean water availability for local communities.

Following unsuccessful attempts to drill for new water sources, we are planning to pump clean water from neighbouring concessions to meet community needs. We anticipate this will be completed in 2018. broader society Our relationship with 5.

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Performance Planning for the future In 2017, our worldwide community social We plan to build on our existing community investment (CSI) contributions were around OP I PEI E investment programmes in Kazakhstan US$111 million (2016: US$56 million). m through a range of key projects including, 3.3 Our approach to artisanal and but not limited to: The significant increase in CSI spending • Expansion of our Student Entrepreneurship small-scale mining between 2016 and 2017 reflects donations Ecosystem Programme, including the rollout

Introduction totalling US$61 million to the Foundation of the of additional events to support young First President of the Republic of Kazakhstan entrepreneurs in our operating regions – Elbasy (the Foundation). The Foundation • The opening of additional STEM Laboratories is primarily using this funding to enhance in Astana and in other cities in our operating community recreation and healthcare facilities regions (p48) in Astana and Almaty, whilst approximately

US$21 million of the funding is being used • Development of a comprehensive social for the reconstruction of the Foundation’s strategy to raise living standards in our mining building in Almaty, which is used to deliver I PEI EIO towns (i.e. to further standardise living youth projects. Further additional funding m conditions across our operating regions) will be assigned to the Foundation in 2018. aahstan In addition, we plan to implement a more

In addition, US$15 million was donated extensive benchmarking of community for the future to fund the completion of construction of socio-economic conditions against relevant the state botanical garden in Astana. frica United Nations Standards and national average 1. Preparing our business living standards (e.g. including availability of public services as well as standards of living). rail This will help us to better target future community spending to ensure local communities, including our employees and their families, enjoy a similar quality of life, irrespective of where they live.

I PEI I H PE In Africa, we are investigating opportunities to m support alternative livelihoods outside of our operations. This includes, for example, irect • Land degradation as a result of poor community farming projects aimed at investments Key Strategic Goal in the 2025 Strategy 2. Helping our people thrive operational management In 2017 we implemented a cobalt sustainably increasing agricultural production to ocial • The improvement of social wellbeing partnership generate income for local communities from • Inward migration of artisanal miners and their chain of custody and third-party investment in our operating regions families, placing strain on basic local services assurance programme at

the sale of surplus crops. This is in addition to ongoing efforts to commercialise our existing Metalkol RTR agricultural projects. As a cobalt and copper producer in the DRC, we In this context, we took a number of steps in are implementing a number of measures to 2017 to enhance our management approach to address the negative impacts of illegal and/or ASM and to help address irresponsible practices irresponsible artisanal and small-scale mining within local ASM communities. These included: Delivering assurance to customers and (ASM) taking place on or near our concessions. • The recruitment of an ASM mining specialist end-users at ERG Africa with a specific remit to develop We took steps to deliver higher levels of and wellbeing ASM-related child labour, along with other a more systematic management approach assurance to our potential cobalt customers, challenges associated with illegal and/or to ASM amid concerns that ore produced as a result of irresponsible ASM in the DRC, is a matter of 3. Community development • The undertaking of enhanced analysis of the illegal and/or irresponsible ASM activity could intense international concern – particularly in drivers behind ASM in and around our enter the supplies of responsible operators in relation to cobalt. As such, downstream actors concession areas the cobalt value-chain. This is in the context of in the metals value chain are making ongoing heightened global concern that the rapid efforts to ensure that their own metal supply • The development of strategies to help us work growth of battery technology and electric chains are not contributing to this serious issue. side by side with ASM communities at our vehicles could drive labour and human rights This means we need to provide our cobalt Boss Mining exploration sites in a safe abuses linked to unregulated ASM communities customers with assurance that there is no way manner. This included the holding of public in the DRC (the primary global source of cobalt). that irresponsibly mined material from ASM consultations at ASM communities in Milebi, sources can enter our own stock. Mindingi and Menda, during which ERG This included starting work on the representatives explained planned work implementation of a cobalt chain of custody Key issues and initiatives methods, time schedules, behavioural rules and a third-party assurance programme at the

for personnel and contractors, and grievance 4. Environmental stewardship Addressing local challenges linked Metalkol RTR project. The programme is procedures to ASM activity scheduled to be ready for first production in Illegal and/or hazardous ASM activity taking • The adaptation of our processes to ensure 2018. This assured chain of custody will enable

place on or near our assets can be linked to a that confiscated ore from illegal ASM customers to purchase cobalt from Metalkol number of negative community impacts. These operations is stored and not used in our RTR with confidence and easily integrate the can include: production mineral into their own responsible trading and • Child labour production processes. Furthermore, it will help This is in addition to our ongoing support for a them deliver high levels of assurance to their • Poor health and safety standards range of related projects under our Clean own customers and end-users. • Inadequate and exploitative working Cobalt Initiative (p52). broader society

conditions Our relationship with • Pollution resulting from improper 5. processing practices Photo credit: (Photo courtesy from) Good Shepherd International Foundation/Nyokabi Kahura.

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Performance Planning for the future The Clean Cobalt Initiative Our investment in the Good Shepherd Future planning in the DRC is currently focused International Foundation initiative is helping on the following areas: approximately 1,000 vulnerable children to • The development of a new ASM Management US$1m access basic education and other services (e.g. Plan including a dedicated ASM Policy, Amount pledged to support a three-year counselling, healthcare and access to referral engagement procedures and related Responsibly produced cobalt remained a partnership with the Good Shepherd systems for physical abuse). management systems (such as an ASM

International Foundation to help address Introduction focus for ERG and the broader cobalt industry incident reporting system) During the year, the initiative also supported: socio-economic challenges near Metalkol RTR throughout 2017 • The development of partnerships to address • Over 180 families that participated in ASM in our area of influence alternative livelihood activities to improve food security and income generating opportunities

• 228 girls and 128 women who participated in economic empowerment projects • 3,294 community members who participated In 2017, ERG launched its Clean Cobalt Initiative • Community development initiatives focused Global demand for cobalt in civic awareness and capacity building at the Metalkol RTR project with a goal to ensure on helping children out of artisanal and continues to grow due to the sessions responsible, assured cobalt production while small-scale mining: In 2017, we also pledged energy and battery demands improving the quality of life for local children more than US$1 million to support a

Finally, ERG continues to support more than for the future of a fast-evolving global and communities. In particular, a core objective three-year partnership with the Good 8,000 students and over 200 teachers through economy. Around half of the for ERG is the elimination of child labour in the Shepherd International Foundation in the our educational initiatives in Kakanda. 1. Preparing our business world’s cobalt supply lies in cobalt supply chain. To achieve this, ERG Kolwezi area near our Metalkol RTR project. the DRC. This means the developed a new strategy in 2017, and activity This partnership aims to help improve the focused on three pillars: living conditions in artisanal communities, development of reliable and • Building an assured chain of custody for especially for women and children. We also ethical sources of the mineral cobalt: In 2017, we initiated the development helped fund an independent study of how requires not only efficient of a secure traceability system for Metalkol the Good Shepherd team has delivered its mining, but also the promotion RTR cobalt from extraction to customer, and Child Protection Program in preparation of social development and a chain of custody aligned with OECD Due for future improvement and rollout more broadly in the area. Finally, we have been human rights protections. Diligence Guidance for Supply Chains to provide assurance to our customers of working with the Good Shepherd Sisters responsible production. to develop a plan for the completion of a new school. 2. Helping our people thrive • Driving advocacy for the achievement of responsible cobalt supply chains through value-chain partnerships: In 2017, with the

support of ERG, the Global Battery Alliance – a World Economic Forum initiative – was launched to catalyse and accelerate action towards a socially responsible, environmentally sustainable and innovative battery value chain to power the Fourth Industrial Revolution. Under this initiative, technology, mining, manufacturing, and wellbeing automotive and energy businesses are

working with UNICEF, the OECD, the African 3. Community development Development Bank and a range of international organisations and NGOs to create a responsible global battery supply chain. ERG is a founding member and co-chair of the Alliance.

