1 APPROVED BY the resolution of the Board of Directors of JSC Atomredmetzoloto (Minutes № 239, May 24th, 2019)
INTEGRATED ANNUAL REPORT JSC ATOMREDMETZOLOTO
2018
THE POWER OF GENERATIONS Table of Contents
Key information 2 4
Address of the Chairman Chapter 2 . Chapter 4 . 4.3.1. Intellectual Capital 4.6.1.2. Internal Social of the Board of Directors Strategy and Markets . . . 24 Capital Management Management ...... 66 Investment Management Alexander Lokshin . . . . . 6 Performance ...... 87 2.1. Strategic Vision Results ...... 46 4.3.2. Innovative Development 4.6.1.3. External Social and Targets ...... 25 Programme ...... 66 Address 4.1. Production Capital . . .47 Investments. Contribution to the of the Director General Development 2.2. Contribution to the 4.1.1. Mineral Raw Materials 4.3.3. Digital Economy Vladimir Verkhovtsev . . . . 8 of Operation Areas . . . . .90 Achievement of ROSATOM’s Base Development . . . . .47 Performance ...... 69 Strategic Goals ...... 26 4.7. Contribution Address of the Nuclear 4.1.2. Production Capital 4.4. Natural Capital . . . . 70 to the National Projects . . 94 Energy and Industry Veteran 2.3. Sustainable Development Management ...... 48 Valery Litvinenko . . . 10. Management ...... 27 4.4.1. Natural Capital 4.1.3. Business Management. Environmental 50 Accomplishments 2.4. Natural Uranium Market Diversification ...... 53 Policy ...... 70 of PJSC PIMCU . . . . . 6-10 Overview and Outlook . . . 32 4.1.3.1. Development 4.4.2. Natural Capital 2018 Key Events . . . .12 . of New Businesses . . . . .53 Management Performance . 70 4.1.3.2. Project “Production 4.4.2.1. Protection of Land 2018 Key Indicators . . 13. of Associated Scandium at Resources and Biodiversity . 70 JSC Dalur” ...... 55 4.4.2.2. Protection of water 4.1.3.3. Project “Processing of resources ...... 71 Pyrite Cinders at PJSC PIMCU” ...... 56 4.4.2.3. Air Protection . . . 72 4.1.3.4. Project “Establishment 4.4.2.4. Waste management .73 of Lithium Carbonate Production 4.4.2.5. Enviromental costs . 74 based on Zavitinsk Appendices 1 3 Deposit Ores” ...... 56 4.4.2.6. Community Relation in 5 Environmental Protection . .75 4.1.3.5. Project “Gold Mining Chapter 1 . Chapter 3 . Organization” ...... 57 4.4.3. Occupational and industrial Chapter 5 . Appendices . . . . . 107 . safety ...... 76 Interaction Information about Governance 4.1.3.6. Project “Organization Appendix 1. JSC Atomredmetzoloto . . 14 with Stakeholders . . . . . 96 Performance ...... 34 of Titanium and Zirconium 4.5. Human Capital . . . . 78 Report Information . . . .107 1.1. About the Company . . 15 3.1. Corporate Concentrate Production at 5.1. Definition 4.5.1. HR Policy Management Appendix 2. Governance System . . . . 35 Tugansk Deposit” . . . . . 57 of Stakeholders ...... 97 1.1.1. General Information . .15 System ...... 78 Table of GRI Disclosures . .109 4.1.3.7. Project “Load-Haul- 5.2. Interaction 1.1.2. Holding Structure . . .16 3.1.1. Corporate Appendix 3. Governance ...... 35 Dump Machines for Underground 4.5.2. HR Policy Management with Stakeholders ...... 98 1.1.3. Mission, Vision Mining Operations” . . . . .58 Performance ...... 78 Conclusion of the Internal and Values ...... 16 3.1.2. Report of the Board of 5.3. Holding Company Control Directorate . . . .111 Directors on the Results of 4.1.3.8. Project “Zirconium” .58 4.5.2.1.Human Capital Transparency as the Main Appendix 4. Conclusion 1.2. Global Reach . . . . . 17 the Company Development by Features ...... 78 Principle of Interaction with 4.1.4. ROSATOM Production on the Results of Independent Priority Business Lines . . . 40 Stakeholders ...... 100 1.3. Role in ROSATOM’s System. Compliance with Product 4.5.2.2. Remuneration Statement of the Report . .112 3.2. Risk Management . . . 40 Production Cycle . . . . . 18 Quality Requirements . . . .58 System ...... 81 5.4. Commitment to Human List of Abbreviations 1.4. Supply Chain . . . . . 18 3.2.1. Risk Management 4.2. Financial Capital . . . .60 4.5.3. Personnel Professional Rights Protection . . . . . 101 System ...... 40 and Terms . . . . . 116. 1.5. Value Chain 4.2.1. Financial Development ...... 82 5.5. Public Reporting System 104 3.2.2. Key Risks and Their and Business Model . . . . 20 Management ...... 60 Contact details . . . .117 . Management Results . . . .41 4.6. Social Capital . . . . .84 5.6. Interaction with Stakeholders 1.5.1. Value Chain . . . . . 20 4.2.2. Financial Management during the Report Drafting . 104 3.3. Internal Control System 4.6.1. Social Investment Performance ...... 61 1.5.2. Business Model . . . .21 and Assets Protection . . . 42 Management ...... 84 5.7. Public Assurance Statement 4.2.3. Investment activities . 63 on Report ...... 105 3.4. Procurement 4.6.1.1. Internal Social Management ...... 45 4.3. Intellectual Capital . . .66 Investments ...... 84
4 JSC Atomredmetzoloto Annual Report 2018 5 GRI 102-14 Chairman of the Board of Directors of JSC Atomredmetzoloto, First Deputy Address of the Chairman of the Board Director General for Operational Management of ROSATOM of Directors Alexander Lokshin Alexander Lokshin
Dear readers! on improving competitiveness Construction of a new uranium project, which is being implemented areas. An important component of Before you are the Annual report and introducing innovations to the Mine No. 6 of PJSC PIMCU in at JSC Dalur, has serious prospects. the long-term success strategy of of JSC Atomredmetzoloto, the technological process. the Trans-Baikal Territory, which ARMZ patented a unique technology ROSATOM and the Mining Division began in the reporting period, is for the associated recovery of this is their significant contribution to Mining Division of the ROSATOM, The focus of the Company is the the most important event for the rare-earth metal in demand on the achievement of the Sustainable setting forth the most important development of its own innovative development of uranium production the world market and has already Development Goals, approved by production, social, financial and technologies. Nowadays, ARMZ in Russia. Commissioning of the received confirmation of interest the United Nations. economic performance in 2018. tests a pilot project “Smart mine will contribute to meeting the from buyers. Also, the company Mine”. For this purpose, the most In conclusion, I would like to add Within the reporting period, the needs of ROSATOM in uranium by plans to use its vast experience and promising site of the Holding that the Holding Company has Mining Division successfully replenishing the existing mineral competences in the field of solid Company in JSC Khiagda was impressive scientific, industrial, completed the tasks set by resource base and ensure profitable mineral production in non-nuclear chosen. In case of successful technological and, of course, ROSATOM, providing the nuclear operation of the enterprise for projects - “Titan”, “Lithium”, etc., testing, the experience of creating human resources necessary for the industry with natural uranium in the many years. which are at different stages of a new-generation digital enterprise development of both core and non- amount of 2.9 thousand tonnes and implementation at the moment. implementing a set of measures to will be applied in other ARMZ I want to draw attention to the nuclear competencies. I wish the ensure stable supplies in the future. uranium mining assets. portfolio of new business projects It should be noted that the Division Company success and effectiveness of the Division. In the reporting is constantly working to improve in this difficult task! The ARMZ team once again year, we managed to get additional its own efficiency, thanks to which demonstrated professional and revenue from the sale of sized coal social and charitable programmes well-coordinated work and focused of PJSC PIMCU. The “Scandium” are implemented in the operation
50 Accomplishments of PJSC PIMCU 1974 1972
1971 22 Rated production capacity 1970 was achieved at the Tulukui 18 JANUARY open-pit mine – 600 thou- 1969 sand tonnes of ore per year. 1968 Mine Construction 16 The first stage of the Tulukui Department (MCD) was open-pit mine was commis- established. 12 A computer centre with sioned, and stripping work 1975 6 JANUARY 9 NOVEMBER punched card equipment began in the second phase 19 JANUARY has been established at A Mine No. 3 was formed at Despite the difficult condi- circuit. The construction of facilities 1 FEBRUARY 20 3 JUNE 19 the PMCW (later Cluster the Tulukui uranium deposit. tions, the Mine No. 1, yield for the ore-processing com- Computer Centre - CCC). A Resolution of the A task for the CHPP design the first tonne of uranium 17 JUNE 6 plex (leach and sulfuric acid Council of Ministers of the was received. 7 APRIL ore. plants) was started. 23 FEBRUARY USSR No. 108-31 dated 13 AUGUST The Central Research Receipt of the first BelAZs. Laboratory (CRL) was organ- First tonne of sulfuric acid 20.02.1968 on the estab- 4 SEPTEMBER The first tonne of urani- 20 Excavator operator A.P. 10 NOVEMBER 10 ized as part of the PMCW. DECEMBER was produced. lishment of the Priargunsky um-molybdenum ore was pro- Mine No. 1 was established. Chertopyatov at the Tulukui Central Laboratory of The launch of the Mining and Chemical Works N.N. Demchenko was ap- duced at the Tulukui deposit. for the industrial develop- quarry extracted the first Instrumentation and Krasnokamensk combined pointed the Head of it. bucket of rock from the Automation (CLIA) is estab- heat and power plant. ment of uranium and urani- 14 AUGUST um-molybdenum deposits ground. lished. 5 DECEMBER 11 Railway shop (RWS) was es- based on uranium deposits of tablished in Krasnokamensk. 1973 the Streltsovsky ore district The formation 8 NOVEMBER 27 11 The 150 km long railway to in Trans-Baikal Territory dis- of the PCMW mountain The first boiler house was the station of Kharanor was 15 SEPTEMBER covered in 1963 was issued rescue service began. commissioned to supply heat commissioned. (considered to be the found- to the facilities under con- At Mine No. 3, underground work at the Novogodnee, ing date of the PMCW). struction in Krasnokamensk. FEBRUARY 13 Yubileynoye and Vesennee 21 2 JANUARY 20 deposits began from the The first passenger train from shaft of the 4P mine, on the the station Urulyungui to The first section of the basis of which Mine No. 4 Krasnokamensk began to run. residential building No. was formed subsequently. 102 in Krasnokamensk was delivered.
6 JSC Atomredmetzoloto Annual Report 2018 7 GRI 102-14 Director General of JSC Atomredmetzoloto Address of the Director General Vladimir Verkhovtsev Vladimir Verkhovtsev
Last year, ARMZ demonstrated which local residents supported the the project and will transmit Russian and foreign companies, The year 2018 was marked by stability throughout the entire deposit development using the DISL best practices to our other whose representatives visited the two important events – the 50th period, having fulfilled the plan method. The infrastructure of the enterprises. The “Smart Mine” enterprise and got acquainted with anniversary of PJSC PIMCU and the for the production of natural new uranium Mine No. 6 is under elements were also introduced the production. We plan to increase 120th anniversary of the birth of uranium by 100%. We produced construction in Krasnokamensk. in JSC Dalur. For the first time the volume of finished products the Head of the Ministry of Medium 2,904 tonnes of natural uranium, in the world, computer-aided Machine-Building, E.P. Slavsky. In 2018, we managed to restrain and obtain the status of a certified environmental modeling was used PJSC PIMCU commemorated its significantly increasing production the growth of the total uranium supplier for these companies. at the uranium mining enterprise, by an environmentally friendly production cost – by the end of 50th anniversary as the leader which makes it possible to predict I consider it necessary to note and safe in situ leach mining. JSC the year, this figure was reduced of domestic uranium production, the environmental impact of the the active participation of ARMZ Khiagda, where this method is used, by 2% relative to the plan. Low which for half a century guaranteed deposit operation with maximum Uranium Holding Co. in the increased uranium production by prices in the uranium market still and timely supplies uranium in accuracy. implementation of priority national 24% compared to the previous put pressure on the economy of Russia. For success in work, high year. our enterprises, but even in these The largest project in the projects. In particular, as part of the production rates, and also in “Education” project, a specialized relation to the 50th anniversary, In order to implement the extremely difficult conditions, the diversification portfolio of the “Dalur-class” was created at the for the first time in the history of Company’s strategy, work was ARMZ team manages to work Holding Company for the sized school of Uksyanskoe village, the nuclear industry, the company continued in different regions of on improving competitiveness. I coal production in the Trans-Baikal funds were allocated to purchase was named after the great Efim the country on preparing new would like to note that the revival Territory demonstrates stable Pavlovich Slavsky, who founded and uranium deposits for operation of the market, which we observed indicators. In 2018, the Urtuysky equipment for the school of Trud i Dear readers! visited the plant annually. “ : engineering surveys were in the second half of 2018, was a coal mine (part of PJSC E.P. Slavsky Znanie village in the Kurgan region. I present to you the 11th good signal for development of the PIMCU) produced 3.028 million As part of the national project integrated report of the Holding completed at the Kolichikan and The power of generations” – the industry as a whole. tonnes of coal. “Health”, public sports simulators Company, in which we tried to Dybryn deposits in the Republic slogan of this report – is intended were installed in all residential speak as openly as possible about of Buryatia, the industrial As part of the implementation of The specialists of JSC Dalur have to reflect the contribution of E.P. districts of Krasnokamensk, and the activities of our company in development of the Khokhlovskoye ROSATOM’s unified digital strategy, developed and patented a unique Slavsky to the development and 2018. deposit in the Kurgan region “Smart Mine” - smart production, technology for the associated as part of the national project formation of the raw industry of began. In 2018, public hearings including the technologies of recovery of scandium, a product “Housing”, young specialists of the nuclear industry. That is why were held on the materials of the the IV industrial revolution - was of a high degree of purification enterprises are provided with the priority topic of the report is environmental impact assessment commissioned on the basis of that is in demand in the domestic comfortable apartments. Grant “The 50th anniversary of PJSC project during pilot works at the JSC Khiagda. In 2019, we plan and world markets. Interest in allocation to social entrepreneurs PIMCU: prospects for strategic Dobrovolnoye deposit, following to confirm the effectiveness of the products was shown by large of Trans-Baikal Territory continues. development”.
1984 1986 1982 1981 1980 37 Start of the Urtuysky open- 1979 35 NOVEMBER 13 pit coal mine development. 34 X-ray radiometric thickening The PMCW Palace of Culture plant (RTP) was commis- 32 Malo-Tulukui urani- “Dauria” was opened. 38 The maximum production of 1976 sioned. 31 NOVEMBER 28. um-molybdenum deposit uranium and uranium-molyb- was discovered within denum ores in the amount of By decree of the Presidium the Streltsovsky ore 29 On the flanks of the ore field, 2,867 thousand tonnes per of the Supreme Soviet of field. PMCW geologists together the USSR, the Priargunsky 1985 year was achieved. with GEC-324 discovered new 24 APRIL 27 FEBRUARY 24 Mining and Chemical Works 33 The construction of uranium-molybdenum depos- was awarded the Order of 39 The Mine Construction The first batch of the Leach By decree of the Presidium a mining enterprise its Argun and Zherlovoye. Lenin, and its Director, S.S. Department reached maxi- Plant (LP) finished products of the Supreme Soviet of Erdes in the Mongolian Pokrovsky was awarded mum productivity: penetra- in the form of uranium oxide the USSR, the Priargunsky People’s Republic has tions – 1,000 m of vertical SEPTEMBER the title Hero of Socialist The maximum possible concentrate was released. Mining and Chem-ical Works began. 36 shafts and 72.5 thousand m3 30 Start of underground mining Labour. PMCW was award- uranium yield – more than 5 was awarded the Order of of capital development. ed simultaneously with the thousand tonnes per year – 25 Completion of construction the Red Banner of Labour for at the Mine No. 4 for the State Design and Research of the PMCW first stage the great successes achieved development of reserves of has been reached. Institute PromNIIProekt facilities. in the development of new the Yubileynoye, Novogodnee for merits in the creation production capacities and and Vesennee deposits. and development in a short Discovery of the Urtuysky the production of special 26 period of large capacities brown coal deposit by products. for the production of special geological exploration crew products. (GEC-324). 28 Start of the Antey deposit development (Vostochny Mine).
8 JSC Atomredmetzoloto Annual Report 2018 9 Nuclear Energy and Industry Veteran, Deputy Chief Engineer Address of the Nuclear Energy of PJSC E.P. Slavsky PIMCU on Technology, Valery Litvinenko and Industry Veteran Valery Litvinenko
Half a century is behind, uranium production company. on coal from the Company’s own plant was started, and also active ensure the overall safety of mining even more – ahead! Stal Sergeevich Pokrovsky was Urtuysky brown coal deposit, and technical re-equipment of the operations and prevent accidents. appointed the first Director (held fuel resources from the mined mining equipment has began. In 2018, the 50th anniversary of Nowadays, PJSC PIMCU knows the office from 1968 to 1997). brown coal. Also, the city of the Priargunsky Industrial Mining After a major accident at the NPP exactly which direction to go. Krasnokamensk was built. and Chemical Union (PJSC E.P. Legends are already made on how Fukushima-1 in Japan, prices In 2018, the implementation of Slavsky PIMCU). Over the years, it the enterprise and simultaneously The PMCW increased its production for natural uranium drastically the largest project of federal has written many glorious pages in the second largest city of Trans- capacities until the early 1990s. decreased. This adversely affected importance – the development of the history of the domestic nuclear Baikal Territory Krasnokamensk The team did not allow the the PMCW position, led to an the Argun and Zherlovoye deposits industry. On account of the team were built and developed. The enterprise to stop, although outflow of specialists. of the Streltsovsky ore field, the numerous production achievements, industrial giant literally grew up in employees sometimes did not construction of the Mine No. 6. The Nowadays, the Company provides famous records. the uninhabited Priargunsky steppe receive salaries for half a year. implementation of the investment about half of the country’s need within just a few years. project will allow to stably provide In 1963, a large uranium ore facility, The crisis has been overcome, for strategic metal. Mining is the nuclear industry with strategic deserving serious attention, was Facility after facility, business unit and since 2000 the enterprise conducted in the traditional mining raw materials, the largest uranium opened in southeastern Trans- after business unit – the union has stabilized. Production worked method at two underground mines. mining company in the country to Baikal Territory. increased its production capacity. steadily, with good technical and More than 5 thousand people work for many years and develop From 1968 to 1993, more than economic indicators. In 2007, work for the end result – obtaining In November 1967, the Minister the second largest city in Trans- 20 business units were included PMCW entered the structure of uranium oxide concentrate. of Medium Machine Building of Baikal Territory Krasnokamensk. in the enterprise: mines, mine ARMZ Uranium Holding Co. of the USSR, E.P. Slavsky issued an As part of the Transformation The main thing is to believe in construction department, leach ROSATOM. order to transform the Western of Information Technologies your own strength and the unity of plant, combined heat and power Mining and Processing Plant Already a year later, the programme of ROSATOM, the team, which, as well as half a plant, repair and mechanical plant, into the Priargunsky Mining and construction of the sulfuric acid underground uranium mines century ago, is the main asset of etc. An energy base has been Chemical Works (PMCW) on the plant was completed, the acid are equipped with systems the company. created: the enterprise was fully basis of the Streltsovsky ore field. warehouse was commissioned, the for underground mining supplied with heat and electric This laid the foundation for a new construction of the second stage communication and staff and energy from the CHPP operating of the X-ray radiometric thickening equipment positioning, which
2018 2012 2011 2009 2007 49 MARCH 13 1997 48 DECEMBER 14 Start of the Mine 1996 46 Ceremonial presenta- The first stage of No. 6 construction. 45 JUNE 17 tion by the Director the Mine No. 8 was 50 In honor of its 50th Launch of a new General of ROSATOM commissioned. 1989 44 The first visit of the anniversary, PJSC sulfuric acid plant S.V. Kiriyenko of Director General PIMCU was named with a capacity of 180 apartment keys to the 1987 43 Tulukui quarry development of ROSATOM after E.P. Slavsky, thousand tonnes per residents of the last of was completed. 15 million Sergey Kiriyenko to the staff of the com- 42 The first issue of the year. the six houses built un- Gornyak newsletter, the 881 thousand tonnes of ura- JSC PIMCU. der the project for the pany was awarded 41 AUGUST 24 modern-day Gornyak nium ore were extracted. resettlement of resi- the distinction of the ROSATOM “E.P. The first bucket of coal was Priargunya newspaper dents of Oktyabrsky 40 The maximum yield of Slavsky”. produced at the Urtuysky village to the city of molybdenum from asso- open-pit mine. Krasnokamensk. ciated ores is more than 600 tonnes per year. The implementation of the ROSATOM 47 Production System has began.
* Used as a commercial designation of PJSC PIMCU, not a company name.
10 JSC Atomredmetzoloto Annual Report 2018 11 GRI 102-7,8, 2018 Key Events 2018 Key indicators GRI 201-1
JULY ˚˚The transition of JSC VNIPIpromtechnologii to the Uranium production The place BIM-technology design and mineral resource base Personnel of ROSATOM among the world’s largest AUGUST uranium-mining Uranium production, tonnes Number of employees, persons ˚˚Celebration of 20 years of work of JSC companies by RUSBURMASH -0.4% +0.7% production volume* 3,005 2,917 2,904 6,957 7,347 7,396 ˚˚PJSC PIMCU was assigned the name of E.P. Slavsky, celebration of the 50th anniversary of PJSC PIMCU, awarding PJSC PIMCU with the “Efim Pavlovich +2 2018 Slavsky” sign Uranium resources (Russian assets), 2 Staff turnover, % SEPTEMBER ktonnes ˚˚The annual regional forum of nuclear industry -0.6% -20% 2017 suppliers ATOMEX REGION-2018 517.1 523.9 520.7 21.7 21.8 17.5 4 JANUARY ˚˚Participation in the V Anniversary Forum NDexpo 2018 and presentation of the innovative Smart Mine Occupational and industrial safety ˚˚Implementation of the project for the construction 2016 2017 2018 of a fiber-optic communication line in the Republic of project 2016 Average monthly wage, RUB Buryatia 4 OCTOBER +1.5% FEBRUARY ˚˚V grant competition aimed at the implementation 59,447 61,992 62,924 of social projects in Krasnokamensk (Trans-Baikal ˚˚Start of topographic and geodetic works for the Territory) Occupational and industrial safety preparation of the construction site of a new uranium Mine No. 6 in PJSC PIMCU NOVEMBER Fatal Injury Frequency Rate (FIFR) Employee engagement rate (division), % MARCH ˚˚The celebration of the 120th anniversary of the Minister of Medium Machine Building of the USSR, +0.08% п. п. 0.00 0.00 0.075 ˚˚Assignment of the status of the priority project of E.P. Slavsky. Publication of the book “E.P. Slavsky. 62 66 68 the Arkhangelsk region to the project of development Uranium mining enterprises of the domestic nuclear of the Pavlovskoye deposit on Novaya Zemlya industry” ˚˚Start of construction and installation work on the 2016 2017 2018 construction of a new uranium Mine No. 6 DECEMBER Lost Time Injury Frequency Rate (LTIFR) Thr place of ˚˚Start of “digital” uranium production by ARMZ ˚˚JSC Khiagda and Bauntovskiy Evenki district of the Environmental operations ROSATOM and Uranium Holding Co. -21.4% Republic of Buryatia signed the Agreement on Social 0.44 0.28 0.22 ARMZ among and Economic Partnership ˚˚Implementation of the Ready Site project at the Environmental protection costs, world’s largest Vershinny deposit by JSC RUSBURMASH million RUB uranium-mining APRIL companies by mineral resource ˚˚JSC Khiagda achieved the status of leader in the Number of Accidents -38.2% base* ROSATOM Production System 520.0** 411.5 255.0 - MAY 4 3 3 2016 2017 2018 2018 ˚˚Start of the preparation of JSC Khiagda for the development of the Kolichikan and Dybryn deposits 2016 2017 2018 2 of the Khiagda ore field Social and economic sphere
JUNE Taxes paid by key enterprises of ARMZ 2017 ˚˚Start of pilot testing of the JSC Khiagda yellowcake Uranium Holding Co. to regional budgets, processing scheme at the leach plant of PJSC PIMCU million RUB*** 2
˚˚JSC The First Ore Mining Company began engineering surveys for the construction of facilities of the port +29% * Taking into account the companies of JSC Uranium One Group. 1,921 2,159 2,784 complex in the water area of the Novaya Zemlya ** Data for 2016 are recalculated taking into account the 2016 archipelago Bezymyannaya Bay information on investments in fixed assets aimed at environmental protection and rational use of natural resources. 2 *** Taking into account payments of income tax as part of the consolidated group of taxpayers (CGT). 2016 2017 2018
12 JSC Atomredmetzoloto Annual Report 2018 13 1.1. About the Company
1.1.1. General Information GRI 102-1 102-2 102-4 Main activities JSC Atomredmetzoloto (ARMZ, ARMZ Uranium Holding The core business of ARMZ is the production of natural Co., Company, Association, Holding Company) heads the uranium. Russian uranium production is of strategic Mining Division of ROSATOM. Our company implements importance. Having our own production of natural a number of uranium and non-uranium projects at uranium in the Russian Federation allows us to solve the different stages of development – from geological following key problems: exploration to intensive commercial operation.
Reliability Long-term safety Ensuring the competitive of supplies of raw material supply cost of uranium products
Our company has unique competences in the field of uranium production: the Holding Company has more than fifty years of experience in the development of deposits in a wide variety of geoclimatic conditions.
Key laws and regulations governing the * Federal Law No. 135-ФЗ dated 26.07.2006 “On Company’s activities Protection of Competition”; In its activities, JSC Atomredmetzoloto is guided by * Federal Law No. 39-ФЗ dated 22.04.1996 “On the the provisions of the Articles of Association, internal Securities Market”; documents, valid legislation, including the following regulatory acts: * Decree of the President of the Russian Federation No. 556 dated 27.04.2007 “On Restructuring of the * Civil Code of the Russian Federation (Part One) No. Nuclear Power Generation Complex of the Russian 51-ФЗ dated 30.11.1994; Federation”; * Federal Law No. 208-ФЗ dated 26.12.1995 “On * Regulation No. 454-П dated 30.12.2014 “On Joint-Stock Companies”; Information Disclosure by Issuers of Securities”, * Federal Law No. 317-ФЗ dated 01.12.2007 “On approved by order of the Bank of Russia. ROSATOM”; Membership in organizations and associations GRI 102-12 * Federal Law No. 13-ФЗ dated 05.02.2007 “On the JSC Atomredmetzoloto is a member of the World Peculiarities of Management and Disposition of Nuclear Association. Property and Shares of Organizations Operating in the Field of the Nuclear Energy Use, and on External charters, principles and other initiatives GRI 102-12 Introducing Amendments to Certain Legislative Acts The activity of the Holding Company takes into account of the Russian Federation”; the principles of the Social Charter of the Russian * Federal Law No. 170-ФЗ dated 21.11.1995 “On the Business. Use of Nuclear Energy”; Chapter 1 * Federal Law No. 223-ФЗ dated 18.07.2011 “On the Procurement of Goods, Works, Services by Certain Types of Legal Entities”; INFORMATION ABOUT
JSC ATOMREDMETZOLOTO 15 GRI 102-5 1.1.2. Holding Structure
Diagram of the JSC Atomredmetzoloto subsidiaries, whose shares (stakes in authorized capital) are owned by JSC Atomredmetzoloto as of December 31, 2018 Our Values Fig.1. Values of ROSATOM Fig. 2. Our goal is zero accident JSC Atomredmetzoloto As the Mining Division of ROSATOM, we share the values of ROSATOM.
OC The Holding Company’s CU P A JSC VNIPIprom- LLC Agrofirma Mantra Resources PTY Ltd. highest priority is safety. In Y T T I PJSC PIMCU E O technologii Itmanovo (Australia) our work, we primarily ensure F N A A S the total safety of people and L
S
96.62% 100% 100% 86.09% the environment. ZERO A
ACCIDENT F E
T Y Vostok Power JSC Dalur JSC Lunnoye LLC Firm Geostar Resources Ltd. (UK) W E 98.89% 50.03% 2.03% 22.96% L L- B EIN G
JSC The First LLC United JSC Uranium JSC Khiagda Ore Mining Company Uranium Plants One Group 100% 99.78% 50% 21.57%
JSC South Yakutia JSC RUSBURMASH JSC UMC Gornoe Development Corporation 100% 100% 25.1% 1.2. Global Reach GRI 102-6
JSC Elkon MMP JSC EGMК-Project Fig. 3. Map of JSC Atomredmetzoloto assets in Russia 100% 0.004% JSC ATOMREDMETZOLOTO JSC FIRST JSC Elkon MMP JSC VNIPIPT ORE-MINING JSC RUSBURMASH COMPANY GRI 102-16 1.1.3. Mission, Vision and Values Novaya Zemlya Our mission
To ensure the competitiveness in long-term supply of raw materials for the development of Russian technologies, Moscow Republic primarily in the nuclear power industry. of Sakha
Our vision Kurgan Region Republic The status of a national manufacturer that guarantees the provision of the raw material needs of the main shareholder - of Butyatia ROSATOM - at a competitive cost and without geopolitical risks. Krasnokamensk Our basic competitive advantages are:
* Resource base of natural and technogenic origin with the possibility of complex processing and cost-effective extraction of valuable components; JSC Dalur JSC Khiagda PJSC PIMCU * high-tech production assets, modern scientific potential and a qualified team with vast experience in the mining industry; * full range of competencies for managing the life cycle of the deposit development and operation, particularly in For more information on the main activities and operation areas, see the annual report of JSC Atomredmetzoloto for 2017, difficult climatic conditions. as well as the “Strategy and Markets” section of this Report.
16 JSC Atomredmetzoloto Annual Report 2018 17 Customer service timely provision of uranium raw material producers with 1.3. Role in ROSATOM’s empty returnable containers. Quality assurance and timely sale of uranium products In the reporting year, JSC Atomredmetzoloto delivered to customers is carried out by: uranium oxide concentrate produced by PJSC PIMCU to Production Cycle * monitoring of its compliance with technical JSC Uranium One Group for further export of Russian conditions (TS); raw materials to the People’s Republic of China and its sale. Fig. 4.JSC Atomredmetzoloto’s Role in the ROSATOM production cycle * observance of raw material shipping schedules by the Holding Company’s production companies; Also, in 2018, the Company formed up a marketing policy for a new product – scandium oxide, produced * optimization of finished product storage and Electric Power by JSC Dalur. The Company conducted a study of the Mining Division Fuel Division Division transportation systems. scandium product consumption market, carried out Geological exploration Conversion Electric power In 2018, JSC Atomredmetzoloto worked on improvement trial deliveries of products to potential customers and Enrichment generation at NPPs Mining of the quality of uranium products supplied to Russian launched the production of higher quality scandium Processing Fuel fabrication NPP service customers. oxide, corresponding to the customers’ needs. A FUEL CYCLE Also, the Company together with the consignee (JSC groundwork was made for transition to long-term and regular deliveries of scandium products to Russian and Life Cycle Back-End SCW) and the freight forwarding companies consistently Mechanical Innovation (LCBE) Division foreign customers from 2019. FRONT-END OF THE NUCLEAR Engineering Division works on optimization of the finished product Switching to a closed nuclear fuel cycle SNF management containerization and transportation, as well as the Equipment design (fuel return into the cycle) Decommissioning Equipment manufacturing FUEL CYCLE RAW management Equipment supply Installation and commissioning
Service and modernization BACK-END OF THE NUCLEAR Engineering Division Design and engineering No cases of changing the supplier The main customers of ARMZ Uranium NPP construction locations were in the reporting year. Holding Co. are the enterprises of POWER ENGINEERING ROSATOM.
GRI 102-11 1.4. Supply Chain Consumer satisfaction assessment GRI 102-9 Fig. 5. ARMZ Uranium Holding Co. Supply Chain Quality management Marketing and Sales Policy Consignee Customers Priorities * In 2018, JSC Atomredmetzoloto reached the * Starting from November 2018, in order to optimize Guaranteed long-term satisfaction of the customers’ planned level of production of improved quality business processes for coordinating and transferring (JSC TVEL and JSC TENEX) needs for natural uranium JSC TVEL uranium product by processing at PJSC PIMCU information between enterprises, the uranium Ensuring efficient organization of sales and sales ammonium polyuranate produced by JSC Khiagda raw material supply in the Holding Company is infrastructure development ARMZ JSC SCW to uranium oxide concentrate. These products, the processed using electronic document flow. quality of which corresponds to the indicators in * It should be noted that as part of organizing Long-term contracting of product output to ensure the technical specifications and the international development and diversification of uranium production JSC TENEX cooperation in the control of the entire supply chain specification ASTM, are in demand both by Russian companies from the nuclear fuel purchaser in PJSC PIMCU, customers and on the international market. together with representatives of energy companies * JSC Atomredmetzoloto is considering the Fortum (Finland) and EDF (France), observational Reliable and uninterrupted supply of uranium raw JSC Atomredmetzoloto supplies products materials to Russian customers is ensured by JSC possibility for further use of the entire volume of audits were successfully conducted . GRI 301-3 Atomredmetzoloto through long-term contracts with in reusable returnable containers, which material produced by JSC Khiagda for the production producers of uranium raw materials and synchronization will be gradually phased out when worn. of higher quality uranium products processed at of schedules for its purchase and sale, as well as due to Decommissioning information not PJSC PIMCU. the availability of carry-over uranium residues at the consolidated. consignee’s (JSC SCW) warehouse. One of the priorities in the work of JSC Atomredmetzoloto is to ensure satisfaction of customers, the supply of uranium raw materials to which According to the results of 2018, is carried out both under long-term (JSC TENEX, JSC all contractual obligations of JSC TVEL) and under one-time (JSC Uranium One Group) Atomredmetzoloto for the product supply to contracts. JSC TENEX, JSC TVEL and JSC Uranium One In this regard, the Holding Company continuously Group were fulfilled in full and strictly on monitors the implementation of agreements with customers, and also responds promptly to their requests time (in accordance with the schedules). and expectations.