We also participated in the Cobalt Industry Risk Assessment Framework (CIRAF), a programme of the Cobalt Institute. This framework will enable member companies, and the cobalt industry more generally, to

conduct enhanced risk management in line 4. Environmental stewardship with industry good practice and global standards focused on the responsible sourcing of minerals.

In 2018, we will publish our Clean Cobalt Initiative Framework and its commitments and will provide an annual report to stakeholders on our progress. broader society Our relationship with 5.

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4.1 Pollution Materiality Environmental prevention

Our activities, whether it is the Introduction stewardship operation of open-pit mines,

Applying responsible operational railway systems, smelting and practices to prevent harm P57 refining facilities, or the generation of power, have the potential to for the future

negatively impact the local 1. Preparing our business environment and contribute to 4.2 Energy and climate change global environmental issues such as climate change 2. Helping our people thrive

This has potential implications for the health The generation of value for our stakeholders is P and quality of life of local people (current and an obvious factor in this regard, but it is only 58 future), broader human development and the one part of the equation. We also need natural environment. Furthermore, these to apply responsible management approaches potential impacts have significant implications that avoid and/or minimise associated negative for the Group, in terms of our compliance with environmental impacts where possible,

local environmental regulations, our social including through the prevention of pollution and wellbeing licence to operate amongst local communities and careful management of our waste.

and the countries we operate in, our liabilities, 3. Community development and our reputation. Key issues in this regard include: • Pollution prevention In this context, we believe it is incumbent upon • Energy and climate change us to produce a net positive impact as a result of our extraction, processing and marketing of • Waste management 4.3 Waste mineral resources (as well as our other management industrial activities).

Relevant Priorities Key UN Sustainable in the 2025 Strategy Development Goals 4. Environmental stewardship Focus area: Portfolio • Energy business development

Focus area: Sustainable development of the regions P60 • The prevention of pollution broader society Our relationship with 5.

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How we manage our Implementation of our commitments environmental impacts All of our operations in Kazakhstan are certified All of our operations in Kazakhstan Our commitment to the ISO 14001 environmental management are certified to ISO 14001 We are committed to preserving and systems standard. In 2017, we initiated a 4.1 Pollution Prevention maintaining healthy, natural environments process to investigate potential improvements through the application of sustainable practices to our environmental risk management process wherever we operate. Our commitment is in Kazakhstan. Areas of focus included the • A total of 43 different community engagement supported by the requirements of our Group co-development of a well-defined risk events, including those focused on issues Introduction procedure by our Environment and Risk Health, Safety and Environment (HSE) Policy such as tree planting, fish stocking, and other Key Strategic Goal in the 2025 Strategy Management teams. The procedure aimed to related matters Statement, which amongst other things requires • The prevention of pollution us to: further enhance our ability to define and • An ongoing programme of tours at our prioritise, using common criteria and facilities for local college students and • Develop, implement and improve HSE measurement parameters, our environmental management systems and programmes that professors. These are aimed at demonstrating Like most mining and heavy industrial risks at both operational and Group level. are consistent with international best practice our environmental management systems and companies, our activities can present a range awareness-raising in general of pollution risks unless they are managed • Ensure the accountability of senior ERG In Africa, we are committed to striving to effectively. These include, for example: managers at all sites for improving HSE continuously improve our environmental • The delivery of training to local authority and • The contamination of groundwater and/or performance through risk assessment performance and to develop, implement and media representatives on environmental surface water as a result of leaching or manage environmental management systems issues • Ensure that all personnel understand their uncontrolled discharges

HSE responsibilities compliant with national and relevant for the future international standards. This includes our In addition, since 2016 we have submitted • Excessive discharges to air • Ensure HSE issues are taken into account in our environmental monitoring results to

ongoing efforts to align our existing SHEC 1. Preparing our business business planning and decision-making Management System (embodied in our SHEC the national authorities for publishing via As such, our international standard Management Manual and associated Kazakhstan’s National Pollutant Release environmental management systems are This is supplemented by ERG Africa’s Safety, procedures) with the ISO 14001 and OHSAS and Transfer Register, a structured heavily focused on the detection, prevention Health, Environment and Communities (SHEC) 18001 management system standards. database that provides transparency and/or minimisation of such emissions. Key Policy, which – amongst other things – commits and facilitates public scrutiny. control measures include: us to: Community engagement • Maintaining water flow and its efficiency • Systematically identify, assess, and manage all We recognise the close link between our In both Kazakhstan and Africa, we also carry • The treatment of processed water to render negative environmental impacts environmental performance and our social out community consultations focused on the it safe for environmental discharge within licence to operate, and thus the need for us to environment in the context of our impact • Strive for continuous improvement in prevailing national regulatory limits environmental performance through the ‘plan, engage with our community stakeholders and assessment activity. In the interim, we continue to apply joint air As a result, we are placing greater short-term implement, check and review’ steps civil society organisations in a transparent and • The treatment of emissions into the quality monitoring in the Pavlodar region of emphasis on the application of alternative constructive manner. For example, in Pavlodar For further information on our environmental atmosphere Kazakhstan around our operations (p56). This performance enhancement technology. This 2. Helping our people thrive

• Minimise pollution, disturbance and/or and social impact assessment activity (e.g. in helps generate assurance that our emissions includes the application of advanced filtration degradation of ecosystems (one of our main operating regions in • Ongoing monitoring of air emissions (e.g. at Kazakhstan), we work closely with a range of relation to significant project changes), please the point of emission) and water in and are strictly in line with national limits. This is in technology to remove particulates from the local community representatives and NGOs on see p43. around our operational sites addition to supplementary, independent emissions of our existing equipment at the