18 JSC Atomredmetzoloto Annual Report 2018 19 1.5. Value Chain and Business Model
GRI 102-9 1.5.1. Value Chain 1.5.2. Business Model
High efficiency and presence in all links of the value chain – from products, we are a major employer and taxpayer in the operation areas, A business model is a system that provides value * corporate governance system aimed at the most geological exploration to final product sales to key customers – allow us we invest in social projects. to create value for a wide range of stakeholders. We produce demanded creation in the short, medium and long term and is efficient transformation of these available capitals aimed at achieving strategic goals. (for details see section 2.2. Governance Performance);
Our business model is based on a mission and a * value creation activities based on the available Financial Social long-term strategy. The strategic vision ensures the Adherence to the principles of sustainable development, a We develop responsible financing practices, using our capital transformation (the main activity of the significant contribution to the operation area development, own tangible assets and attracting borrowed funds sustainable development of the Company and the regular and productive dialogue with the stakeholders Holding Company); to finance core activities and make new products for contribute to the creation of a favorable environment for efficient use of capitals in the long term, taking into continuous value creation. business operations account risks and opportunities. * results of value creation activities are the Holding At the same time, we support all the UN sustainable Company main products. development goals and strive to contribute to the The integration of the JSC Atomredmetzoloto business Production Capitals goals most relevant to the specifics of our Company’s Human model into the value chain of ROSATOM, the largest We are constantly improving production Certain resources (reserves) of tangible We are actively investing in the professional activities. facilities in order to transform natural and intangible assets that the company development and training of more than 5,000 vertically integrated company of the global nuclear raw materials into strategically important uses in its activities. Part of the capital of our employees for the effective development products is shared with other stakeholders of business and asset management The business model includes: industry, ensures its sustainable development and * resources available in the internal and external also allows to use the accumulated experience and environment - capitals (for details see Chapter 3. Capital technologies corresponding to the advanced world and Management Performance); Russian levels at all stages of value creation. Intellectual Natural We develop breakthrough, compulsory environmental Our business is based on the rational use of natural protection and industrial safety technologies in order to resources in the field of subsoil use and environmental strengthen our competitiveness impact minimization
We create value through the full cycle of mining operations: from We understand that the value created by ARMZ is not only in obtaining geological exploration, pilot and design work to reclamation and the main final product – a strategically important natural raw material decommissioning of production facilities. - but also in the diversity of economic, social and environmental impacts on the operation areas. On the one hand, the Company seeks to Possessing unique competences and carrying out the whole complex simultaneously increase the positive effect of its activities, and on the of works, we offer our customers products complying with the highest other – to minimize the environmental impact. requirements.
20 JSC Atomredmetzoloto Annual Report 2018 21 Business Model of JSC Atomredmetzoloto
Contribution to the achievement Resources Value Chain Key results Resources Change in capitals of the UN Sustainable Development Goals
Activities Products Production capital Uranium production, 2017...... 2,917 Production capital tonnes 2018...... 2,904 115% Integral indicator Prospecting works for new products Coal production, 2017...... 3.31 million tonnes 2018...... 3.03 Uranium concentrate Obtaining subsoil use rights Human capital Number of employees, 2017...... 7,347 Human capital 3% people 2018...... 7,396 Total cost reduction
Thermal energy Geological Average monthly salary, 2017.... 61,992 exploration RUB 2018.... 62,924 68% Sulphuric acid Employee engagement rate Natural capital Environmental 2017...... 411.5 Natural capital Pre-design protection expenses, engineering million RUB 2018...... 255.0
Uranium mineral 2017...... 523.9 Coal (thermal) resource base (Russian 0.22 Design of production assets), ktonnes 2018...... 520.7 facilities LTIFR
Financial capital Capital expenditures, 2017...... 4.9 Financial capital billion RUB Electric power 2018...... 5.4 R&D, innovations 5% Revenue, 2017...... 17.8 billion RUB Reduction of cash cost for in-situ 2018...... 18.5 leaching uranium mining (JSC Dalur, Including JSC Khiagda) Construction Manufacturing new products...... 1.2 of production facilities of mine machinery
Social capital Social payments 2017...... 212.9 Social capital to employees, million RUB 2018...... 212.7 Operation of production facilities, uranium 99% Drilling, mining and processing geological Charity spending, 2017...... 7.0 Balance of neutral positive exploration, design million RUB and negative publications and engineering 2018...... 7.0 in the mass media services
Intellectual capital Reclamation and Intellectual capital decommissioning Innovation projects 2017...... 209 spending, million RUB 2018...... 51.2 Scandium 106.6% oxide Intangible assets, 2017...... 6.4 Integrated investment activities billion RUB Non-uranium 2018...... 6.5 efficiency indicator businesses
22 JSC Atomredmetzoloto Annual Report 2018 23 2.1. Strategic Vision and Targets
In the reporting year, the Mining Division made a efficiency of uranium extraction from the subsoil and significant contribution to strengthening the Russian reduce the production cost. In 2018, JSC Dalur carried nuclear industry market position and reliable provision out design and exploration work at the Dobrovolnoye of raw materials for its needs. deposit. The largest production site of the division, PJSC PIMCU, fully implemented the Mine No. 6 project infrastructure construction programme for 2018. by the most efficient in situ leach (ISL) method. In 2018 In the reporting year, the Holding Company continued to the share of ISL mining at JSC Dalur and JSC Khiagda work on the development of projects for new business in total uranium production increased from 44% to areas. In 2018, the first commercial deliveries of 55%. Efficiency improvement was continued: in 2018, scandium oxide produced by JSC Dalur were carried it was possible to reduce the unit cash cost of uranium out. The company continued active development of production by DISL (JSC Dalur, JSC Khiagda) by 5%. partnership projects in the mining sector (“Pavlovskoye”, “Lithium”, “Titan”, etc.) and promising business initiatives. Consistent and persistent work in these areas has helped to form the conditions for further sustainable development of the Company’s business. The development of uranium assets was accompanied by further work on the development of new uranium See details in Section 4.1.3. Business Diversification. deposits. In 2018, work was carried out at the JSC Khiagda site to prepare for the Kolichikan and Dybryn The Company’s strategic goals deposit development. As part of the “Digitization” In pursuing its long-term strategy, ARMZ focuses on the direction development, an intelligent mining strategic goals and priorities identified by ROSATOM. management system, Smart Mine, has been launched Their reflection in the activities of our Company at the Istochny deposit site, which will increase the determines its strategic goals.
2.2. Contribution to the Achievement of ROSATOM’s Strategic Goals
Division Contribution to the achievement of ROSATOM’s strategic goals Strategic Goals * Reduction of the unit cost of uranium Guaranteed Reduction of production production satisfaction of 1 cost and lead time ROSATOM’s need for * Launch of the Smart Mine uranium mining Russian uranium management system
* Start of commercial supply of scandium New products for the oxide produced by JSC Dalur Maintaining Russian and international 2 competitive production markets * Implementation of non-uranium high-tech cost of uranium projects for the production of marketable products from ores, solutions and secondary sources Stable development of the division, * Increasing the sales of coal produced by 3 Increasing the share in including by business PJSC PIMCU to China diversification international markets * Overseas revenue growth Chapter 2 STRATEGY AND MARKETS
25 The main areas of development in uranium production in Russia are still as follows: 2.3. Sustainable GRI 102-16 * construction and commissioning in 2023 of the Mine * further increase of the cost-effective and No. 6 at PJSC PIMCU to replace withdrawn volumes environmentally safe uranium production via drillhole of uranium production at existing mines; in-situ leaching (at JSC Khiagda and JSC Dalur). Development Management
Uranium production will continue to be the JSC Atomredmetzoloto key activity. Work on the development of existing enterprises will be complemented by the implementation of new projects in the mining industry and related areas, ensuring the growth of the Company’s We pay considerable attention to approaches to an integrated and balanced solution of business and increasing its social and financial sustainability. sustainable development issues and the role of business in its achievement. Developing the mineral resource base, expanding production capacities, commissioning new production facilities, we have an impact on the social and economic development of the operation areas through financing regional social development projects, creating new jobs and paying taxes Plans for the medium and the long term: to local budgets.
Our Company’s basic priority in the medium term is to ARMZ will continue assessing the prospects and We support all the sustainable development goals identified at the UN summit in 2015 and strive increase the uranium production efficiency, particularly engineering solutions of the Elkon Project (JSC to make a significant contribution to the achievement of the goals that most closely correspond to through the development of new deposits, and the Elkon MMP). Its commissioning is expected in the long the specifics of the ROSATOM ’s Mining Division. active development of new business areas. term (tentatively after 2035) upon the recovery of the uranium market and increase in market prices, providing PJSC PIMCU is constructing a new Mine No. 6 on the the required economic efficiency indicators. basis of Argunskoye and Zherlovoye uranium deposits. Tab. 1. ARMZ Impact on Sustainable Development* The mine commissioning will make it possible to As part of the new business area development, replenish the withdrawn uranium production volumes further expansion of the Company’s product portfolio related to the conservation of existing mines after is envisaged. Service companies of the Division will the active reserve development and will provide a continue to promote services based on existing Product quality control competitive level of uranium cost. competencies in new markets. The mining project implementation on partnership principles and the At the in-situ leaching enterprises, JSC Dalur and JSC organization of strategic raw material processing with Strategic goals Key events 2018 performance Khiagda, a balanced increase in uranium production the involvement of adjacent divisions and external will be continued. JSC Khiagda, having significant partners will allow the division to make a significant potential for the competitive uranium production • strengthening the Russian nuclear industry • product quality compliance confirmation • the planned level of improved quality contribution to the increase in new business revenues market positions uranium raw material production has been development, will continue the development of the for the whole ROSATOM. achieved by processing at PJSC PIMCU JSC Dalur’s objectives are to maintain the current level ammonium polyuranate produced by JSC of uranium production and develop the Dobrovolnoye Khiagda to high quality uranium oxide concentrate; deposit. • successful completion of two observational audits
GRI 413-2 50 years of PJSC PIMCU: new prospects for strategic development Participation in maintaining the sustainability of the global uranium market, national and regional economies, the balance In the reporting year, the 50th anniversary was At present, the prospects for PJSC PIMCU strategic of reasonable stakeholder expectations and ratings celebrated by the Priargunsky Industrial Mining and development are associated with the implementation Chemical Union (PJSC PIMCU) established in 1968 – of a project to build a new mine on the basis of the the largest uranium production company in Russia Argunskoye and Zherlovoye uranium deposits, which Strategic goals Key events 2018 performance and one of the five largest companies in the world account for more than 40% of the mineral resource producing uranium by underground mining. The first base of the enterprise (Mine No. 6 project). The mine tonnes of uranium ore at the enterprise were produced commissioning in 2023 will not only preserve the • maintaining the uranium production • implementation of programmes to • retaining the production cost growth competitiveness improve the uranium production in 1970. In total, for the entire period of work, PJSC enterprise infrastructure and potential, but also ensure efficiency PIMCU produced more than 120 thousand tonnes of its profitable operation for a long period. uranium. For the purpose of comprehensive development of At the present stage of development, due to the PJSC PIMCU site, the development of new business • sustainable development of the • commencement of scandium oxide • revenue for new products above gradual deterioration of the mineral resource base areas will be continued, which will provide an Division, business diversification commercial deliveries; 1.2 billion RUB of existing mines and the prolonged fall in uranium additional contribution to the development of the • implementation of non-uranium prices after the accident at the NPP Fukushima-1, JSC enterprise’s competence in the field of ore processing high-tech projects to increase the PIMCU conducted a socially responsible restructuring using modern technological solutions, as well as create production of marketable products followed by uranium production break-even in 2016 additional jobs in the operation area. from ore solutions and secondary and preservation of the groundwork for further sources development of the enterprise and diversification of its activities.
* Information on the key results of 2018 in the field of sustainable development is given in the main sections of this Report and is indicated by pictograms.
26 JSC Atomredmetzoloto Annual Report 2018 27 Environmental protection Production energy efficiency improvement
Strategic goals Key events 2018 performance Strategic goals Key events 2018 performance
• gradual reduction of pollutant emissions • compliance with ash dust removal efficiency • emission reduction at PJSC PIMCU • reduction of electric energy and power • implementation of an incentive system to • energy savings relative to the 2015 base into the atmosphere indicators at PJSC PIMCU; consumption increase the activity of employees in the year in comparable conditions for 2018 at • improvement of the coal physical and field of energy saving and energy efficiency PJSC PIMCU amounted to more than 10%, chemical properties and maintain the infrastructure; at JSC Dalur – approximately 2%, at JSC • development and maintenance of a culture Khiagda – approximately 5% of energy saving and energy efficiency (daily • replacement of gas consumption with • drastic decrease in emissions at JSC submission of the forecast for day-ahead recycled heat from the Energy Centre Dalur. Total amount of emissions for electric energy consumption, equipment 2018 is 2.809 tonnes, which is 10% of the operation performance and balancing permitted emissions (28.643 tonnes) supervision, replacement of low-efficien- cy light sources with energy-saving ones, reconstruction of the lighting system, supply and exhaust ventilation systems at production sites); • creation of a system for dispatching and accounting of consumed energy resources; • implementation of measures to reduce the Strategic goals Key events 2018 performance power purchasing cost
• consistent reduction of polluted wastewater • development of the new project • reduction of wastewater discharge at PJSC discharges into water bodies “Construction of sewage treatment facilities PIMCU from 11.039 million m³ in 2017 to with a capacity of 40 thousand m³ per day in 10.74 m³ in 2018 Krasnokamensk” and placing it on the newly formed land plot, which is related to the Occupational and industrial safety inexpediency of the reconstruction of the 1st stage of sewage treatment facilities due to the high degree of wear of sewage treat- Strategic goals Key events 2018 performance ment facilities (STF).