In 2017, we updated our SHEC Policy to commit government monitoring in populated areas sintering workshop of Aluminium of Kazakhstan us to complying with, and where appropriate, environmental management issues. In 2017, • Technical and engineering controls to beyond our impact zone – where community in the Pavlodar region. In 2018, we will also exceeding applicable laws and regulations in the this included: minimise the risk of ground and water members request it. launch the development of a comprehensive, countries in which we operate. This includes • Joint environmental monitoring with the contamination staged plan to minimise air emissions from our working towards full compliance with applicable Centre of Environmental Competence in Kazakhstan’s legislation on a national transition broader operations in Kazakhstan. good international industrial practice guidelines, Pavlodar region Key issues and initiatives to a ’Green Economy’ raised the prospect of such as the IFC Performance Standards and the In Kazakhstan, there is strong stakeholder tightened regulations across a range of issues Beyond this, we will examine capital relevant SHEC components of the OECD interest with respect to our non-carbon and wellbeing linked to companies’ environmental replacement projects as a more strategic Guidelines for Multinational Enterprises. emissions to air and their potential impacts performance, including non-carbon emissions means of improving our underlying emissions

both on human health and on the environment. 3. Community development to air. performance. This is particularly the case in the heavily industrialised Pavlodar region. Although our In 2017, we carried out analysis to understand In addition, in 2018 we will implement emissions are within regulatory limits, there are the gaps between current performance and automated atmospheric monitoring at our concerns about the collective impacts of international best practice. This included the aluminium business in Pavlodar. This will see multiple economic actors in this region – engagement of an external consultancy to the establishment of remote monitoring including ERG – as well as (in winter and spring) inspect our energy facilities, benchmark them stations and sanitary protection zones around domestic users of coal for heating. against relevant European Union emission the entity. The stations will be equipped with standards and provide recommendations to devices that report emissions levels in real time The main sources of our own non-carbon improve performance. The outcomes of this to ERG environmental teams. This will support emissions are from our power generation exercise are currently being analysed and will faster, more responsive management of our activities, and our metallurgical processes. We inform our future strategy in this area. air emissions, whilst delivering accurate data to are actively seeking ways in which to improve

our stakeholders. 4. Environmental stewardship our emissions performance and to achieve performance that goes ‘beyond compliance’. Performance In 2017, all our operations in Kazakhstan – Beyond this, key areas of future focus for our R&D team in Kazakhstan include: This is partly due to our desire to minimise our including those in the Pavlodar region – environmental and health impacts and partly in complied with applicable environmental • Strengthened environmental impact anticipation that national legislation will, in time, emissions permits or were within the limits monitoring through the use of mobile be further tightened in the context of the required by legislation. laboratories equipped with mass national transition to a ‘Green Economy’. spectrometers Planning for the future • Reduced dusting such as the potential

Our ability to improve performance is partially processing of ash dumps at the Aksu broader society constrained by the fixed nature of our heavy Power Plant Our relationship with equipment. 5.

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All of our entities in Kazakhstan are 4.2 Energy and climate change certified to ISO 50001/EN 16001 Introduction This is in recognition of the potential risk that made up of a balanced mix of wind and • Give us valuable insight into how we can Key Strategic Goal in the 2025 Strategy tighter regulation in Kazakhstan could – unless hydropower generation. As planned, this produce the metal in a more energy efficient, • The prevention of pollution adequately managed – have a material impact configuration will help us to: less carbon-intensive way • Energy business development on our operational continuity, capital allocation • Optimise our capital costs • Deliver insight to our customers as to the needs and, ultimately, our profitability. • ‘Balance out’ seasonal generation variations ultimate carbon footprint of the products that

ERG is one of the largest producers of electricity for both generation methods they produce (where such products integrate Energy efficiency aluminium purchased from ERG) in Kazakhstan. Our power stations in Pavlodar, Under our 2016-2020 energy consumption • Effectively integrate our projects into • Potentially generate additional insight into Kostanay and Aktobe regions have a combined improvement programme in Kazakhstan, we Kazakhstan’s power network how we might better manage our carbon capacity of 3,202MW and generate the implemented more than 380 energy efficiency emissions in other parts of the business equivalent of around 19% of the country’s measures during 2016-2017, reducing our Work in 2017 included: electricity, the majority of which is used by our energy consumption by over 3000 terajoules • Wind power: The completion of a study of for the future own operations. 86.5% (2016: 87.0%) is In addition, we conducted a feasibility study and generating cost savings of around US$7 potential sites, and the selection of two – one produced from coal, a key source of focused on the reconfiguration of the cleansing

million. This mainly consisted of smaller-scale near Donskoy GOK (Kazchrome) and one near 1. Preparing our business greenhouse gas (GHG) emissions, extracted system at SSGPO’s Kacharsky Power Plant, and projects, including through energy services EEC’s Vostochny coal mine the introduction of gas (rather than coal) from our Vostochny open-pit mine. As such, we agreements, aimed at reducing our marginal • Hydropower: A study to assess the potential generation into the energy mix. As such, it could make a significant contribution to Kazakhstan’s energy consumption such as: total carbon emissions. We are exploring ways for small hydropower facilities in the East have a material positive impact on our total to reduce this in support of the Government’s • The reuse of thermal power to heat our Kazakhstan and Almaty regions GHG emissions. move towards a greener economy, and in light facilities of the Paris Agreement on Climate Change. • Engine optimisation for our vehicles In Africa, we are continuing to explore Beyond this, key areas of future focus for our opportunities to improve our carbon R&D team include: • The replacement of standard lighting with Energy consumption breakdown (TJ) performance by including our carbon emissions All of our entities in Kazakhstan are certified to energy efficient bulbs • Reduced GHG emissions through efficiency in our environmental and social impact the ISO 50001/EN 16001 energy management enhancements to existing power and Type Energy source 2017 2016 assessments. This means that less carbon system standard. The results of energy audits Renewable energy metallurgical plants, carbon storage and intensive and/or renewable energy sources and Direct Coal 226,405 225,288 carried out at these entities between 2014 and In 2017, we continued to work on our capture, the use of carbon dioxide and waste 2. Helping our people thrive

forms of generation will be considered for new 2016 have informed our 2016-2020 energy renewable energy programme. Kazakhstan’s to produce marketable products, and the Petrol 144 160 projects. consumption improvement programme. 2013 Presidential Decree on a ’Green Economy’ development of new sources of renewable Residual fuel 7,185 6,909 has set the following national targets for the energy Diesel 8,038 8,079 The majority of electricity consumed at our Performance share of energy to be generated using • Fuel diversification, including through operations in the DRC is generated through In 2017, we consumed 264,521 terajoules of Natural gas 19,921 18,338 alternative sources: energy generation using ferrogas and/or hydropower. GHG emissions that are produced energy globally (2016: 261,521 terajoules), with • 3% by 2020 (wind and solar) coke oven gas Kerosene 15 15 are linked to fuel consumption from mining and 86.5% of energy sourced from coal (2016: hauling activities at our mine sites and to our • 10% by 2030 (wind, solar, hydro, nuclear) 87.0%). This moderate increase in energy Sub-total 261,708 258,789 Energy efficiency planning at ERG Africa logistics entity SABOT. • 50% by 2050 (wind, solar, hydro, nuclear) consumption was driven by the extension of a We carried out, as part of a five-year energy Indirect Electricity 2,537 2,377 dewatering system in Africa.