• reduction of the number of fatal industrial • implementation at PJSC PIMCU of a safety • three industrial accidents occurred in 2018, accidents culture development project launched in including one fatal 2012. • further work to improve the radiation situa- tion in the mine workings at PJSC PIMCU • absence of accidents investigated in • no accidents investigated in accordance accordance with federal rules and with federal rules and regulations occurred Strategic goals Key events 2018 performance regulations in 2018
• reduction of man-made environmental • arrangement of waste disposal sites at the • all waste generated in 2018 was impact Holding Company enterprises transferred to specialized organizations for neutralization, use or disposal • creation of favorable social and living • implementation of a set of measures • sharp decline in the rate of occupational conditions for employees of the Holding to improve social and living conditions diseases from 0.56 in 2017 to 0.14 in 2018 Company enterprises for employees of the Holding Company enterprises
• compliance with the requirements of • maintenance of the environmental man- • integrated management system ISO 14001 international environmental agement system functioning in accordance development and stable operation provision standards with the requirements of ISO 14001 at the in accordance with the requirements of ISO Staff development Holding Company enterprises 9001:2015 and ISO 14001:2015
Strategic goals Key events 2018 performance
• development of a staff management sys- • staff development and professional devel- • 12 trainers who trained more than 600 tem aimed at improving the efficiency of opment of employees; people are certified; the Holding Company, whose key assets are Strategic goals Key events 2018 performance • formation of a corporate culture through • more than 1,700 people were trained people working for the Company; sports events and the sanitation for on the basis of the PJSC PIMCU training • provision of employees with favorable con- employees and their families; centre; • preservation of biological diversity in the • implementation of a set of measures aimed • total amount of the Holding Company ditions for successful work, professional • support for children’s programmes and • the Holding Company staff turnover production operation areas at preserving biodiversity expenses for environmental protection was growth and creative activity; youth; decreased from 21.8% (2017) to 17.5% 255 million RUB • support for veterans (2018); • the Holding Company employee engagement rate is kept at a consistently high level – 68%
28 JSC Atomredmetzoloto Annual Report 2018 29 • increase of the ARMZ HR-brand attractive- • implementation of a set of measures to pro- • the 2nd divisional professional skills com- ness. Formation of a positive reputation for vide employees with favorable conditions petition ARMZSkills was held under the Business diversification, production capacity expansion the Division as a responsible employer for successful work, professional growth WorldSkills methodology; and creative activity; • ROSATOM’s III industry championship of • maintenance of a competitive salary professional skill – AtomSkills 2018 was Strategic goals Key events 2018 performance held in Yekaterinburg; • WorldSkills Hi-Tech 2018; • the ROSATOM’s Person of the Year 2018 • guaranteed meeting the ROSATOM’s • uranium production in accordance with the • 100% implementation of the production contest was held in Moscow. requirements for Russian uranium and ROSATOM’s needs; programme; reliable provision of raw materials for its • implementation of a set of measures • beginning of the Mine No. 6 construction; needs. for stable future supplies in the volumes • preparation for the start of industrial devel- required by the nuclear industry opment of deposits in the Kurgan region and the Republic of Buryatia
Strategic goals Key events 2018 performance • implementation of business initiatives as • Implementation of diversification projects in • “Scandium” project – a “clean room” was part of horizontal and vertical diversifi- the following mining industry sectors: created – a complex of equipment, which • increase of staff motivation • implementation of programmes aimed at • the programmes for the development of a cation processes, the result of which is made it possible to increase the purity of improving performance indicators managerial personnel reserve “ROSATOM’s - production of energy minerals; the commercially beneficial provision of scandium oxide to 99.9% and higher. Assets”, “ROSATOM’s Capital” and - development of incentive programmes primarily Russian technological develop- - production and processing of ferrous and “ROSATOM’s Talents” were implemented alloying metals; • “Pyrite cinder processing” project - the ini- - formation of staff reserve ment sectors with competitive raw material tial design data were corrected taking into resources - production and processing of non-ferrous account the refinements of the technology metal ores; parameters; a pilot work (PW) programme - production of natural industrial raw mate- for the ferroalloy production has been rials and raw materials for the building developed; process regulations (procedure) Social development in the operation areas material production. for conducting PW have been prepared. • “Lithium” project - the project technical and economic efficiency parameters were obtained, the requirements for the infra- Strategic goals Key events 2018 performance structure necessary for created production facilities were determined, a preliminary implementation plan was developed to cre- • strengthening the ARMZ image as a socially • implementation of corporate social respon- • 100% implementation of actions as part of ate lithium carbonate production facilities responsible company and formation of a sibility projects, charitable initiatives in the the CSR programme implementation; based on the Zavitinsk deposit ores. Etc. positive public opinion about the nuclear Holding Company’s operation areas • expenses for the implementation of industry charitable initiatives amounted to 7 million RUB
Primary documents in the field of sustainable Areas of functional responsibility in the field of development: sustainable development • formation of a positive balance of positive • in 2018, the balance of positive and Due to the implementation of activities in various areas, and negative opinions on nuclear power negative opinions on nuclear energy * Environmental Policy sustainable development issues are regulated separately development programmes by the popula- development programmes by the * Industrial Safety Policy tion of the Russian Federation population of the Russian Federation was for each area and distributed between the core business 57% * Energy Conservation and Energy Efficiency Programme units: * ROSATOM Investment Policy * social responsibility – Deputy Director General for * Code of Business Conduct Strategy and HR Director; * JSC Atomredmetzoloto Public Annual Reporting * environmental impact – Chief Safety Inspector; Standard * Economic responsibility – Deputy Director for Economy * Regulations on the JSC Atomredmetzoloto Charitable and Finances. Strategic goals Key events 2018 performance Activities * The Mining Division Regulations on the Media and • maintenance of social stability in the • support of the operation areas as part of • JSC Khiagda and Bauntovskiy Evenki dis- Holding Company’s operation areas in order concluded cooperation agreements; trict of the Republic of Buryatia signed Public Relations, etc. to improve the people’s life quality • tax payment as part of the CGT the Agreement on Social and Economic Partnership • tax payments increased by almost 30% and amounted to 2,784 million RUB
30 JSC Atomredmetzoloto Annual Report 2018 31 GRI 102-15 Approximately 97% of world uranium In terms of uranium production, Russia 2.4. Natural Uranium Market production is provided by nine key ranks 6th among the leading countries. producing countries. Kazakhstan, Canada (with 5% share in global production). Overview and Outlook and Australia retained their leadership. Natural uranium market in 2018 JSC NAC Kazatomprom has been the largest uranium mining company in the world since 2010, accounting for 22% of the global production in 2018. ROSATOM, whose structure includes enterprises of ARMZ and Uranium One (listed separately), produced over 7.3 ktonnes of uranium in the reporting year, which corresponds to about 14% of world production. Due to the decrease in production by Global Uranium Market Global uranium demand and supply a number of key competitors in 2018, the ROSATOM enterprises ranked 2nd in the world by uranium production.
In 2018, a recovery in prices was observed in the uranium Global uranium demand, including market, its main reason was the reduction of the excess uranium 73 reactor requirements and commercial announced by JSC NAC Kazatomprom: a reduction in production supply. The growth of uranium spot prices occurred against and strategic inventory builing Development of existing and promising projects the background of an increased transaction volume in the spot in 2018 at own and joint ventures in Kazakhstan for the year amounted to 1.6 ktonnes of uranium*. market, which was 50% higher than the 2017 level. At the same ktonnes In the reporting year, the largest uranium producers continued to time, not only energy companies and intermediaries, but also reduce and optimize production, responding to the persistence of The exceptions were the Australian-British company BHP, which financial investors acted as buyers. A significant amount of unfavorable market conditions. A number of mining assets were increased mining at the Olympic Dam mine in Australia in 2018 uranium on the spot market was purchased by uranium producers Global uranium production put on care and maintenance; at some enterprises, production by more than 30%, to 3.2 ktonnes (a low production level in 2017 to replace curtailed production in order to fulfill delivery 53 was significantly reduced. was due to repairs at the mine), and the Chinese CGN, which commitments. multiplied production at the Husab mine in Namibia as part of Particularly, in April 2018, the Australian company Paladin ktonnes the project’s reaching the full capacity. Fig. 6. Uranium spot prices Energy announced that its Langer Heinrich mine in Namibia is in 2016-2018, USD/kg of uranium to be placed on care and maintenance at the end of July the Junior uranium companies continued to optimize their key Canadian company Cameco announced the extension of the projects (in Canada, Australia, the USA and some other countries) 64 Average spot price production suspension at the McArthur River mine in Canada in order to commission them at the uranium market growth 100 - the largest uranium enterprise in the world (productivity - stage. Nevertheless, the pace of work on most projects remained approximately 7 ktonnes of uranium per year) - for an indefinite low due to difficulties in attracting funding and ensuring the sale USD/kg of period which made a significant impact on the uranium market. of products. 80 uranium* An additional reduction in uranium production in 2018 was 69 64 60 57 Global uranium production in 2018 Uranium market outlook 40 In 2018, global uranium production decreased by 9%
Jul Jul Jul and amounted to about 53 ktonnes. Production cuts Jan Jan Jan Apr Apr Apr Oct Oct Oct Global nuclear energy development outlook In the long run, growth in uranium demand is expected to were observed in Kazakhstan, Canada, Niger and several accelerate due to the intensive construction of new NPPs. 2016 2017 2018 At the end of 2018, nuclear power generation ranks fourth in other countries. Since 2016, more than five large mines According to the baseline forecast of the World Nuclear the world in terms of power generation. In the reporting year, have been put on care and maintenance, with the total Association (WNA), by 2035, global reactor requirements may the world nuclear generation for the first time reached the level reach 94 ktonnes. Natural uranium production will grow in line capacity of about 12 ktonnes of uranium per year. at which it was before the accident at the NPP Fukushima-1 Actual spot quotes Sources: initial data according to UxC*; with the demand for it. The volume of supply from secondary calculation of average values - JSC in 2011. Nuclear power remains one of the basic components Atomredmetzoloto. sources in 2035 will be about 6–7 ktonnes of uranium. Annual average value of the global energy balance, which meets all consumer needs in terms of safety, reliability, economic and environmental efficiency.
The most active growth of nuclear energy in the future is 3% 3% Fig. 7. Uranium Production by Countries in 2016–2018., ktonnes predicted in China, India, the Middle East countries (United Arab Sources: JSC Atomredmetzoloto assessment according 7% to press releases and company reports, the US Energy Emirates, Iran, Turkey, Egypt). A new wave of re-launches of 30 Information Administration (U.S. EIA), UxC. nuclear power units is expected in Japan after a new version 25 of the energy strategy was approved in July 2018, confirming 10% 38% 20 2016 2017 2018 that nuclear energy remains one of the key components of the country’s energy mix. Nevertheless, the pace of restarting the 15 NPPs remains slow. In some developed countries, primarily Fig. 9. in Western Europe, a gradual reduction in nuclear generation 10 Electricity generation capacity is expected due to the focusing on the widespread 5 renewable energy development. 16% 0 Kazakhstan Canada Australia Namibia Niger Russia Uzbekistan China USA Global Natural Uranium Market Prospects In the medium term (starting from the first half of the 2020s), Fig. 8. Uranium Production by the Largest Companies in 2016–2018, ktonnes Sources: JSC Atomredmetzoloto assessment according to it is predicted that the situation on the uranium market will press releases and company reports, UxC. Production volume improve and market prices will recover driven by the following is accounted for in proportion to the ownership shares. factors: 16 23% 14 2016 2017 2018 * increased demand for uranium due to commissioning of new NPPs in China, India, the Middle East countries and other 12 Coal Gas 10 regions of the world; 8 Hydro Nuclear 6 * decline in production at existing uranium deposits as the Renewables Oil 4 most profitable part of their mineral resource base is Biomass and other 2 developed and due to insufficient investment; 0 * reduction of supply from secondary sources as their liquid Source: International Energy Agency (IEA) NAC Orano (former CNNC Uranium Cameco ВНР ARMZ Rio Navoi part is used. Kazatomprom AREVA) and CGN One Tinto ММС
* UxC, LLC is an independent international company specializing in analytics, research and forecasting of the nuclear fuel cycle market conditions. Established in 1994. Website: https://www.uxc.com/ * In a 100% share. 32 JSC Atomredmetzoloto Annual Report 2018 33 3.1. Corporate Governance System
3.1.1. Corporate Governance
Corporate governance approach Information on compliance with the Maintaining a high level of corporate governance and Corporate Governance Code principles and transparency is considered as one of the most important recommendations areas in the Company’s strategy implementation, the Separate norms of the Corporate Governance Code, overall goal of which is to maximize the mining business recommended by the letter of the Bank of Russia No. value for shareholders. 06-52/2463 dated 10.04.2014 are applied by JSC The priority tasks in this area are: Atomredmetzoloto in practice, taking into account the specifics of the ROSATOM legal status stipulated by * compliance with international and Russian corporate regulatory legal acts of the Russian Federation, and are governance standards; presented in a number of local regulations. * protection of the rights and interests of minority shareholders; ARMZ Uranium Holding Co. authorized capital and shareholders GRI 102-10 * improvement of the governing body efficiency; As of December 31, 2018: * increased transparency for investment and industry * JSC Atomredmetzoloto authorized capital (including communities, business partners, employees and shares placed during the Company’s additional other stakeholders. issue, the additional issue registration number In its activities, JSC Atomredmetzoloto complies with 1-01-03912-А-007D dated 24.08.2017) amounted to the Russian Federation legislation requirements. The 28,282,192,775 RUB; corporate governance system improvement is carried * The company placed ordinary registered shares in out with due consideration of the best Russian and the amount of 28,282,192,775 pieces with nominal international practices. value of 1.00 RUB each (the issue registration JSC Atomredmetzoloto website (http://www.armz. number 1-01-03912-A; the additional issue ru) contains the Company’s Articles of Association registration number 1-01-03912-А-007D dated and internal documents governing the activities of 24.08.2017); governance bodies, and regularly provides essential * total number of entities registered in the shareholder information and data on events occurring in the ARMZ register is three (ROSATOM, JSC Atomenergoprom, Uranium Holding Co. activities. JSC TVEL).
Fig. 10. Shareholder Structure as of December 31, 2018 Tab. 2. Shareholder Composition Dynamics for 2016-2018, %
Share in the ROSATOM JSC Atomredmetzoloto Shareholder authorized capital, % as of as of as of 31.12.2016 31.12.2017 31.12.2018
100% JSC 82.574 83.220 84.515 Atomenergoprom
JSC 100% Atomenergoprom JSC TVEL 16.137 15.539 14.340 ROSATOM 1.289 1.241 1.145 1.145% 84.515%
JSC 14.340% JSC TVEL Chapter 3 Atomredmetzoloto GOVERNANCE PERFORMANCE
34 JSC Atomredmetzoloto Annual Report 2018 35 GRI 102-18 Management and control system Board of Directors Biographical Information of Members of the Board of Directors JSC Atomredmetzoloto The Board of Directors carries out the general GRI 102-26, 27 Fig.11. Structure of JSC Atomredmetzoloto Corporate management of the Company’s activities, plays a key Alexander Lokshin Governance and Control Bodies role in strategic management. In accordance with the Member of the Board of Directors from 30.06.2014, Chairman from 01.07.2014 Company’s Articles of Association, the quantitative Born in 1957, birthplace - Chita, graduated from the M.I. Kalinin Leningrad Polytechnic Institute. Honored Power Engineer of the Shareholder Meeting composition of the Board of Directors is determined by Russian Federation the General Meeting of Shareholders, but there cannot be less than five people. The Chairman of the Board 06 .2008 – present Deputy Director General, Deputy Director General – Head of the Directorate for the Nuclear Power Centre, First Deputy of Directors and the Director General functions are Director General for Operations Management of the ROSATOM separated. GRI 102-19, Oleg Barabanov 22, 23, 24 http:// Link to the Regulation on the Board of Directors Member of the Board of Directors from 27.06.2017 Board of Directors Auditor armz.ru/aktsioneram-i-investoram/raskrytie-informatsii/ustav- Born in 1971, place of birth - Moscow, graduated from the S. Ordzhonikidze Moscow Geological Prospecting Academy, PhD (Econ.) i-vnutrennie-dokumenty This regulation is valid in the part that does not contradict the Russian Federation legislation and the Company’s Articles of Association. 2011 – 2018 Treasury Director, Director for Development and Restructuring of the ROSATOM Director General The competence of the Board of Directors is determined 2018 – present First Deputy Director General JSC Atomredmetzoloto by the provisions of the Company’s Articles of Association, as well as the Russian Federation regulatory acts. GRI 102-19, Management and control bodies Vladimir Verkhovtsev 20, 21, 22, 23, Member of the Board of Directors from 30.06.2014 24, 25, 26, 27, The corporate governance system as a fundamental Members of the Board of Directors do not own shares 28, 29, 30, element on which the Holding Company’s activities are of JSC Atomredmetzoloto. In the reporting period, Born in 1955, birthplace – Lyal-Mikar, Dzharkurgan district, Surxondaryo region, Uzbek SSR, graduated from the F.E. Dzerzhinsky 31, 32 based is formed on several levels. no transaction on the acquisition or alienation of the Military Academy, Military Academy of the General Staff of the Armed Forces of Russia, PhD (Eng.) Company’s shares by members of the Board of Directors General meeting of shareholders and the Director General was made. 09 .2011 – present JSC Atomredmetzoloto Deputy Director General, Director General GRI 102-26, The JSC Atomredmetzoloto supreme governance 27, 29, 31, 32, Nomination of candidates to the Board of Directors is Vladimir Vysotsky 33, 34 body is the General Meeting of Shareholders (GMS). carried out in accordance with the requirements of Art. 53 Member of the Board of Directors from 10.12.2014 The competence, the procedure for convening and of the Federal Law “On Joint Stock Companies”. holding the GMS is determined by the provisions of the Born in 1954, birthplace – Komarno, Gorodok district, Lviv region, Ukrainian SSR, graduated from the Military Academy of the Company’s Articles of Association, as well as the Russian Independent members on the Board of Directors, General Staff of the Armed Forces of Russia Federation regulatory acts. as understood by the Corporate Governance Code recommended for use by the Bank of Russia, are not 2007 – 2012 Commander-in-Chief of the Russian Navy, Admiral The company shall timely inform the shareholders present in JSC Atomredmetzoloto. of both the GMS date and the vot-ing results at the 2013 – present Deputy Director General, Deputy Director General for Special Projects of JSC Atomredmetzoloto meetings. Relevant messages are posted on the The JSC Atomredmetzoloto’s Board of Directors is Company’s official website. convened as necessary by the Chairman of the Board of Directors on his own initiative, at the request of a member Vladislav Korogodin In 2018, three GMSs were held, at which decisions were of the Board of Directors, Director General, an auditor. made on the Company management, including: Member of the Board of Directors from 07.09.2007 Born in 1969, birthplace – Moscow, graduated from Moscow Institute of Physics and Technology * Formation of the Company’s governance bodies: election of the Company’s sole executive body, election of members for the Company’s Board of 2017 ARMZ Annual Report was. approved 03 .2010 – present Director for Management of NFC and NPP of ROSATOM Directors; by the Board of Directors decision dd. * distribution of the Company’s profits and losses for Director General The main provisions of the policy in the field GRI 102- the 2017 reporting year; 35, 36 May 25, 2018 Management of the Company’s current activities of remuneration and/or reimbursement of * approval of the Company’s Articles of Association is carried out by the sole executive body – Director expenses, information about remuneration and/ new edition; General. or reimbursement of expenses Director General of JSC Atomredmetzoloto Vladimir Remuneration may be paid to members of the Board Verkhovtsev* was first elected to the position by the of Directors for participation in the work of the The Holding Company does not apply special measures 1. Alexander Lokshin - decision of the extraordinary General Meeting of Board of Directors (depending on the financial and to develop additional competencies and increase the Chairman of the Board of Directors Shareholders (Minutes No. 15 dated 27.05.2013). By economic performance of the Company). The amount of knowledge of members of the Board of Directors the decision of the extraordinary General Meeting of remuneration is set by the GMS. regarding economic, environmental and social issues. 2. Oleg Barabanov Shareholders of the Company (Minutes No. 30 dated All members of the Board of Directors receive salary at In 2018, the Board of Directors elected at the annual 3. Vladimir Verkhovtsev 24.05.2018) Vladimir Verkhovtsev re-elected as Director the main job. General Meetings of Shareholders of the Company General for a period of three years. (Minutes of the Annual General Meeting of Shareholders Evaluation of the Company’s achievements as a whole, 4. Vladimir Vysotsky Vladimir Verkhovtsev does not own shares of No. 29 dated 27.06.2017, Minutes of the Annual General as well as managers and individual specialists, is carried JSC Atomredmetzoloto. Meeting of Shareholders No. 31 dated 27.06.2017) 5. Vladislav Korogodin out using the personnel performance management operated with the following members: In accordance with the requirements of Art. 69 of the system based on key performance indicators (KPI). The Federal Law “On Joint Stock Companies”, Art. 15 of the KPI system is a strategic and operational management ARMZ’s Articles of Association, the Director General tool that allows to plan performance at all organizational organizes the implementation of decisions of the levels. General Meeting of Shareholders and the Company’s Board of Directors.
*Biographical information is presented in the Board of Directors section. 36 JSC Atomredmetzoloto Annual Report 2018 37 Management JSC Atomredmetzoloto Committees The company makes decisions on the approval and In the Holding Company, the management of various updating the Holding Company’s strategic goal aspects of financial and economic activities, including formulations, values and mission, as well as tasks the strategic raw material production, radiation and RISK COMMITTEE • a decision point (DP) for the project “Comprehensive improvement of the uranium production efficiency” regarding production, economic, environmental and environmental safety issues, work with personnel and Results of 2018 social impacts. Prior to appropriate decisions, issues the operating area development, is implemented by (Uranium KPI) was passed. are agreed between JSC Atomredmetzoloto and the JSC Atomredmetzoloto functional divisions and 16 meetings in absentia of the JSC Atomredmetzoloto Risk core business units of ROSATOM. The decisions are subsidiaries within their competencies. Committee (hereinafter the Committee) were held, as part of which: A total of 12 issues were considered and 32 investment obligatory for execution by the JSC Atomredmetzoloto decisions were made. management. • the intragroup borrowing rates when issuing and attracting loans by the Mining Division organizations During the year, the Committee membership was (interest risk management) were approved/adjusted; updated. The Committee included representatives of • monthly limits for intragroup crediting of the Mining JSC Atomredmetzoloto, ROSATOM and its subsidiaries JSC Atomredmetzoloto Management as of 31.12.2018 Division organizations (credit risk management) were (PJSC PIMCU, JSC Khiagda, JSC Dalur). Chairman of the approved/adjusted; Committee – Director General of JSC Atomredmetzoloto • the currency risk management strategy and the currency Vladimir Verkhovtsev. and commodity (uranium) risk management programme See details in Section 4.2.3. Investment activities of the Mining Division were approved.
Chairman of the Committee - First Deputy Director Report on the payment of declared (accrued) General - Chief Operating Officer Victor Svyatetskiy. dividends on the Company’s shares See details in section 3.2. Risk Management The JSC Atomredmetzoloto dividend policy is determined by the governance bodies with due consideration of the investments necessary in accordance with the Company’s CHARITY COMMITTEE strategy. Vladimir Victor Svyatetskiy Oleg Barabanov Alexander Results of 2018 For the period from 2015 to 2018 the dividends were not Verkhovtsev Burutin accrued and paid. First Deputy Director First Deputy Two meetings of the Committee were held (in person). Director General General – Chief Operating Director General Deputy Director General Declared and unpaid dividends are absent. Officer for Strategy The Chairman of the Committee is the Deputy Director General for Strategy and Business Development Payment of dividends for 2018 is not planned. M.I. Liborakina (until 10.07.2018); Deputy Director Major transactions and interested-party General for Strategy Alexander Burutin. transactions The priority areas of charitable activities for 2018 are the In 2018, the Company did not complete any major and development and implementation of volunteer projects and interested-party transactions requiring approval by the the support of the Company’s operation areas, as well as: governance bodies in accordance with the Federal Law “On • holding the V Annual Social Project Competition for Urban Joint-Stock Companies”. Locality “Krasnokamensk City”; • a programme to support educational institutions in the Kurgan region; • elimination of the consequences of the current emergency situation in the Trans-Baikal Territory and the provision of operational assistance to the population in the event of a Vladimir Vysotsky Viktor Zakharov Iliya Korolev Vladimir Morgun possible deterioration of the flood situation. Company registrar Deputy Director General Deputy Director General for Deputy Director General Deputy Director General See details in section 4.6.1. Social Capital Management information for Special Projects Economy and Finances for Administration for Safety INVESTMENT COMMITTEE • Registrar full name: Independent Registrar Company R.O.S.T., Joint-Stock Company Abbreviated corporate Results of 2018 name of the company: JSC IRC R.O.S.T.; • Registrar details: PSRN 1027739216757, 11 meetings of the JSC Atomredmetzoloto Investment TIN 7726030449. Committee (hereinafter the Committee) were held, as part • Registrar address and location: Moscow, of which: Stromynka Street, 18, bld. 13. • component investment limits for 2019 were approved; • License number of a professional participant • the division reserve for 2018 was formed; in the securities market for the registered • changes to the data sheets of the projects “Comprehensive securities holders register maintenance: improvement of the uranium production efficiency” by No. 045-13976-000001 PJSC PIMCU, PJSC PIMCU R&D, “Reconstruction of PJSC • Date of the license issue: 03.12.2002. PIMCU hydraulic structures”, “Dalur” were approved • License validity period: unlimited validity period. • key project parameters were updated: “Reconstruction of • Licensing body: Federal Securities Commission PJSC PIMCU hydraulic structures”, “Construction of the of Russia. Stanislav Anikeev Vera Sorokina Vsevolod Galinov Ilya Yaroshevich Urtuysky open-pit mine drainage canal” by PJSC PIMCU HR Director Chief Accountant Chief Inspector Director for Legal Affairs, (Canal), PJSC PIMCU R&D, “Coal”, “Uranium. Maintaining for Safety Control Corporate and Property the production infrastructure of PIMCU, PJSC” (Uranium Management maintenance CAPEX);
38 JSC Atomredmetzoloto Annual Report 2018 39 3.1.2. Report of the Board of Directors on the Results of the Company 3.2.2. Key Risks and Their Management Results Development by Priority Business Lines Tab. 3. Key Risks and Ways to Manage Them in 2018. Critical Risks Are Presented with a Score of 5 or More In 2018, 29 meetings of the Board of * the candidacy of the Company’s auditor for 2018 was approved and the cost of his services was determined; Directors were held, at which decisions were Risk dynamics: Increase Decrease Without Significant Changes * decisions were made on the acquisition of shares of PJSC made on the most important issues of the PIMCU, JSC VNIPIpromtechnologii, JSC RUSBURMASH, JSC The First Mining Company, JSC UMC Gornoe, placed as part Company’s management, particularly: Risk, Its Number of the additional issue of securities; on the Radar and Risk Key Risk Management Results in 2018 * the Company and the Holding Company budget for 2018 was * decisions were made on making contributions to the property the Main Risk Dynamics approved; of LLC Firm Geostar, LLC Agrofirma Itmanovo, in which the Factor Company is a member; * target KPIs were approved; 1. Currency risk The process of managing currency risk and the degree of its influence/distribution on the * decisions on the adoption of changes to the Procurement (adverse change in annual financial performance of the Division is based on the principles of natural hedging. The * the amount of remuneration paid to senior management was Regulations. determined; exchange rates) application of financial hedging tools is performed in accordance with the established currency risk management policy at the level of ROSATOM, while considering the optimal distribution of * recommendations on the distribution of the Company’s risk on an inter-divisional basis. profits and losses were made at the annual GMS; All meetings were held in absentia. In total, the Board of Directors considered 35 issues on the agenda. Result: the optimal ratio of assets and liabilities represented in one currency was ensured in 2018.
GRI 102-15 Dynamics: the influence of currency risk on the financial performance of the Division is 3.2. Risk Management currently reduced. 5. Commodity Risk Adverse changes in the pricing environment and demand in natural uranium markets are (reduction in leveled by the agreed pricing mechanism specified in the Division’s contracts on an inter- 3.2.1. Risk Management System quotations for divisional basis. In the medium term, the influence of commodity risk on the financial uranium) performance remains significant. As part of a unified approach, JSC Atomredmetzoloto together with ROSATOM has formed a risk management system (RMS) integrated into the planning and management processes. The risk management system is based on the cyclical process of identifying, Result: a reduction in the negative influence of pricing environment and the demand in assessing and managing risks that may affect the Company’s result and performance indicators. natural uranium markets on the financial performance was achieved in 2018. In 2018, JSC Atomredmetzoloto successfully confirmed the compliance of its activities with the international standards ISO 9001: Dynamics: the risk dynamics are expected to remain unchanged, while an increase in 2015 and ISO 14001: 2015, including risk management. quotations for uranium is possible in the case of the creation of a favorable environment. 10. Reputational risk This risk is due to the following factors: Fig. 12. Atomredmetzoloto Key Risk “Radar” for 2016-2018 (change in the • Concerns of the residents of Krasnokamensk related to the prospects for the production perception of the activity of PJSC PIMCU in accordance with the planned completion of mining at developed 1. Currency Risk reliability and deposits, attractiveness of the • Civil unrest against the development of the Dobrovolnoye uranium deposit in the Kurgan 16. Compliance Risks 2. Tax Risk Division by interested parties) region. The following activities were performed to manage such risk: 15. New Investment 3. Interest Risk Project Risk • Provision of interested parties (in order to change the public opinion) with the information about the plans and dates for the construction of new mines and the continuation of the activities of the mass media, including through the press service of the Government of the Trans-Baikal Territory, with the involvement of opinion leaders and the Governor of the 14. Investment Project Region, Risk (Uranium) 4. Loan Risk • Provision of the employees of PJSC PIMCU and the residents of Krasnokamensk with the information about the schedule of works on the construction of the mine No. 6 on the relevant days and by using social networks, • Meetings forming a positive public attitude towards the development of nuclear energy by 13. Social and Political 5. Commodity Risk increasing the information transparency through organizing the activities of information Risk in Operation centers and providing the information about the activities of mining companies in the Regions (Uranium) local mass media with the involvement of opinion leaders, including the results of the environmental monitoring, on a monthly basis, • Public hearings on the issue of mining with the participation of experts and scientists. 12. Occupational 6. Production Asset Result: Uranium projects are being supported by the state authorities at both the regional Safety Risk Loss Risk and federal levels. The relevant support for various development projects related to the development of new uranium deposits is ensured by the population of uranium cities and districts. 13. Social and Performance of the activities concerning the implementation of the Development of the 11.Staff Risk 7. Industrial Safety Risk political risk in the Argunskoye and Zherlovoye Deposits project. The construction of the mine No. 6 located in the regions of presence Trans-Baikal Territory with the support of regional and federal authorities allowed to reduce (heightening of all concerns of local residents and maintain social calmness in the region. social tensions in Krasnokamensk) Result: the preservation of a calm atmosphere in the city, as well as the absence of strikes and 10. Reputation Risk 8. Environmental Risk unrests within the enterprise. 9. Change of Law Risk Dynamics: the risk is decreased due to the awareness of interested parties about the prospects for the development of uranium production.
2016 2017 2018
40 JSC Atomredmetzoloto Annual Report 2018 41 14. Investment In 2018, the risk management system was developed for the implementation of investment Project Risk - projects under the stage of construction, which includes the following activities: Resource use efficiency during control actions Uranium (risk of • Conclusion of construction contracts with the contractors having a strong engineering failure to achieve potential, high quality services and successful experience in implementing similar projects, The essence of this key performance indicator is to determine the ICD performance, based on the percentage project goals) • Introduction of banking support procedures, of efficient control measures and checks with a “zero” result. Checks with a “0” result are checks without digitized violations and/or recommendations issued (drawn up in the Director General’s instructions). • Choice of large and reliable suppliers of equipment and materials, To obtain data on the resource efficiency level, it is necessary to divide the number of checks without a result • Strict and constant control over the quality of construction and installation works at all stages, (“zero”) by the total number of checks in the plan and multiply by 100%. • Risk insurance. Result: the efficiency of the Division’s portfolio of uranium mining projects is at a consistently positive level. Results of 2018: 15. Risk of new Implementation of projects concerning new non-uranium businesses is associated with greater investment projects uncertainty, therefore, when developing such projects, special attention shall be paid to the * all the planned measures were taken to verify the financial and economic activities of the subsidiaries and the most (risk of failure to analysis of risks that can adjust the course of their implementation. risky processes; achieve goals under The main risks were: the absence of confirmed sales market, reduction in the market price and * two RPS projects to improve the control measure efficiency were developed and implemented; the projects) the occurrence of unforeseen costs related to technological solutions. Such factors lead to the postponement of projects. Tab. 4. Control measure dynamics in 2016–2018 Result: the key risks are monitored (assessment of their likelihood and exposure) and the relevant adjustments to the measures related to their management are taken during the promotion of the projects. The data of risk analysis are taken into account when choosing Item 2016 2017 2018 alternative strategies and making adjustments for successful implementation of the projects. Number of control measures, including by type, pcs. 34 50 85 Dynamics: no changes are expected. - control and auditing activities 6 6 13 - expert and analytical event 24 36 53 - internal audit 4 8 19 GRI 102-11 In accordance with the JSC Atomredmetzoloto Risk Management Policy, during the project Number of detected deviations, pcs. 73 103 139 initiation and implementation, a project risk analysis, an assessment of the project impact Number of corrective actions taken 111 90 145 and potential consequences with the qualified expertise assistance are carried out. When Number of employees brought to disciplinary responsibility following the control 30 28 49 significant risks are identified, measures are being developed to reduce them, up to a decision measures to abandon the project. During the state expert review, design and survey documentation for all projects implemented by the Company is subject to mandatory assessment for compliance with current legislation.
GRI 102-17, Safety management system 205-1, 2
In the Mining Division, a set of measures is being implemented to protect assets, prevent and counter offenses of a corruption nature. To achieve these goals, an internal control system has been established, the procurement procedures have been modernized, counterparties are being checked and other safety measures are being taken.