efficiency programme, energy audits at Boss and wellbeing Related regulations require energy producing Heat 207 278 Key issues and initiatives Mining, Frontier Mine and Chambishi Metals. organisations in Kazakhstan – including our GHG emissions associated with our direct and Steam 69 77 Policy context in Kazakhstan This included the gathering of data, analysis energy unit Eurasian Energy Corporation (EEC) indirect energy consumption totalled 24.1 3. Community development Although Kazakhstan is a signatory to the Paris of best practice and the identification of Sub-total 2,813 2,732 – to purchase, at their own cost, renewable million tonnes CO2-equivalent (2016: 24.1 Agreement on Climate Change, the National opportunities for improvement. These audits power as part of their overall energy portfolios. million tonnes CO2-equivalent). All Total 264,521 261,521 Plan (which was published in 2017) and will inform the preparation of relevant business This is typically more expensive than the associated emissions trading scheme do not cases and the implementation of resulting purchase of conventional power. apply any restrictions on our emissions in the Planning for the future action plans in 2018. The ultimate aim of the near-term. Nonetheless, in the context of In 2018, we are planning to carry out a programme is to improve energy efficiency by Greenhouse gas emissions (tonnes CO e) In this context, in 2017 we moved closer to the 2 planned national reductions in GHG emissions comprehensive carbon foot-printing/lifecycle approximately 10% across our African assets development of our own renewable energy of 15% (unconditional)/25% (conditional) by analysis exercise of the aluminium that we with anticipated cost savings of US$2-3 million 2017 2016 generation capabilities, with plans to establish produce. As a commodity, aluminium is energy 2030, we are developing and implementing a year across the five-year period. Direct emissions1 24,014,808 23,768,926 measures to reduce our GHG emissions. installed capacity of 150-180MW (depending intensive to produce. The exercise will: upon capacity factors). This capacity will be Indirect emissions2 55,572 365,746 In addition, we commissioned a hydrocarbon expert to audit the use of diesel by our ERG Total (Direct and Indirect) 24,070,380 24,134,672

Africa operations, with the aim of identifying and 4. Environmental stewardship addressing losses and/or inefficiencies. The audit identified a number of opportunities for

improvement, ranging from the harmonisation of management models across operations to a lack of infrastructure for measuring and monitoring fuel consumption. As such, we plan to do the following in 2018: • Update our immediate fuel supply agreements 1. i.e. GHG emissions that result from the consumption of direct energy for generation of electricity, heat/steam, used in mining, production, and for ERG controlled transportation activities. CO2, CH4 and N2O only. Conversion factors from 2006 IPCC Guidelines

• Develop relevant fuel management policies for National Greenhouse Gas Inventories – Stationary and Mobile Combustion. broader society 2. i.e. GHG emissions that result from the consumption of indirect energy purchased from third parties not owned or controlled by Our relationship with • Upgrade our fuel management infrastructure ERG. Based on operational control of assets. Conversion factors: (1) Purchased electricity – Country-specific WBCSD and WRI: GHG 5. • Rollout related training Protocol – Calculation tool for purchased electricity v4.3 (2008 values); and (2) Purchased heat and steam – Supplier data and default factors from 2006 IPCC Guidelines for National Greenhouse Gas Inventories – Stationary and Mobile Combustion.

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the need for expensive conversion – there are In 2017, we achieved a large increase in the Planning for the future opportunities for recovering, processing and volume/value of waste sold, partly due to Depending on the ultimate benefits and our selling certain categories of waste. This helps improved governance and approaches to waste technological readiness, future waste 4.3 Waste management reduce our own environmental footprint, management (including enhanced analysis of processing efforts will be focused on: conserve natural resources and generate marketing opportunities), as well as stronger • High carbon ferrochrome slags at Aksu additional profits. prices for our waste products. Ferroalloys Plant (Kazchrome) • High carbon ferrochrome aspiration dust at Furthermore, this approach is aligned with the Reprocessing of waste at Kazchrome Introduction shift of the Government of the Republic of Our Aktobe Ferroalloys Plant launched a project Aktobe Ferroalloys Plant (Kazchrome) Kazakhstan towards a more environmentally- to briquette waste and dust from the chrome • Historical tailings of Donskoy GOK friendly economic model. This was set out in the production process. This is with the aim of (Kazchrome) 2013 Presidential Decree on the transition to a returning higher-grade waste back into • Microspheres and ash at EEC ‘Green Economy’ and the national strategy production. Previously, such waste was sold to

‘Kazakhstan-2030’. third parties and filter cake was recycled. A Key areas of future focus for our R&D team newly-established facility will extrude chrome with respect to waste management include: Under our ongoing ‘Turning Waste Into Profit’ briquettes and has a production potential of • The processing of lower-grade dust by- initiative in Kazakhstan, we actively market: 80 kt per year. products through our waste pelletisation • Spent refractory lining of ladles, mixers, project at our Aktobe Ferroalloys Plant, thus Performance electrolysers, induction furnaces completing a ‘closed-loop’ for this type of waste

In 2017, we sold 151,077 tonnes of waste to for the future • Carbon foam third-parties (2016: 58,000 tonnes) worth • The establishment of a new plant to process

• Graphite approximately US$3.3 million. This saved legacy sludges that have accumulated since 1. Preparing our business • Coke dust US$1.1 million in waste disposal costs, reducing the 1950s at our Donskoy chrome mine. our environmental footprint and our We currently extract 80% of the residual • Aluminium slurry environmental liabilities, whilst also generating chromium, and the new plant will aim to revenues for the Group. increase the recovery rate to 90% • Testing of further recycling technologies for ferruginous sand 2. Helping our people thrive

This type of waste is collected, transported, into a single, modern tailings storage facility that Key Strategic Goal in the 2025 Strategy recycled and/or disposed of by suitably qualified will be constructed according to international • The prevention of pollution specialist service providers. All waste is disposed best practice, and will be monitored closely to of in line with national law. We check: ensure its structural integrity. Like any business involved in mining, we • That our contractors have appropriate produce large volumes of waste rock, tailings processing areas, equipment, transport and As the project progresses, it will (under the and sludges as a by-product of our activities. qualified staff to take and process relevant second phase of its development) add 105 kt of waste, as well as relevant environmental copper and 20 kt of cobalt to our production

All such waste is managed in accordance with permits portfolio. Furthermore, it will also progressively and wellbeing address the extensive legacy of environmental our established environmental management • That the recycling or processing method to be degradation and pollution at the site, thus systems and relevant legal requirements. This employed by the contractor or their sub- 3. Community development improving the quality of life of local and includes a focus on physical integrity and the contractors is specified in our contracts prevention of groundwater and surface water downstream communities, as well as local flora and fauna. This means that at the end of mine pollution. In this context, we carry out regular In Africa, waste oil is collected by our supplier or life, we will leave a site that is in far better inspections of our tailings storage facilities used (with government approval) by a local condition than when we commenced operations. (TSFs). This is carried out both by our internal cement factory. teams and external, suitably qualified experts. One complication of this multi-decade legacy For example, TSFs at Comide, Boss Mining and Key issues and initiatives of inadequately managed mining waste (as well Frontier Mine in Africa were audited by an Cleaning up legacy waste in the DRC as the presence of artisanal and small-scale The Metalkol Roan Tailings Reclamation (RTR) external consultancy in late 2016, and follow-up mining communities and other large-scale project near Kolwezi in Southern DRC actions continued to be implemented and mining operations in the area) is the delivery of represents a unique opportunity for us to not monitored closely in 2017. All identified actions assurance to downstream communities that we

only ‘do no harm’, but also to actively address 4. Environmental stewardship have been or are in the process of being are not contributing to water contamination. decades of legacy pollution at the project, which implemented, and updates on progress As such, comprehensive upstream and took place for decades prior to our ownership. are reported to senior management on a downstream monitoring remain key areas