3.3. Internal Control System Results of 2018:
* Preventive measures were taken to prevent corruption * Service checks were initiated on information about and Assets Protection offenses and loss of assets. In this regard, measures possible facts of asset loss, including those received were taken to identify personal interest and conflict via ROSATOM hotline. In some cases, the results of of interest, including analytical processing and such inspections were transmitted to law enforcement For more information on the ICD, its tasks and principles Internal control system study of data on income and property obligations, agencies for their legal assessment. of activity, see the JSC Atomredmetzoloto Annual Report on procurement and contractual activities, on * Work to improve the local regulatory framework in The Company internal control and audit function is for 2015. personnel procedures, on work with receivables and the field of corruption prevention is organized. New payables. During the reporting year, the risks for all implemented by the Internal Control Directorate (ICD), Key performance indicators of ICD activities are: and updated existing local regulations aimed at the which reports directly to the Director General. The of the Company’s divisions were assessed, also the * the absence of actual incidents or significant implementation of measures to prevent corruption are Directorate carries out its activities in accordance with business processes themselves (procurement and remarks on the results of the organization’s process developed. the International Professional Standards for internal contractual activities, participation in the flagship inspection by external control bodies verified earlier audit and is guided by the following principles: project implementation (including the federal budget * The “Joint-Stock Company Atomredmetzoloto Anti- by the Company Internal Control Directorate. disbursement), charity, the sale of non-core assets, etc.) Corruption Plan for 2018 - 2020” has been developed (in * independence/objectivity; * resource use efficiency during control actions were assessed. order to increase the corruption prevention efficiency); * competence; * An update of the JSC Atomredmetzoloto local * professionalism. There are no comments from state and regulatory framework in terms of the restricted access other external control bodies following the information protection was carried out (taking into For the ICD activity implementation, a Control Measure process audits in 2018. The resource use account the requirements of the Uniform Policy for Plan for the year is formed, including information on the Over 100 million RUB — total economic benefit Protection of Commercial and Official Secrets in the inspection periods and the number of days provided for efficiency according to the 2018 results has for 2018 due to the asset protection activities of Nuclear Industry). each control measure. the value significantly above the rated one. the divisions
42 JSC Atomredmetzoloto Annual Report 2018 43 The coordinates of a unified “hotline” for prevention of corruption and theft in the nuclear industry: 3.4. Procurement Management ROSATOM e-mail: [email protected] tel.: +7 (800) 100-07-07 (multichannel, round the clock, free of charge from anywhere in the country) Details on the ROSATOM website www.rosatom.ru JSC Atomredmetzoloto Tel.: +7 (495) 508-88-08, Ext. 512 Details are on the JSC Atomredmetzoloto website www.armz.ru The Company adheres to the principles of openness procurement activities has increased: publication of the and transparency in procurement management. 99.9% annual procurement plan, procurement procedures, data of competitive procurement procedures are carried on the concluded contracts and their execution on the Anti-corruption regulatory legal acts and local effect extends to all the Holding Company subsidiaries. out on electronic platforms of LLC Fabrikant, JSC official website. documents of JSC Atomredmetzoloto are presented 100% of employees, including governing bodies United Electronic Trading Platform and JSC Centre for on the Company’s corporate website http://www.armz. are informed about the anti-corruption policies and Every year since 2013, in order to develop a Economic Development, which allows saving labour and ru/o-kompanii/programma-po-borbe-s-khishcheniyami; their methods. competitive environment, attract more suppliers, financial resources. ensure informational openness and transparency of In 2013, JSC Atomredmetzoloto fell under the effect procurement activities, ARMZ Uranium Holding Co., of the Federal Law No. 223-ФЗ dated 18.07.2011 “On together with the ANO ROSATOM Corporate Academy, Ensuring physical protection of nuclear facilities the procurement of goods, works, services by certain conduct regional ATOMEX REGION forums in the types of legal entities”. Therefore, the openness of operation areas. Under the heightened risks of a radical and extremist Cases of unauthorized entry of unauthorized nature, a special role is given to ensuring the safety persons into the protected areas of the and anti-terrorist sustainability of the ARMZ Uranium Holding Company nuclear facilities in 2018 Holding Co. enterprises. The integrated “Safety” Tab. 5. Holding Company Procurement Structure strategic task solution allowed to increase the are absent. professional training of security service personnel and Indicator 2016 2017 2018 nuclear facility departmental security subdivisions, Following the measures taken, the physical protection The share of purchases made by organizing public open competitive procedures 99 99 99 practice the elements of interaction with law state inspections, conducted in 2018 by state, law under the Uniform Industry Procurement Standard, % enforcement agencies, update and modernize technical enforcement and departmental structures were Amount of JSC Atomredmetzoloto purchases, million RUB 317 519 351 means of physical protection at a number of production successfully completed. sites. Total amount of the Holding Company purchases, million RUB 17,242 12,670 20,599 JSC Atomredmetzoloto savings, million RUB 5 6 9.5 Total Holding Company savings as a result of procurement procedures on an open 770 896 1769 Information safety competitive basis, million RUB
Planned work is carried out to improve the Holding information resources. Approximately 20 million RUB Company information safety, prevent and neutralize were invested in the project. The priority corporate Increase in the purchase volume in ARMZ Uranium Holding Co., in accordance with the possible cyber attacks on the Holding Company project was implemented on time. GRI 204-01 comparison to 2017 was due to the start of ROSATOM procurement policy does not have the right to set preferences for suppliers on a territorial basis. Mine No. 6 construction at PJSC PIMCU. Local suppliers participate in competitive procedures on a general basis, special approaches in work with local suppliers do not apply. The company does not keep Tab. 6. Procurement Structure by Cost Criterion, % special records of such supplier costs; the procurement budget for use in significant operation areas and for Purchase amount Purchase share local suppliers has not been allocated. Up to 1 million RUB 1.6 Up to 10 million RUB 10.6 10-50 million RUB 19.8 50-100 million RUB 15.6 Above 100 million RUB 52.4 Results of 2018:
* 1,265 competitive procurement procedures were conducted for the needs of ARMZ Uranium Holding The largest groups in terms of product/service Co. enterprises; purchases are: * total competitive procurement procedures were * products and services purchased from nuclear conducted to the amount of 14.2 billion RUB; enterprises; * the economic benefit (the difference between the * power supply. initial purchase price and the winner’s bid cost) based The main groups of products/services among on the competitive procurement procedure results competitive procedures: was 1.77 billion rubles; * materials and equipment; * in September of the reporting period, together with the ANO ROSATOM Corporate Academy, an annual * construction and installation works; regional forum ATOMEX REGION-2018 was organized * equipment repair and maintenance. in Irkutsk.
44 JSC Atomredmetzoloto Annual Report 2018 45 4.1. Production Capital
4.1.1. Mineral Raw Materials Base Development
The JSC Atomredmetzoloto mineral resource base (MRB) of uranium is 520.7 ktonnes. In terms of its volume, the Holding Company ranks second among the largest uranium production companies in the world.
Tab. 7. ARMZ Uranium Holding Co. Russian Enterprise Reserves and Resources as of 31.12.2018, ktonnes*
Enterprise Reserves R1 Resources Total MRB PJSC PIMCU 99.2 - 99.2 JSC “Dalur” 14.2 8.1 22.2 JSC Khiagda 36.1 1.4 37.4 JSC Elkon MMP 357.1 - 357.1 JSC UMC Gornoe 4.6 - 4.6 Total: 511 .2 9 .5 520 .7
*Due to the indicator rounding, the summary data in the lines and columns may not coincide
Geological exploration works in Russia
Tab. 8. Volumes of Exploration Drilling and Financing in 2018
Drilling volume, Work Types thousand linear Financing Volume, million RUB metres The first stage of geoenvironmental research as part - 5.7 of geological exploration at the Dobrovolnoye deposit (JSC Dalur) Geological exploration work on the assessment of gold 6.3 92.7 mineralization in the upper oxidized part of the Severnoe gold-uranium deposit (JSC Elkon MMP) Total: 6 3. 98 .4
In 2018, geological exploration work was carried out at the Dobrovolnoye deposit (JSC Dalur, Kurgan region) and the Severnoe deposit (JSC Elkon MMP, Republic of Sakha (Yakutia)). The total investment in geological exploration work amounted to 98.4 million RUB.
2018 key events and performance:
* the area of license for the use of Khiagda deposit * the first stage of geoenvironmental research as part subsoil has been increased, allowing JSC Khiagda to of geological exploration at the Dobrovolnoye deposit engage in commercial development of the X-1 and was completed; X1.1 deposit reserves and the X1a and X-2 deposit * geological exploration work on the assessment of resources; gold mineralization in the upper oxidized part of the * a positive expert opinion was received from FSI Severnoe gold-uranium deposit were started. Rosgeolexpertiza on the Dobrovolnoye deposit geological exploration project; Chapter 4 CAPITAL MANAGEMENT
46 JSC Atomredmetzoloto Annual Report 2018 RESULTS 47 4.1.2. Production Capital Management MINE NO. 6 PROJECT Results of 2018 and plans for the coming years: The bottom line * federal budget subsidy for the mine infrastructure facility PJSC PIMCU Uranium production construction was received and fully used; is the construction of the uranium production Mine No. 6 at PJSC PIMCU (Krasnokamensk, Trans-Baikal Territory) * the access road construction was completed; Tab. 9. Uranium Production and Reserves in 2016–2018 with a total capacity of 850 ktonnes of ore. The project is * the main stage of the main step-down substation site included in the list of activities for the social and economic construction was completed; Volume of production, tonnes development of the Trans-Baikal Territory to be implemented in 2018-2025 as a priority, approved by the decree of the * the mine water treatment plant site (10 buildings and 2016 — 1,873 | 2017 — 1,631 | 2018 — 1,456 Government of the Russian Federation No. 849-р dated structures, a pipe rack) construction has began. 03.05.2018. Uranium reserves, ktonnes The full project development with reaching the rated capacity Goals, objectives is planned for 2026. 2016 — 102 5. | 2017 — 100 .8 | 2018 — 99 .2 * ensuring strategic independence of Russia, fulfillment of Importance of project implementation to the state order, ensuring national security; improve the people life quality and/or preserve * meeting the ROSATOM needs for natural uranium by the environment Plan Implementation in 2018 replenishing the existing uranium mineral resource base The project implementation will fully compensate for the after withdrawal; PJSC PIMCU resource base depletion, support domestic * maintaining the PJSC PIMCU industrial infrastructure, the natural uranium production, ensuring the ROSATOM need Plans announced in the 2017 report Results technical personnel competences, the Krasnokamensk in the long term, as well as save jobs and production social stability. infrastructure in the single-industry town of Krasnokamensk, Trans-Baikal Territory. Production of 1,450 tonnes of uranium. The 2018 uranium production programme has been completed in full, 1,456 tonnes of uranium have been produced. Celebration of the PJSC PIMCU 50th anniversary. Completed. The company celebrated its 50th anniversary. Commissioning of the Company’s own granular explosive Completed. PJSC PIMCU fully switched to using its own JSC Dalur Uranium production production plant. explosives in underground mining. Tab. 10. Uranium Production and Reserves in 2016–2018 Commissioning of the Self-Supporting Association Srednee Completed. The SSA Srednee 2nd stage was commissioned reconstruction 2nd stage. for commercial operation. Production Volume, tonnes Commissioning of the Urtuysky open-pit mine drainage Completed. The drainage channel construction is completed. canal. 2016 — 591 .7 | 2017 — 592 | 2018 — 590 Start of the Mine No. 6 construction. Completed. Mine No. 6 infrastructure facilities are under construction: Uranium Reserves, ktonnes • 100% federal budget fund disbursement in the amount of 959 million RUB was provided; 2016 — 7 7. | 2017 — 14 .8* | 2018 — 14 .2
• a contracting programme has been implemented for the * due to theDobrovolnoye deposit licensing supply of works, services and equipment; • the infrastructure facility construction programme for Plan Implementation in 2018 2018 is implemented; • the exploration and production mine (EPM) shaft survey was completed in order to switch to mining and capital Plans announced in the 2017 report Results operations. As part of pilot works, the processing of yellow cake produced Production of 591 tonnes of uranium. Completed. The 2018 uranium production programme has by JSC Khiagda into uranium oxide concentrate is started. been completed in full. Engineering surveys and development of design Completed. An engineering survey report is prepared. documentation for LSU-2 and the railroad base at the Design documentation for the Khokhlovskoye deposit Established in 1968, the Priargunsky Industrial Mining and Khokhlovskoye deposit. railroad base has been developed. Chemical Union (PJSC PIMCU) is now the largest uranium Engineering surveys and development of design Completed. Design and exploration work at the documentation for the Dobrovolnoye deposit PP. Dobrovolnoye deposit are carried out. production enterprise in Russia. In 2018, the company Renewal of the license for the right to use the Completed. The license for the right to use the celebrated its 50th anniversary. Dalmatovskoye deposit subsoil. Dalmatovskoye deposit subsoil has been extended to 31.12.2027 The aluminum-scandium ligature pilot production facility Completed. Due to the changing market conditions, construction has begun. the pilot production facility has been reoriented to the scandium oxide production and quality improvement: a “clean room” has been created, which made it possible to raise the purity of the resulting scandium oxide to 99.9% and higher.
48 JSC Atomredmetzoloto Annual Report 2018 49 JSC Khiagda Uranium production JSC RUSBURMASH JSC RUSBURMASH is a comprehensive service company In 2018, JSC RUSBURMASH carried out drilling, Tab. 11. Uranium Production and Reserves in 2016–2018 that provides drilling, construction and geological construction and geological exploration work for the exploration on behalf of JSC Atomredmetzoloto, as well Holding Company’s uranium production enterprises: Production Volume, tonnes as the construction of all types of wells in solid mineral JSC Dalur, JSC Khiagda and JSC PIMCU, as well as for 2016 — 540 .3 | 2017 — 694 | 2018 — 858 deposits. external customers, such as JSC FCS&HT SNPO Eleron, JSC GIDEK, LLC EuroChem-VolgaKaliy, LLC Mangazeya Uranium Reserves, ktonnes Zoloto, etc. 2016 — 38 .0 | 2017 — 37 .1 | 2018 — 36 .1 Plan Implementation in 2018 Plan Implementation Plans announced in the 2017 report Results in 2018 Plans announced in Results Performance of 100% of the drilling operation volume: Completed in the following volumes: the 2017 report • PJSC PIMCU - 268.816 thousand linear metres; • PJSC PIMCU - actual 230.599 thousand linear metres; • JSC Khiagda - 49.158 thousand linear metres; • JSC Khiagda - actual 53.186 thousand linear metres; • JSC Dalur - 127.663 thousand linear metres. • JSC Dalur - actual 128.068 thousand linear metres. Production of 827 tonnes of Completed. The 2018 uranium production programme has been completed in full. uranium (+133 tonnes to the data Carrying out the new process well design implementation Completed. Since 2018, all newly constructed wells have an of 2017). programme at JSC Khiagda and JSC Dalur. improved design using casing pipes made of unplasticized polyvinyl chloride (uPVC). Istochnoye deposit commissioning Completed. Permission was obtained for the Istochnoye deposit ore in-situ leaching site commissioning. Introduction of the Ready Site concept into the practice of Completed. Work on the Ready Site project at the Vershinny deploying and eliminating the uranium deposit mining blocks deposit (JSC Khiagda) is completed. Beginning of the Kolichkan deposit Completed. Preparation work for the Khiagda ore field Kolichkan and Dybryn deposit using the in-situ leaching method. design documentation development. development are in progress, engineering surveys have been carried out in full. 100% completion of exploration, drilling and construction Completed. Ensuring the development of Completed. Additional equipment was purchased and commissioned to improve work at JSC Khiagda and JSC Dalur. competencies and the introduction the efficiency of repair and recovery activities. New technologies and methods of new methods for repair and for carrying out repair and recovery activities and restoring the process well recovery activities (RRA). productivity are being developed. Commissioning of Dzhilinda 110/10 Completed. Equipment construction, installation and commissioning are performed kV substation (SS). in full. JSC VNIPIpromtechnologii The Smart Mine project Completed. The Smart Mine pilot project at the Istochnoye deposit is completed. implementation. It is a hardware and software complex that allows to maximally automate the pro- JSC VNIPIpromtechnologii is the ARMZ Uranium Holding Co. engineering centre. cess operation management at production sites, provide automated acquisition, storage and processing of geotechnological indicators, develop recommendations The main activities: implementation of mining projects in the EPCM format, environmental consulting, modernization for changing the well operating modes to achieve maximum production and effi- of existing industries. ciency indicators. The project is commissioned, the pilot block operation is being monitored. Plan Implementation in 2018
The Mining Division continues the active development of uranium production using the most Plans announced in the 2017 report Results efficient in-situ leaching method with the JSC Khiagda new modern uranium production
enterprise. The share of uranium produced by the in-situ leaching method in 2018 increased by Further implementation of measures to reach the break- • In progress. In 2018, the key indicators of the enterprise 6 percentage points and amounted to 50%. even through the orientation to the external market (outside financial recovery were approved in order to reach the the Holding Company and industry), as well as through break-even. the JSC VNIPIpromtechnologii inventory of competencies, optimization of production processes and increase in the • Audit of current expenses and optimized production costs institute labour productivity. was performed. JSC Elkon Mining and Metallurgical Plant • A list of activities has been developed and a competence rebranding has been carried out in order to reorient to (JSC Elkon MMP) external customers. JSC Elkon MMP is engaged in carrying out geophysical work, exploration, mining and processing of uranium ores. By • Production increased 1.5 times per person in comparison the ROSATOM decision, the “sleep” mode was extended to December 2019. to the 2017 indicators. An increase in the portfolio of orders and the development • Completed. The book of orders increased 1.5 times, of a strategy for entering the external market in order to taking into account the external market. increase revenue from external counterparties. • A strategy for entering the external market was LLC United Uranium Plants (hereinafter – UUP) developed. Complete the transition to 3D design, implement the Completed. A radiation safety laboratory has been Results of 2018 occupational risk management system, create a chemical organized. Development of BIM information modeling analysis laboratory and a laboratory to assess the resin technologies continued. quality. In accordance with the decisions made by the ROSATOM, LLC United Uranium Plants undergoes a voluntary liquidation procedure. A commercial directorate established in ARMZ. Contracts with customers, as well as contracts related to the sale of uranium raw materials to customers, were transferred to ARMZ.