Such legacy issues include: monthly basis. of focus. • The filling of the main local river valley with In addition to such ‘high volume’ waste, our tailings Making a commercial opportunity from waste in Kazakhstan operations also produce a range of operational • The presence of open-pits, waste rock dumps The vast majority of our waste is generated waste such as wood, metal and other materials. and poor tailings facilities that produce dust from our mining (including the removal of overburden), processing and smelting activities. In Kazakhstan, our waste is categorised as Under the project, we will reprocess the existing broader society ‘Green’, ‘Amber’ or ‘Red’ to reflect the relative Whilst much of this waste is not readily Our relationship with tailings in and around the river valley at a 5. recyclable and/or marketable due to a lack of hazard levels they represent. The minority of our low-cost hydro-metallurgical plant. The resulting demand, inadequate value to weight ratios or waste is classified as ‘Red’ (and some ‘Amber’). reprocessed tailings will then be consolidated

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5.1 Value generation Materiality Our relationship with and distribution

Our business does not exist Introduction broader society in isolation. It has the potential

Generating wealth and being a to impact a wide range of responsible corporate citizen P65 stakeholders at both local and national level for the future 1. Preparing our business

This is especially the case given the significant This means we aim to operate in a responsible, role that we play within the Kazakhstan transparent and ethical way, with respect not 5.2 Anti-corruption economy, the Government of the Republic of only to our own actions but also our interactions Kazakhstan’s substantial shareholding in ERG with host governments, business partners, and business ethics and its representation on our Board. contractors, suppliers and broader society.

Similarly, our African assets are in locations that Key issues in this regard include: pose a range of socio-economic challenges, • Value generation and distribution making it incumbent on us to operate with • Anti-corruption and business ethics sensitivity, and in a way that advances rather 2. Helping our people thrive

than undermines the interests of local people • Government relations and policy and broader society.

Our distribution of economic value, through procurement, wages, taxes and other means, P70 collectively marks the most significant benefit we deliver to our host societies. Whilst we take great pride in driving broader value-creation, we also seek to ‘do no harm’ and, where possible, to

positively enhance our operating environments. and wellbeing 3. Community development

Relevant Priorities Key UN Sustainable 5.3 Government in the 2025 Strategy Development Goals relations and policy Focus area: Sustainable development of the regions • The improvement of social wellbeing in our operating regions 4. Environmental stewardship

P72 broader society 5. Our relationship with

62 Eurasian Resources Group S.à r.l. Eurasian Resources Group S.à r.l. 63 Sustainable Development Report 2017 Sustainable Development Report 2017 Section 5: Our relationship with broader society continued

How we manage our interactions with society Corporate Value generation and distribution The sustainable generation of revenue is vital compliance policies 5.1 Value generation and distribution to our business. As such, our entire business These are in addition to our Code of Conduct , model is geared towards maximising the Agents Compliance which is binding on all our employees, value that we can create, both now and in

Anti-bribery and Corruption managers and Board members. It applies a Introduction the long-term. range of obligations with respect to: More directly, our most significant means of Anti-money Laundering Key Strategic Goal in the 2025 Strategy Key issues and initiatives distributing value to the societies in which we Other issues • Compliance with laws, rules and regulations In this context, we are proud of the positive Anti-fraud • The improvement of social wellbeing economic impact we have on our host societies operate are through our payments to: Our policies define our approach to • Anti-bribery and corruption in our operating regions and beyond. In part, these derive from our • Employees and individual contractors (in the interacting with society. These include our Competition Compliance • International trade, export controls, financial products and services, and the impact that they form of wages and benefits) corporate compliance policies, which are and political sanctions have on enabling indirect economic activity and implemented through our associated Conflict of Interest Our ability to continue generating long-term • Service contractors and suppliers, many • Human rights growth. This includes, for example: management systems. These policies reflect CSR Projects and Sponsorship Policy value for our shareholders is supported by of whom are from the countries in which the regulatory environments we operate in • Political and non-political contributions, our delivery of tangible economic benefits • The extraction and value-adding processing we operate and are regularly reviewed against: Data Protection donations and sponsorships by ERG to all our other stakeholders. These include of finite national mineral resources and the • Finance providers, including interest on debt our host governments, which grant us our delivery of high quality, responsibly-sourced • Our risks Gifts and Entertainment and shareholder dividends mining/operating licences and regulate our minerals and metals to industrial customers • Shifts in local laws and regulations Related Parties Contracts activities; our host societies, from whom we around the world • Host governments, including through taxes for the future • Evolving stakeholder expectations and royalties derive our social licence to operate; and our • The generation of power not only for our

International Economic Sanctions 1. Preparing our business employees, without whose skills and energy operations in Kazakhstan, but also for a range • Communities, through our community social Information Classification we could not create value. If we fail to share of domestic and industrial customers investment spending the value we create with these stakeholders Human Rights (amongst others), it will – over time – undermine • The provision of large-scale rail services to businesses in Kazakhstan our entire business model. Our ability to continue generating long-term value for our shareholders is supported by our delivery of tangible economic benefits to all of our other stakeholders 2. Helping our people thrive

and wellbeing 3. Community development 4. Environmental stewardship

broader society 5. Our relationship with

64 Eurasian Resources Group S.à r.l. Eurasian Resources Group S.à r.l. 65 Sustainable Development Report 2017 Sustainable Development Report 2017 Section 5: Our relationship with broader society continued

Supporting sustainable Our presence in Kazakhstan We have a long-standing and proud heritage in Kazakhstan 80 years socio-economic development Rudniy of in-country operations Introduction in Kazakhstan Lisakovsk Pavlodar Aksu Ekibastuz 1/3 Astana

Share in Kazakhstan’s metals Aktobe and mining sector Arkalyk (based on taxes paid) Khromtau Karaganda

ERG has a long heritage Shubarkol in Kazakhstan – playing 40% for the future an instrumental role in Government’s of the Republic of 1. Preparing our business our operating regions, the Kazakhstan shareholding in ERG national mining and metals sector, and the economy Our employees and local communities as a whole. Our operations There is significant overlap and have been an important, interconnectivity between our 62,100 workforce and local communities, long-term source of which drives both our holistic Permanent employees employment and wealth approach to labour relations and our social investment strategy 2. Helping our people thrive generation for local mining towns, many of which have Almaty US$105.5m effectively ‘grown’ around Spent on community our mines and plants. social investment Key project Key project Key project 450,000+ and wellbeing Approximate number of people living

in ERG’s six mining towns 3. Community development

Broader economic impact Development of Smart Mine Kacharsky, Renovation at Aksu Beyond our operating regions, we play an important US$700m DNK mine (second phase) SSGPO Ferroalloys Plant role in supporting national economic development Over US$700m in taxes paid This project will replace output from our The Smart Mine initiative uses digital Renovation activity will increase production volumes, retiring chrome mines and increase technology and data analysis to improve enhance productivity and reduce energy consumption. ferrochrome production over the long-term operational efficiency and reduce costs.

(first ore from DNK second phase is planned Key activities in 2017 4. Environmental stewardship for 2023). Key activities in 2017 • Initiated major rebuild of No.64 smelter furnace as part US$250m • Implementation of automated mining and of the ongoing Workshop No.6 Renovation project Over US$250 million spent on Key activities in 2017 vehicle management system domestic suppliers of goods1 • Progressed second phase of mine Impacts Power station development Impacts • Expected to improve furnace productivity by 50% Mining town • Anticipated cost savings of US$1.4 million and reduce energy consumption by 20% Corporate office Impacts per year • Project also anticipated to reduce our emissions to air • Expected to increase our future • Workshop expected to produce 500 kt of high carbon 19% Operations production volumes of chrome ore ferrochrome a year (once this and other renovations 1. Excluding intercompany procurement

Contribution to national broader society per year are completed in coming years) of goods. energy production2

2. The majority of energy produced is used for our 5. Our relationship with own operations.

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Local content Around 80% of our procurement strategies We agree with the principles behind the OECD Performance In line with relevant local content requirements have been developed with local producers. Base Erosion and Profit Shifting (BEPS) initiative, – and subject to our equal opportunities Where appropriate, we involve local producers which aim to realign taxation with economic Economic value generated and distributed by type policies – we seek to: from disadvantaged groups into our value substance and value creation. We therefore • Employ and develop nationals chain, such as the Society of the Blind in do not engage in aggressive tax reduction 2017 2016 Kazakhstan. strategies. ERG’s effective corporate income tax Type Detail (US$m) (US$m) • Encourage the employment of nationals and rate reflects the statutory corporate income tax use of local content by service contractors Economic value generated Revenue 5,048 3,840

In Africa, our local procurement spending with rates in the countries where we have our Introduction Economic value distributed Operating costs/payments to suppliers 1,791 1,421 • Use companies from our host countries to companies registered in the DRC was around mining and processing operations, and where supply us with goods and services 60% of our overall procurement spend. Of this we pay more than 96% of our Group taxes Employee wages and benefits 754 637 local spend, approximately 60% was made up (2016: more than 95%). Payments to providers of capital 628 562 Our ability to do so is determined by such of long-term contracts. individuals’ and companies’ technical, We are dedicated to providing transparency Payments to government 660 512 operational and business capabilities, as well as In Brazil, almost all our procurement is from about any payments made to governments, Community social investment 111 56 our own commercial considerations. We also local suppliers. and we believe this to be in the best interest support local capacity building where possible. of all our stakeholders. For over a decade, we Total 3,943 3,188 For example, activities include: Tax and transparency have actively engaged with the Extractive Economic value retained 1,104 652 • A new collaboration with the Ministry of As a multinational corporation, ERG has an Industries Transparency Initiative (EITI) Industrial Development and the National obligation and a responsibility to pay taxes and processes in the countries where we have

Chamber of Commerce in Kazakhstan to comply with the laws and rules in force in all our main operations: Kazakhstan, the DRC for the future promote the development of new businesses countries where we do business. and Zambia. Planning for the future to support our production processes. In 1. Preparing our business Our planned and potential growth projects will 2017, we conducted pilot industrial testing ERG is committed to ensuring full compliance Extractive Industries Transparency help support our future generation and with a number of local companies to identify with all governing tax laws and rules. Our tax Initiative (EITI) status of host countries opportunities for future collaboration department works closely with management to distribution of value, including: provide guidance and ensure our operations Actual/potential • The expansion of ferroalloys production in • Continued participation in the Student extraction locations EITI status/assessment are compliant with local laws. Entrepreneurship Ecosystem Programme Kazakhstan through Kazchrome’s DNK mine Brazil Non-participant (p47) second phase development as well as the We make a significant contribution to public DRC Participant renovation of the smelting shop at Aksu • Support for the Skolkovo Start-Up Tour in finances in our host countries, both directly Ferroalloys Plant Almaty, Kazakhstan (p47) (Validation expected to be through the payment of taxes and indirectly finalised by 1 July 2018) • The construction of a new aluminium smelter through payments to suppliers, employees and in Kazakhstan In this context, during 2017 we increased our community social projects. In 2017, we paid Kazakhstan Participant • The Metalkol Roan Tailings Reclamation direct procurement of goods through local more than US$850 million to governments in (Meaningful progress) 2. Helping our people thrive cobalt and copper project in the DRC producers by approximately 40% in taxes and duties (2016: more than US$600 Mali Participant Kazakhstan. Our entities, which are operating million). The increase is mostly due to higher • The extension of life of mine at Frontier in (Meaningful progress) under subsoil use contracts, have purchased income tax payments as a result of increased the DRC over 5% of their goods and services from local taxable profit in Kazakhstan. Mozambique Participant • The development of the Bahia Mineração iron suppliers operating in our mining towns. (Meaningful progress) ore project in Brazil Zambia Participant For further details on these growth projects, (Meaningful progress) please see p24-25. Zimbabwe Non-participant and wellbeing

roportion o ta payents and royalties by location roportion o ta payents by type 3. Community development

Kazahstan 81% Income taxes 46% 80% 41%

15% WHT paid on behalf 3% DRC 15% of suppliers 4%

2% 19% Rest of Africa Mining taxes 2% 17%

Brazil 0% Payroll taxes – borne 9% 1% by employer 10%

Luxembourg 1% Payroll taxes – collected 14%

1% from employees 17% 4. Environmental stewardship

1% 2% Netherlands Customs duties 1% 3%

3% Environmental taxes 3%

2% Property taxes 3% 21 21 2% Other taxes 2% broader society 5. Our relationship with

68 Eurasian Resources Group S.à r.l. Eurasian Resources Group S.à r.l. 69 Sustainable Development Report 2017 Sustainable Development Report 2017 Section 5: Our relationship with broader society continued

Key issues and initiatives However, the SFO has not indicated to ENRC this is not reflective of a worsening in our Business ethics is a particularly material issue the precise scope of their investigation in Africa. business environment or an increase in corrupt for ERG given the nature of our operating ENRC is represented by specialist external activity, but instead reflects the growing 5.2 Anti-corruption and business ethics environments, which pose relatively high levels counsel for the purposes of all matters strength of the ‘speak-up’ culture that we are of latent risk with respect to corruption. In 2017, regarding the SFO process. The investigation encouraging within the business, including we undertook a number of steps to enhance is ongoing. through training. our compliance performance and encourage a