50 JSC Atomredmetzoloto Annual Report 2018 51 JSC The First Ore Mining Company (FOMC) LLC ARMZ Service LLC ARMZ Service is an authorized body for organizing the procurement procedures of ARMZ Uranium Holding Co. FOMC is developing the Pavlovskoye lead-zinc deposit and is a user of subsoil resources in the Bezymyannaya river enterprises. basin of the Novaya Zemlya Archipelago, Arkhangelsk region. Plan Implementation Plan Implementation in 2018 in 2018 Plans announced in Results Plans announced in the 2017 report Results the 2017 report
Perform engineering surveys for the construction of seaport Completed. The mining and processing works and the port Further provision of procurement procedure Completed. 533 procurement procedures were carried out for the facilities, pass the results for the state expert review. complex construction zone engineering survey results were organizer services to Holding Company enterprises. needs of the Holding Company enterprises. The economic benefit sent to the FAI Glavgosexpertiza of Russia. of price reduction during competitive procurement procedures To complete design work on the MPW facilities and the port Completed. Design and estimate documentation has been amounted to 429.7 million RUB. (4.8%) of the budget prices of ARMZ complex and submit the project for state environmental developed for the mining and processing works and the port Uranium Holding Co. enterprises. impact assessment. complex. Continuation of project activities as part of the Completed: Obtain the Arkhangelsk region priority investment project Completed. The project to develop the Pavlovskoye deposit programme for development of new ARMZ Uranium Holding Co. business areas. • pyrite cinder processing into ferrosilicon. Pilot tests in the repair status for the for tax privileges and other preferences in the on Novaya Zemlya received the Arkhangelsk region priority and mechanical plant (RMP) foundry shop were continued, which process of project implementation. investment project status. was followed by the decision to continue the project; • production of molybdenum products at PJSC PIMCU idle production facilities. The production technology for molybdenum and cesium products has been tested. FOMC: Results of 2018 and plans for the coming PAVLOVSKOYE PROJECT years: Work was also carried out to sell coal and expand its the amount of 254 million RUB. The main efforts are engineering survey at the Pavlovskoye deposit sales market. In 2018, all the coal mined for commercial focused on the selection of buyers for the stable coal completed. Due to the change of legislation in 2018, it sale was sold in the amount of 1.4 million tonnes, which sale throughout the year. The target is planned to add an item on land reclamation to the enabled PJSC PIMCU to profit from the sale of coal in is the creation of a cost-effective industrial complex developed design documentation. In 2019, a positive based on the Pavlovskoye lead-zinc deposit, which conclusion of the state examination is expected. includes a mine and an enrichment plant. The project Work with potential strategic investors and partners is included in the “Social and Economic Development continues, following which ROSATOM is expected to be 4.1.3. Business Diversification of the Arctic Zone of the Russian Federation” state allowed to start financing the enterprise construction. programme, approved by the Government of the Importance of project implementation to 4.1.3.1. Development of New Businesses Russian Federation No. 366 dated 21.04.2014 improve the people life quality and/or preserve (as amended by the Government of the Russian the environment. Federation No. 1064 dated 31.08.2017). The Mining Division is the centre of responsibility for business initiatives as part of horizontal and vertical The project implementation will have a positive providing ROSATOM and the Russian Federation with diversification processes, the result of which is the Goals, objectives: impact on the Arkhangelsk region social and economic uranium and other strategic metals that are used in commercially beneficial provision of primarily Russian the creation of the mining industrial complex on indicators through the creation of infrastructure, the most breakthrough areas of the modern economy: technological development sectors with competitive raw the Novaya Zemlya archipelago for the mining and which is a significant step in the Novaya Zemlya additive technologies, robotics, energy storages, high- material resources. processing of the Pavlovskoye deposit lead-zinc ores. archipelago and the Northern Sea Route development, temperature and renewable energy, etc. The purpose and also significantly expand the Arctic zone resource for ARMZ diversification is the implementation of base to meet the needs of the Russian Federation. The project implementation will allow the business Growth point diversification and the increase in the share of ROSATOM participation in international markets. The development of new ARMZ businesses is based on the national company status that guarantees the satisfaction of the industry needs for raw materials
The JSC Atomredmetzoloto business growth To accomplish these tasks, JSC Atomredmetzoloto implies development through the implementation systematically studies the possibility for developing of diversification projects in the following mining other deposits, including geographically close to those industries: already under development. In particular, ARMZ is * production of energy minerals; working on projects for the solid mineral production (gold, antimony, titanium, zirconium), in the Trans- * production and processing of ferrous and alloying Baikal Territory among others. This will expand the metals; list of produced metals and their compounds, increase * production and processing of non-ferrous metal ores; the depth of the produced raw material processing (production of metals and alloys, and other high-tech * production of natural industrial raw materials and products in the future). raw materials for the building material production. As part of these activities, JSC Atomredmetzoloto implements several projects in various regions of Russia.
52 JSC Atomredmetzoloto Annual Report 2018 53 Fig. 13. Geography of New Business Projects Gold (Severnoye) 4.1.3.2. Project “Production of Associated Scandium at JSC Dalur” (Yakutia)
Pavlovskoye Over the past year, JSC Atomredmetzoloto and JSC Zirconium (Novaya Zemlya) The project is the technology development, (Nizhny Novgorod Region) production facility design and construction for the Dalur increased efforts to promote scandium products associated extraction of scandium from productive on the global and Russian markets in preparation for solutions obtained for the uranium production, based on the launch of its production on an industrial scale, and the existing infrastructure, formed human resources and also improved production technology in order to reduce technological competencies of JSC Dalur. costs and improve the product quality. Contacts and relations were established with interested companies Goal – the project implementation increases the depth in the energy, metallurgy, aerospace and other of the available raw material processing and ensures industries both in the Russian Federation and abroad, the production of products in demand in the form of and the requirements for the quality and technological fluoride and scandium oxide and an aluminium-scandium properties of scandium products were specified in order ligature with high added value at a moderate capital to prepare for its market sale. expenditures. Fig. 14. JSC Dalur Pilot Plant (Dalmatovskoye deposit Central In 2017, JSC Dalur began production of high-purity site) scandium oxide. In 2018, a “clean room” was created – a complex of equipment, which made it possible to increase the purity of scandium oxide to 99.9% and higher. To organize the Lithium aluminium-scandium ligature production, necessary Titanium (Trans-Baikal Territory) measures have been taken: design documentation has (Tomsk Region) been developed and passed independent expert review, Sized Coal a platform has been prepared for the organization of Scandium (PJSC PIMCU) production, the necessary preparatory work has been (JSC Dalur) carried out and some equipment has been purchased. Pyrite Cinders These types of products are the raw material base (PJSC PIMCU) in the ROSATOM and outside for the development of production facilities for the scandium-based upstream operation products: Projects aimed at increasing the depth of our own mineral resource base and industrial waste Large-scale partnership “greenfield” projects: * production of ultrapure metallic scandium; processing: * production of aluminium-scandium powders for 3D printing; * “Scandium”; * “Pavlovskoye”; * production of ceramics for electrochemical current * “Sized Coal”; * “Lithium”; generators using solid oxide fuel cell technology * “Pyrite Cinder Processing”. * “Titanium”; (SOFC); * “Zirconium”; * “Gold” (Severnoe deposit). * production of special alloys and ceramics.
In the traditional operation areas - Trans-Baikal Territory Novgorod and Tomsk regions (titanium-zirconium sands), and the Kurgan region - projects aimed at increasing and also on the gold-uranium deposit in South Yakutia (gold Plan Implementation in 2018 the produced raw material processing depth are being and silver). implemented. JSC Dalur (Kurgan region) continues the An important direction of the implemented programme Plans announced in the 2017 report Results production of scandium oxide and fluoride – associated continues to be the search and implementation of uranium mining products using the drillhole in-situ leaching promising projects involving the use of the PJSC PIMCU method. At PJSC PIMCU (Trans-Baikal Territory), stable infrastructure and material and technical base in the production of high-calorie coal (sized coal) has increased industrial partnership format. Their implementation is Product certification from Russian and foreign Completed. Letters on the product sample quality its sales to new customers in the foreign market. The planned also as part of the Krasnokamensk priority social scandium oxide consumers. compliance with the requirements set by domestic implementation of the project for integrated low-waste and economic development area (PSEDA Krasnokamensk). and foreign consumers were received. pyrite cinder processing will solve the accumulated In 2018, JSC Atomredmetzoloto continued the search for Completion of the design documentation development Completed. Design documentation has been environmental problems in the Krasnokamensky district of potentially interesting projects and business initiatives in for the creation of ligature pilot production facilities. developed for the creation of a pilot production the Trans-Baikal Territory and receive market products in Russia. Among such initiatives is the development of the the process. facilities for an aluminium-scandium ligature and production of rare-earth metals and tungsten products. high-purity scandium oxide. Documentation in Additionally, a project is being developed to restore Currently, these business initiatives are in the development November 2018 received a positive opinion after an the lithium raw material production on the basis of the stage, their target parameters will be determined with due independent expert review. Zavitinsk lithium ore deposit (Trans-Baikal Territory) with consideration of the prospective asset assessment results, subsequent lithium carbonate production in order to as well as the current and forecasted needs for the relevant The ligature pilot production facility construction has Completed. Due to the changing market conditions, meet the production needs of constructed energy storage products from the Russian nuclear industry enterprises, the began. the pilot production facility has been reoriented to the production facilities. Russian and global markets. scandium oxide production and quality improvement: a Work continues on a number of large-scale projects in For more details on the needs for the Holding Company’s “clean room” has been created, which made it possible collaboration with partners from non-uranium industries, products and the markets for its use, see the JSC to raise the purity of the resulting scandium oxide to including on the Novaya Zemlya archipelago (Pavlovskoye Atomredmetzoloto Annual Report for 2016. at least 99.9%. project for the lead-zinc ore extraction), in the Nizhny
54 JSC Atomredmetzoloto Annual Report 2018 55 4.1.3.3. Project “Processing of Pyrite Cinders at PJSC PIMCU” Plan Implementation in 2018
The project – in order to increase the existing man- Fig 15. PJSC PIMCU Cinder Storage Plans announced in the 2017 report Results made material processing depth in the PJSC PIMCU central research laboratory pilot hydrometallurgical shop, pilot works are continuing on the pyrite cinder Completion of the project preliminary feasibility study. Completed. The project technical and economic processing and obtaining finished products in the efficiency parameters were obtained, the form of concentrates of precious and non-ferrous requirements for the infrastructure necessary for metals, ferroalloys and high-purity iron, pigments and created production facilities were determined, a coagulants. preliminary implementation plan was developed. Project goals: Corporate model formation, obtaining the ROSATOM In progress. The project performance indicators are approval and the joint venture - the project operator being optimized as part of the preliminary feasibility * increase in the man-made raw material processing - creation. study (FS) development. depth in the amount of 4.5 million tonnes of pyrite cinders; * revenue diversification; 4.1.3.5. Project “Gold Mining Organization” * solution of environmental problem; The project is the creation of an industrial complex Project goals: * creation of new jobs in PJSC PIMCU. for the extraction and processing of gold-bearing ores * increase the Company’s own raw material base with a ligature gold ingot production on the basis of the processing depth; Severnoe deposit. * business growth; Plan Implementation in 2018 * revenue diversification; * development of the Elkon gold-uranium ore cluster. Plans announced in the 2017 report Results Plan Implementation in 2018 Designing the gold production industrial plant. Completed. The initial design data has been adjusted to represent the technology parameter refinement. Plans announced in the 2017 report Results Development of a programme and process regulations Completed. A pilot works (PW) programme for the for the ferroalloy production from pyrite cinder gold ferroalloy production has been developed, process recovery products. regulations (methods) for PW conducting have been Penetration of exploration ditches and trenches. Completed. Furrow and core samples were taken for prepared. laboratory tests to determine the content and gold reserve calculation. Organization of ferroalloy pilot production at the PJSC Completed. On the basis of the mechanical repair PIMCU industrial site. plant foundry shop, a ferroalloy pilot production site Drilling of exploration and hydrogeological wells. Completed. Data on geology, hydrogeology and was prepared. geomechanics were obtained for the preparation of a temporary condition FS, preparation and approval of Ferroalloy pilot production. Completed. In August 2018, ferrosilicon pilot a geological report with the reserve calculation. production began. First samples were obtained. The sample quality correspond to the FS-65 brand. Creation of a joint venture of PJSC PIMCU and a Negotiations are underway to choose the form of partner in the ferroalloy production. partnerships. 4.1.3.6. Project “Organization of Titanium and Zirconium Concentrate Production at Tugansk Deposit” Starting the ferroalloy production plant design. Postponed to the end of the pilot work and the source data refinement. The project implementation is Fig. 16. Pilot Enrichment Plant Industrial Site Development of the iron coagulant semi-industrial The decision to conduct semi-industrial tests was aimed at import substitution of testing procedure. postponed until all the declared equipment required titanium-zirconium concentrate for experimental work was received. supplies to the territory of the Russian Federation, particularly for consumers included in the ROSATOM and Rostec. 4.1.3.4. Project “Establishment of Lithium Carbonate Production based on Zavitinsk Deposit Ores”
The project is the creation of lithium carbonate * ensuring the strategic raw material import production. substitution and the JSC TVEL needs for the energy storage production facility opening; Plan Implementation in 2018 Project goals: * creation of new jobs in PJSC PIMCU. * Holding Company’s business diversification; Plans announced in the 2017 report Results
Start of design work at the first stage of production Completed. The feasibility for JSC Atomredmetzoloto (capacity 0.575 million tonnes/year) to become a Tugansk Ore Mining and Processing Enterprise Ilmenite shareholder has been approved by the ROSATOM
56 JSC Atomredmetzoloto Annual Report 2018 57 4.1.3.7. Project “Load-Haul-Dump Machines for Underground Mining Operations” At the end of 2018 The project is the organization and development of * a device for remote monitoring of equipment about load-haul-dump machine (LHD) domestic production at condition is installed. the PJSC PIMCU repair and mechanical plant facilities. The use of these technical solutions has reduced the power consumption by up to 30%. Project goals: Additionally, modern achievements in the field of * creation of domestic production of battery and diesel 900 31 920 ergonomics are applied, which ensures comfortable work people people people load-haul-dump machines. of the machine operator. were involved in the were recognized as the RPS have been trained in the RPS Factory tests of the electric load-haul-dump machine The machine design is convenient for maintenance and implementation of various RPS leaders tools and procedures PD-2EE for underground mining are completed. repair, and the layout of all the assemblies allows to programmes The machine has improved technical characteristics: later reequip the machine for using lithium-ion batteries * electric power drive is applied instead of hydrostatic as an energy source. Compliance with product quality requirements transmission; * there is an automatic control system for hydraulic In August 2018, JSC Dalur received certificates for In December 2018, JSC Atomredmetzoloto, JSC units integrated into one information channel with a compliance with international standards: ISO 9001:2015 PIMCU, JSC Khiagda underwent an inspection audit traction electric drive control system; – quality management system; ISO 14001:2015 – for compliance with the requirements of international environmental management system. standards: ISO 9001:2015 – quality management system; ISO 14001:2015 – environmental management 4.1.3.8. Project “Zirconium” Fig. 17. Carrying Out Pilot Industrial Works on Hydraulic Borehole Mining system. The project is the development of the alluvial Lukoyanovsky In 2018, there were no complaints about the titanium-zirconium deposit, which finished products of the mining enterprises will allow not only to close the billion RUB PJSC PIMCU, JSC Dalur and JSC Khiagda from current demand for raw materials 1.3 product consumers, all manufactured product inside the ROSATOM, but also total actual effect on measures to improve operational to receive revenue from foreign efficiency, including the implementation of RPS batches met the specifications. customers. Currently, there are activities no enterprises in the Russian Federation that develop titanium- The Holding Company’s enterprise For many years of conscientious work, significant zircon placers in industrial volumes. (PJSC PIMCU, JSC Khiagda, JSC Dalur) success in professional activities, a great personal contribution to the nuclear industry development and PRODUCT CONSUMER - due to the 10th anniversary of the ROSATOM Production System, 19 people were awarded distinctions, gratitude JSC SIBERIAN CHEMICAL from ROSATOM and the RPS Development Director of PLANT ROSATOM. 4.1.4. ROSATOM Production System. Compliance with Product Quality Requirements Comprehensive Energy Saving Results of 2018: * due to the implementation of technological solutions, and Efficiency Improvement Programme GRI 302-4 process optimization during the Ready Site project * due to the implementation of technological solutions, implementation, JSC RUSBURMASH achieved an For more details on the implementation of the Energy Saving and Efficiency Programme, optimization of longwall face extraction processes economic benefit in the amount of 23 million RUB; at PJSC PIMCU, additional 1,475 tonnes of ore were see the JSC Atomredmetzoloto annual reports for 2016 and for 2017. mined during the implementation of the “Optimization * due to the replication of the of in JSC Dalur work of longwall face extraction during the underground results under the project “Reduction of the lead time Mine No. 8 reservoir deposit development” project; at the reserve opening and preparation” to the central production site (CPS) and Sredne-Uksyansk deposit, an Energy Saving and Efficiency Programme implementation results * by changing the scheme for rock mass haul-up to the economic bebenfit of 14 million rubles was achieved; dispensing trunk, organizing a car exchange point in 2018 * due to the continuation of work in JSC Dalur on on the 5th horizon and a number of technological Tab. 12. JSC Atomredmetzoloto Energy Consumption in 2018 GRI 302-1 solutions, it was possible to reduce the lead time the project “Replacement of ammonium salt with anhydrous ammonia during the commodity desorbate (LT) (from 120 to 50 minutes), increase the trunk Enterprise Electric energy Motor gasoline* Diesel fuel productivity (from 380 cars/day to 568 cars/day) deposition”, an economic benefit of 17 million RUB during the implementation of the “Organization of the was achieved. TJ RUB '000 TJ RUB '000 TJ RUB '000 underground Mine No. 1 dispensing trunk rhythmic JSC Atomredmetzoloto 12.13 4,624 4.3 2,772 0 0 operation” project; * JSC Atomredmetzoloto purchases transportation services from LLC ARMZ Service During 2018, JSC Atomredmetzoloto spent 61,600 litres of on the rented area. Under the lease agreement, electricity AI 95 gasoline (with an average cost of 45 RUB/litre - 2.772 supply is included in the list of utilities and is paid monthly million RUB). on the separate account basis. In the reporting period, For more details on the main objectives and areas of work under the RPS, Other types of energy resources (coal, fuel oil, natural gas) 904,071 kW·h of electricity was consumed for a total of see the JSC Atomredmetzoloto public annual report for 2017 are not used by the Company. The Company office is located 4,624 million RUB.