‘speak-up’ culture. This included: Litigation and arbitration Business ethics Introduction ERG is committed to conducting its activities The Group is involved in ongoing litigation In 2017, ERG was not subject to any: in accordance with all applicable laws and and/or arbitration with a number of parties. Policies • The rollout of our long-term Compliance • Material judicial findings or regulatory regulations and high ethical standards of This includes the governments of Zimbabwe, We have policies and procedures addressing specific risks Strategy and our Compliance Charter sanctions (including those linked to its social, business conduct. Furthermore, we are that we review regularly. These include our corporate Mozambique and the DRC in relation to taxes economic and/or labour impacts) opposed to all forms of bribery and corruption, compliance policies, including the following: • The establishment of an annual compliance and royalties. In addition, we are engaged in • Investigations, legal actions or findings in and do not engage in or tolerate their planning system that is aligned with our ongoing litigation/arbitration with a construction relation to anti-competitive behaviour and/or occurrence in any circumstances. It is business objectives and risk assessment contractor in relation to work carried out in internationally applicable sanctions against Group policy to offer, solicit, give or • Anti-bribery and Corruption Policy: • Agents Compliance Policy: processes Kazakhstan, a joint-venture partner in the DRC, accept bribes in any form, for any purpose. this commits us to always acting this requires agents acting on behalf of • The initiation of a process to integrate our a mining contractor in relation to work carried In late 2017 and early 2018, the Government responsibly, honestly and with integrity the Group to apply with applicable laws existing compliance training system into the out in the DRC and construction contractors in of the United States brought into effect a Oversight and to not engaging in or tolerating any and regulations, as well as our policies curriculum of our new ERG Academy relation to works carried out in Zambia. All such Our compliance efforts are overseen by our form of bribery or corruption and the CoC number of new sanctions and designations • The strengthening of our capabilities through cases are pending final decisions/judgments. for the future Board’s Compliance Committee, comprised that impacted individuals and companies the additional recruitment of regional with links to Russia and the DRC. When new of two Board members and an independent Data protection 1. Preparing our business compliance specialists sanctions are introduced, we review these chairperson. The Committee reviews, oversees • Anti-money Laundering Policy: • Human Rights Policy: In May 2018, the European Union’s (EU) General • An enhanced assessment of compliance risks against existing third-party arrangements, and approves our compliance policies, systems this commits us to not knowingly this requires ERG and its employees Data Protection Regulation entered into force, through top-down and entity/facility-specific and if necessary, terminate arrangements and controls, whilst also monitoring the engaging in transactions involving and contractors to abide by human applying to all companies operating within the compliance evaluations, and the integration of to ensure that we are compliant with the effectiveness of our compliance function. money laundering or terrorism financing rights norms EU and the personal data that they process. additional controls into our business sanctions. We have conducted this exercise The committee met six times in 2017 with This applies to personal data processed within processes where risks have been identified in relation to the recent sanctions and all members attending. At an executive level, the EU, and abroad, if such data has been • Competition Compliance Policy: • CSR Projects and Sponsorship Policy: designations introduced by the US. the Risk and Compliance Committee was exported from the EU. Any failure to comply this commits us to not engaging in or this sets out the process, criteria and Furthermore, we introduced new and established in 2016 and commenced with the Regulation may result in a number of tolerating any form of conduct that fails approvals necessary for ERG to commit updated compliance policies with respect Planning for the future operation in 2017. escalatory sanctions, ranging from warnings, to comply with applicable anti-trust and to corporate social responsibility (CSR) to CSR projects and sponsorships, We are planning to build on the solid reprimands and suspensions on data competition laws projects or sponsorships communications and disclosures, and compliance culture we have built in 2017 – with Implementation processing to fines of up to €20 million or 4% updated our Data Protection Policy. the strength and capability of our Compliance Our compliance policies and guidelines of global turnover (whichever is greater). 2. Helping our people thrive are implemented by our Group, regional and team – by further developing our compliance • International Economic Sanctions As noted above, these policies are In 2017, we became a member of the management system in 2018. This includes its local compliance teams, in conjunction with In 2017, we engaged third party specialists Compliance Policy: supplemented by our CoC, which sets out World Economic Forum’s Partnering Against further alignment with international best the broader business. This includes the to review our existing data protection

this commits us to avoiding breaching more detailed obligations and guidance for Corruption Initiative (PACI). This is a cross-sector practice, including the ISO 19600 compliance development and maintenance of a robust arrangements and carry out a gap analysis international economic sanctions our employees, managers and Board agenda-setting platform that works with management system standard. compliance strategy, structure, systems and against the requirements of the Regulation. imposed by relevant governments, members. These policies and the CoC are business leaders, international organisations tools based on risk assessment, internal This has informed a well-defined work plan, supranational or international supplemented by our Counterparty Due and governments to address corruption, screening, monitoring and auditing, as which has been implemented in 2018 to organisations Diligence (CPDD) procedure and supporting transparency and risks in emerging markets. well as international best practice. address any identified gaps. compliance and anti-corruption reviews In addition, we also became a participant in and training. PACI’s ‘The Future of Trust and Integrity’ project, We provide compliance training programmes This will run alongside a programme to raise which aims to identify and develop practical and wellbeing on the Code of Conduct (CoC), including employee awareness and develop their solutions to promote trust and integrity through targeted training for teams that face higher Third parties capabilities with respect to this issue. We are behavioural change, organisational innovation 3. Community development levels of exposure to corruption risks and We conduct due diligence of third parties In 2017, we undertook steps to confident these efforts enable us to comply with and the adoption of technology. associated policies. This includes those teams we engage with, using reputable information enhance our compliance the Regulation. involved in, for example: providers. This allows us to assign risk performance and encourage Legacy issues relating to ENRC ratings in each case and identify appropriate • Procurement processes a ‘speak-up’ culture The Serious Fraud Office (SFO) is an Performance mitigation actions. In 2017, we conducted • High levels of interaction with officials independent UK Government department that Anti-corruption 7,301 third party due diligence reviews1 ERG manages engagements with third parties investigates and prosecutes serious or complex During the year, all of our sites in Africa, (2016: 2,751), with recommendations Furthermore, our employees and business in accordance with internal policies, which fraud and corruption. The SFO forms part of the Brazil and Kazakhstan were assessed for made as to additional information, controls partners are able to submit any reports or include the International Economic Sanctions UK criminal justice system with jurisdiction in corruption-related risks as part of regional and and/or rejection where appropriate. queries they might have regarding ethical and Compliance Policy. In accordance with this the UK. entity-level application of our Group-wide risk compliance risks. This includes through our Policy, we do not engage in or tolerate any management system (p14-15). Our Agents Compliance Policy requires all confidential, anonymous and 24 hour Group form of conduct which fails to comply with Between 2011 and 2013, ENRC was engaged in agents acting on our behalf (including sales As a result, we have applied relevant mitigation

Hotline operated by an independent third-party, the requirements of applicable international an internal investigation into certain matters, 4. Environmental stewardship agents, tax consultants, lawyers, customs and a dedicated email address. ERG is economic sanctions laws and regulations. including allegations around its operations and actions, including the development and Board agents, acquisition intermediaries, etc.) to be committed to protecting whistle-blowers who As such, we review third parties and potential assets in, and transactions involving, Kazakhstan approval of the CSR Projects and Sponsorship subject to documented due diligence and report suspected violations in good faith and to transactions against international sanctions and and Africa (in particular, the DRC). Throughout Policy, budget analysis and reconciliation, comply with our CoC and all compliance maintaining confidentiality where requested. designation lists, and, where appropriate, seek that period, ENRC provided the SFO with a employee training, communications from policies. They are also required to confirm in external legal counsel from qualified firms. considerable volume of information resulting management, a review of hospitality procedures writing on an annual basis that they have not from this investigation. and the development/implementation of engaged in any illegal, corrupt or unethical controls on gifts and similar payments. conduct in the performance of their duties for In late April 2013, the SFO decided to open a ERG, and that they remain in compliance with formal investigation into ENRC. The SFO We also saw an increase in the number of all applicable laws, regulations, rules and reports and queries raised by our employees

1. The number of counterparties that underwent the CPDD confirmed, in May 2015, that it is “not at present broader society Group policies. process increased in 2017, due to the implementation of a actively investigating the Company’s operations and business partners through our Hotline.

risk-based due diligence process as well as the lowering of the 5. Our relationship with in Kazakhstan”. These rose from 78 in 2016 to 327 in 2017 – screening threshold for several types of transactions in an increase of 319%. Our analysis suggests that selected jurisdictions.

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We are already benefiting from Chinese Performance investments in our growth projects. This ERG did not make any contributions (financial or In Kazakhstan, we work with regional includes financing and construction support for in-kind) to political parties in 2017. governments on a range of projects 5.3 Government relations and policy the resumed development of our Metalkol RTR to support socio-economic project in the DRC, a new long-term source of As a 40% shareholder in our Group, ERG pays development environmentally responsible and ethically dividends to the Government of the Republic produced cobalt and copper. of Kazakhstan – directly contributing to the

national budget. In addition, we work on a Introduction The governments of our host countries are In particular, China’s Export-Import Bank and range of projects with regional governments some of our most important stakeholders. the Industrial and Commercial Bank of China in Kazakhstan aimed at supporting socio- have acted as key finance partners for ERG, economic development in our areas of This reflects their potential impact on playing an influential role in our growth. operation. These include: our business in terms of public policy, Furthermore, the BRI is also helping to underpin • ‘Win-win’ community projects negotiated with legislation, regulation and the awarding the marketing of our products in China, our the governments and focused on investment of new licences. Furthermore, given the largest destination market for our raw material in our local communities. These have Government of the Republic of Kazakhstan outputs. These products are a key input into the improved the living conditions of our is a 40% shareholder in ERG, its potential country’s infrastructure development, value- employees (including through the provision of impact on the Group is even more marked. added manufacturing and economic growth. decent, affordable housing), whilst also helping to meet governments’ community All engagements with government are carried As such, we see the BRI, and by extension for the future development objectives (p46-49) out in line with our CoC and, where relevant, our China’s international trade strategy, as playing a • Mandatory socio-economic development accompanying compliance policies. Under our crucial and positive role in the future growth of 1. Preparing our business CoC, ERG will not, directly or indirectly – other the Group. contributions required under our operating than in exceptional circumstances approved The current provisions of the updated Mining • Social development (for example, through our licences. These are paid to the governments in advance by the Board – make political Code could impact the profitability of our extensive social investment in our local directly, which then implements contributions. business as well as those of other operators in communities in Kazakhstan), as well as our corresponding programmes informed by the country. We recognise that the DRC and its donation of US$61 million to the Foundation national and local policy Any political contribution must be authorised in people should benefit from the extraction of of the First President of the Republic of accordance with internal ERG regulations and their national mineral resources. Nonetheless, Kazakhstan – Elbasy in 2017 (p50) applicable law. Whilst we respect and support we also recognise that, in combination with an • Environmental protection, as informed by the the right of employees to participate in political uncertain political situation in the country, the Paris Agreement on Climate Change and activities, this must be conducted purely in a terms of the new Mining Code may discourage Government’s aspirations with respect to a personal capacity and not on behalf of, or in much needed investment in the country, just as ‘Green Economy’ (for example, through our connection with, ERG. copper prices strengthen and demand for

energy efficiency and renewable energy 2. Helping our people thrive

cobalt grows in a substantial and sustained way. initiatives) Likewise, we will not do business with persons or entities where such a business transaction Relationship with the Government This is in addition to our constructive would be in violation of applicable national or of the Republic of Kazakhstan engagement with the Government of the international sanctions laws and rules (p70). Our relationship with the Government of the Republic of Kazakhstan (alongside other Republic of Kazakhstan is deepened by virtue of: stakeholders) in structured regulatory Key issues and initiatives • Its holding of a 40% interest in ERG consultations. For example, in 2017 the Mining Code in the DRC • Its representation on our Board of Managers Government established a multi-stakeholder In March 2018, the Government of the DRC working group to examine changes to • The strategic economic role played by ERG in signed a new Mining Code into law, despite environmental regulation. and wellbeing opposition from mining operators in the Kazakhstan in terms of its contribution to country. Amongst other things, the revised national GDP, the mining and metals sector,

Our participation in this working group, 3. Community development power generation and logistics Mining Code introduces: alongside a number of sector organisations and NGOs, means we are able to provide the • An increase in royalties on base metals from This helps ensure constructive engagement Government with practical insight into the 2% to 3.5% with respect to our business plans and strategy implications of such changes to industry and • The imposition of a royalty on ‘strategic metals’ both within Kazakhstan and outside it. This is contribute to more effective regulation. This of up to 10% particularly relevant given the backdrop of the consultation process has, for example, resulted macro-economic uncertainties in the industry • A 50% tax on ‘super profits’ (i.e. income in the implementation of simplified and the prolonged period of volatility in realised once commodity prices rise 25% environmental permitting procedures. above the anticipated price included in each commodity prices. project’s bankable feasibility study) Belt and Road Initiative Furthermore, we are proud to be in a position • Removal of a provision protecting licence ERG is an active participant in China’s strategic to play a positive role (where it is aligned with holders from changes to the tax and customs Belt and Road Initiative (BRI) – a development our own business objectives) with respect to the 4. Environmental stewardship frameworks they are subject to for 10 years strategy framework proposed by China in 2013 Government’s broader national vision and focused on improving trade links with a wide • A requirement for a 10% local shareholding in strategy. This includes, for example: new mining enterprises range of countries in Eurasia, Africa and Latin • Foreign trade (for example, via our active America, and promoting economic growth. participation in China’s Belt and Road Initiative) This is in a context in which cobalt has This includes major Chinese investment in an increased significantly in price in recent • Economic development (for example, through international infrastructure development years due to growing global interest in our transformation and efficiency initiatives, programme that is one of the most significant electric vehicles and the batteries that power our focus on organisational and technological in recent history. Kazakhstan is a key country them. The DRC is home to around half of innovation, our ongoing investment in in this initiative in terms of geographical employee skills development and focus on location, logistics, natural resources and the world’s reserves of cobalt and accounts broader society for more than 65% of global production. digitisation/Industry 4.0) cross-border trade. Copper has similarly seen a significant 5. Our relationship with increase in price since the start of 2016.

72 Eurasian Resources Group S.à r.l. Eurasian Resources Group S.à r.l. 73 Sustainable Development Report 2017 Sustainable Development Report 2017 Notes Eurasian Resources Group S.à r.l. Sustainable Development Report 2017 T: +352 24 84 24 +352 53 1 T: 84 26 +352 F: 58 99 [email protected]: eurasianresources.lu eurasianresources.lu Eurasian Resources Group S.à r.l. rue9, Sainte Luxembourg Zithe L-2763 Luxembourg