58 JSC Atomredmetzoloto Annual Report 2018 59 Results of 2018: * measures have been implemented for the financial The key impact on the Division indicators had rehabilitation of JSC VNIPIpromtechnologii, including an increase in the sale price of uranium, which In the field of incentive system implementation: additional capitalization in the amount of 1.0 billion compensated for the planned decline in uranium RUB; Inclusion in KPIs of top managers and chief specialists, technologists, mechanics, etc. the “energy saving” indicator sales and ensured an increase in gross profit. with a share of at least 10% - for “non-energy sector” and 20% - for “energy sector”. * further (in the conditions of high working capital cost on the financial markets on a daily basis) work The enterprises producing uranium using In the field of energy saving and efficiency: on consolidating the temporarily free funds of the the in-situ leaching method have achieved a Holding Company enterprises, which made it possible reduction in the specific cash cost of production PJSC PIMCU: JSC Dalur: to obtain additional profit in excess of the industry- of 1 kg of uranium by 5%. * further implementation of measures to reduce * further partial replacement of low-efficiency light wide corporate percentage; The dynamics of management expenses are kept electricity and power consumption on the wholesale sources with LED lights; * further work on the weekly monitoring of the level at a level below inflation. market during peak hours in the power system of the of receivables and payables of the Holding Company * further acquisition of submersible pump control Trans-Baikal Territory; enterprises in the context of external and industry stations with variable frequency drives; counterparties to improve the working capital * further implementation of measures to reduce the * switching of switchgear and control gear management. power purchase cost; (SWCG) relay protection at Rudnaya SS to digital * daily submission of the electricity consumption technologies. forecast for the day ahead, control over the equipment operation forecast performance and JSC Khiagda: GRI 102-7, balancing in accordance with the forecast; 4.2.2. Financial Management Performance 201-1 * further lighting system reconstruction; * reduction of electricity consumption for heating fire Tab. 14. Consolidated Report on the Financial Results of JSC Atomredmetzoloto and Russian companies in the Area of its * preparation of a project for the reconstruction tanks in winter; Management and Consolidation*, million RUB of production site supply and exhaust ventilation * quantitative adjustment of the coolant in the input systems; Indicator name 2016 2017 2018 nodes; * acquisition of submersible pump control stations Revenue from sales 22,182 17,759 18,496 * replacement of low efficient light sources; with variable frequency drives; Profitability of sold products -14,348** -15,487** - 15,403 Net profit (loss) 7,834** 2,272** 3,093 * optimization - reducing the length of the compressed * creation of a dispatching system and accounting of air network surface pipelines. consumed energy resources with the expansion of an Selling costs -383 -423 - 651 automated information and measurement system for Administrative expenses -2,729 -2,720 -2,826 technical electric power accounting (AIIS TUE) – the Interest receivable 426 248 222 first stage has been completed. Interest payable -916 -218 -64 Other income and expenses 930 -6,809 -3,206 GRI 302-4 Tab. 13. Energy Savings Compared to the 2015 Base Year in Comparable Conditions for 2016–2018, million RUB, % Profit (loss) before income tax 5,162 -7,650 -3,434 Income Tax -557 -226 -671 2016 (base 2017 (base 2018 (base Enterprise 2015 % % % % Net income (loss) 4,605 -7,876 - 4,104 2015) 2015) 2015) *The consolidation perimeter includes JSC Atomredmetzoloto, PJSC PIMCU, JSC Dalur, JSC Khiagda, JSC VNIPIpromtechnologii, JSC RUSBURMASH, LLC ARMZ Service, JSC Elkon PJSC PIMCU 68,985 9.5 210,278.58 14.45 201,659 13.85 150,788.87 10.36 MMP, JSC EGMK- Project. **The data for 2016 and 2017 are recalculated taking into account the ROSATOM State Atomic Energy Corpo-ration decision on changing the rules for management expense JSC Dalur 9,232 14 1,442.72 0.82 2,128 1.20 3,424.92 1.94 calculation. From 2018, management expenses of subsidiar-ies are represented in management expenses, and not in cost, as was previously established. JSC Khiagda 7,525 24.9 16,385.14 10.63 4,324 2.80 8,106 5.26 For details on the principles of preparing financial statements, see JSC Atomredmetzoloto annual report for 2017.
Revenue increased by +0.7 billion RUB, including: The negative balance on other incomes and expenses 4.2. Financial Capital * +1.7 billion RUB - increase in the natural uranium and the net loss are mainly due to the depreciation of selling price; financial investments (mainly in foreign assets) due to the revision of the Mantra Resources Limited production GRI 201-1 4.2.1. Financial Management * -1.0 billion RUB - decline in sales of uranium and programme and the change in the price forecast for non-uranium products. uranium. GRI 201-2 Results of 2018: Financial aspects, as well as other risks and The increase in selling expenses was due to a change * the Holding Company’s loan portfolio reduced (as a opportunities for the organization to operate in the base of coal supply to key buyers with a result of successful equity management) to zero; associated with climate change, are not simultaneous increase in revenue to compensate these costs. * the positive balance (profit) on interest income assessed at JSC Atomredmetzoloto and expenses is preserved (due to the effective management of the Holding Company working and borrowed capital); * the federal budget subsidy in the amount of 0.96 * the measure for the additional capitalization of billion RUB, aimed at the construction ofthe mine PJSC PIMCU in the amount of 13.2 billion RUB is infrastructure facilities, as part of the investment implemented, which made it possible to significantly project “Development of the Argun and Zherlovoye reduce the level of debt burden on the company and deposits. Construction of PKSC PIMCU Mine No. 6 in create a reserve for the profitable operation of this Trans-Baikal Territory” is received and used in full. asset in subsequent years;
60 JSC Atomredmetzoloto Annual Report 2018 61 Tab. 15. Consolidated Report on Financial Position of JSC Atomredmetzoloto and Russian companies in the area of its Management and Consolidation, million RUB 4.2.3. Investment activities
Indicator 2016 2017 2018 The Holding Company investment activity is aimed at achieving the ROSATOM and the Mining Division strategic goals. Fixed assets 131,091 127,180 140,461 Investments in the development and maintenance of * production modernization and technical Intangible assets and R&D 6,468 6,432 6,540 existing uranium production enterprises amounted to re-equipment; Fixed assets 33,132 32,742 32,999 4.7 billion RUB and were aimed at: * information and technology support; Long-term financial investments 86,812 83,111 95,821 * construction and installation work at production, Other non-current Assets 4,678 4,895 5,101 infrastructure and energy facilities; * design work, R&D; Current assets 10,353 9,400 14,284 * production facility design; * security; Reserves 4,393 2,787 3,569 * carrying out main development and mine preparation * acquisition of production and drilling equipment. Accounts receivable 2,453 3,255 3,580 work; Financial investments 495 0 3,901 Cash 2,833 2,826 3,002 The main investment Other Current Assets 180 532 232 objects TOTAL ASSETS 141,444 136,580 154,745 5 .4 billion RUB 4 .7 billion RUB Capital and reserves 135,447 131,187 148,784 The total investment of the Holding Development projects of PJSC PIMCU investment in the development and Capital (authorized, additional, reserve) 90,532 94,073 115,792 Company in 2018 (including Mine No. 6 and non-uranium maintenance of the main uranium projects), JSC Khiagda, JSC Dalur, JSC The production in 2018 Retained earnings 44,915 37,114 32,992 First Ore Mining Company (Pavlovskoye Long-term liabilities 50 217 1,439 project), as well as investments in maintaining existing production facilities Borrowed funds 0 0 0 Other long-term liabilities 50 217 1,439 Current Liabilities 5,947 5,176 4,522 Borrowed funds 2,027 462 13 Fig. 18.Investment Dynamics by Project Groups in 2016-2018 The Pavlovskoye project implementation continued, its goal is to create an economically efficient production complex based Loan payable 2,515 3,291 3,167 on the Pavlovskoye lead-zinc deposit in the Novaya Zemlya Future income 213 219 31 archipelago: survey works have been completed, survey results 5 2% have been commissioned to the Glavgosexpertiza of Russia, Provisions for future expenses 1,039 967 1,046 4% 4% 12% and the developed project documentation is planned to be Other liabilities 153 237 265 26% 16% completed with a land reclamation plan. A new project was TOTAL CAPITAL AND LIABILITIES 141,444 136,580 154,745 launched to organize gold production at the Elkon district Severnoe deposit, prospecting and appraisal work was carried 86% 1 70% 80% out, preparations are underway to calculate and protect Profitability of sales is directly dependent on revenue growth in 2018. reserves. 2% Tab. 16. Dynamics of Key Financial Indicators of JSC Atomredmetzoloto for 2016-2018 12% 0 Change Indicator name 2016 2017 2018 2016 2017 2018 2018/2017 Financial sustainability indicators Existing uranium production enterprises Existing and other non-uranium projects Share of equity in assets 0.4 0.4 0.7 +0.3 Fig. 19. Investment Project Other projects Liquidity indicators Groups in 2018, %
Current liquidity ratio 1.7 1.8 3.2 +1.4 In 2018, the total investment of the Holding Company increased Quick ratio 1.0 1.2 2.3 +1.1 by 11% compared with 2017, which is mainly due to the acceleration of the implementation of key uranium projects Profitability of sales, % (including Mine No. 6). Profitability of sales 28.0% 3% 17% +14% In accordance with the approved plans of the Holding Company 86% for 2019, an increase in the investment programme by 58% is provided due to the implementation of measures for the Mine Uranium projects Non-uranium projects The key financial indicators are within the limits of temporarily free JSC Atomredmetzoloto funds in No. 6 construction, acceleration of the development of new deposits at JSC Dalur and JSC Khiagda, increasing the pace of average regulatory values, which characterizes the pool-leading accounts as part of the ROSATOM Other projects of modernization and replacement of obsolete equipment for the Holding Company as a financially sustainable corporate financial policy for their subsequent use for uranium and the coal business at PJSC PIMCU, as well as the The structure of investments in key areas of the Holding company that is able to respond to its obligations in the purposes of financing the operating and investment development of new business areas (“Titanium” at the Tugansk Company activities in 2018 did not undergo significant a timely manner. Significant improvement in financial activities of existing Holding Company enterprises and deposit, the Pavlovskoye project, gold production at the changes: the main part is still held by investments in performance is due to the increase in the Holding its new projects in 2019. Severnoe deposit). the development and maintenance of existing uranium Company current assets, formed by the growth in the Levels of liquidity indicators and their positive dynamics In 2018, one of the main priorities was the work on business mining enterprises of PJSC PIMCU, JSC Khiagda, Holding Company stocks, as well as short-term financial confirm the absence of risks of a fund shortage and a diversification and the development of non-uranium projects. JSC Dalur. investments at the end of 2018 in the form of placement high level of the Holding Company solvency. *The pool leader is the ROSATOM company, whose accounts accumulate free funds and redistribute them among the Corporation organizations through loan agreements, which are appointed by a decision of the ROSATOM executive bodies.
62 JSC Atomredmetzoloto Annual Report 2018 63 The results of the Holding Company investment programme implementation: Results of 2018 in the field of the Holding Company investment and project activity management: * optimized investment costs of uranium projects * as part of the business diversification development, PJSC PIMCU (42% of the Holding Company investment 4% (JSC Khiagda, JSC Dalur) by 1,424 million RUB the Governing Board powers in the areas of programme): 4% without prejudice to the production programme traditional and new business are divided, which will * The Mine No. 6 infrastructure construction continues: implementation; ensure a greater differentiation of competencies the main step-down substation (equipment supply when considering investment decisions and increase * reduced the “Coal” project capital costs by 24% and construction work are 95% complete); roads their efficiency; (work are 100% complete); MWTP (zero cycle work is due to optimization of the need for mining and underway); Fig. 20. ARMZ Uranium transportation equipment. * a set of measures was implemented to increase the Holding Company project management maturity: * the 2nd stage of the Srednee tailing dump was Holding Co. Key 42% * work continued on the development of the industry 19% Investments in 2018, % commissioned for commercial operation; information system for investment pro-jects Sirius, - a pilot assessment was made of the current Division the ARMZ investment service took part in the system maturity level based on the Government of the * an own granulated explosive production plant was improvements, in particular, the intro-duction of a Russian Federation methodology; in 2019, the commissioned; new “post-investment monitoring” unit, testing of the ambitious task is to reach the next level of project * the survey of the 19 RESH, 13K mine shafts was system integration results with the Microsoft Project management maturity; completed with a view to transition to main Professional client application; - participation in the industry conference with a report on the project management features in development; 31% * the work was carried out on the implementation of ARMZ; the programme approach: a joint on-site conference * the Urtuysky open-pit mine drainage canal - training of key subsidiary staff involved in project PJSC PIMCU JSC Khiagda was held with ROSATOM representatives to share construction was completed, which will ensure coal activities in the Project Management School was JSC Dalur Pavlovskoye experience as part of the project management mining for the next decade. conducted. Other projects system; linear-normative acts of the Holding - the Holding Company has summed up the results of Company were tailored to the programme approach the competition for the title of the best investment specifics; the first programme for the Holding service and the best employee of the investment Company (Khiagda programme) was approved at the service in three nominations. ROSATOM Investment Committee; JSC Khiagda (31% of the Holding Company investment JSC Dalur (19% of the Holding Company investment programme): programme): * permission to commission the Istochnoye deposit * an engineering survey report has been prepared, Measures to improve the efficiency of investment activities and optimize the investment process in the Division made obtained; design documentation for the Khokhlovskoye deposit it possible to increase profitability rates, reduce the amount of equity funds and own sources of funding allocated for railroad base has been developed.; the current maintenance of industrial site equipment and infrastructure, strengthen the responsibility of the Division’s * preparation work for the Khiagda ore field Kolichkan enterprise employees for implementing investment activities and achieving the target financial indicators by projects. and Dybryn deposit development are began, * design and exploration work at the Dobrovolnoye The integral indicator of investment activity is fulfilled by 106.6%. engineering surveys have been carried out in full; deposit has began; * additional equipment was commissioned to improve * the license for the right to use the Dalmatovskoye the efficiency of repair and recovery activities. new deposit subsoil has been extended to 31.12.2027. technologies and methods for carrying out repair and recovery activities and restoring the process well productivity were developed; * construction and installation work on installation and commissioning of equipment at the Dzhilinda 110/10 JSC The First Ore Mining Company (Pavlovskoye kV substation were performed; project – 4% of the Holding Company investment programme) * the Smart Mine project pilot operation was launched. * survey work on the MPW and the port complex have See details in Section 4.3.3. Digital Economy Performance. been completed, project documentation has been developed; * the engineering survey results are handed over to GGE.
64 JSC Atomredmetzoloto Annual Report 2018 65 Key project No. 2 4.3. Intellectual Capital Scientific and technical support of the development of uranium deposits by the drillhole in-situ leaching method (DISL) 4.3.1. Intellectual Capital Management JSC Dalur JSC Khiagda * The introduction of innovative mining and geological * The development of new computer programmes In 2018, the costs of the Holding Company innovative Fig. 21. Costs of the Holding Company Innovative evelopment computer technologies and software continued. The designed to monitor the subsoil geological and activity amounted to 51.53 million RUB. Programme in 2016–2018, million RUB application of the created software and information geochemical state in existing technological units 350 complex is the basis for the development of the based on mathematical modeling and to develop At the same time, financing orders in universities - 13.31 “Smart Mine DISL” system and makes it possible to long-term technical and economic models of million RUB, and in small and medium-sized businesses - 250 improve the accuracy of reserves calculation, the enterprise development with the aim of improving 16.17 million RUB. 200 quality of operational block design and the mining planning has been completed. efficiency of Dalmatovo and Khokhlovsky uranium The main reasons for a significant reduction in funding * Additional equipment was purchased and 150 345.4 208.72 deposits. for innovation were the following factors: suspension of commissioned to improve the efficiency of repair and the “Lithium” project implementation, postponement 100 * The introduction of this complex, the intellectual recovery activities. New technologies and methods of the aluminium-scandium ligature production plant rights to which belong to JSC Dalur allowed to for carrying out repair and recovery activities and construction, reformatting of the project for the pyrite 50 51.53 attribute the JSC Dalur products as innovative. restoring the process well productivity are being cinder processing at PJSC PIMCU. 0 developed. 2016 2017 2018 * In 2018, continued pilot work on the development of new process well designs. Since 2018, all newly * New designs of technological wells using new constructed wells have an improved design using materials for casing, filters and behind-the-casing casing pipes made of uPVC. The work on further waterproofing have been developed and introduced. improvement of the well construction and equipment 4.3.2. Innovative Development Programme * The Smart Mine pilot project at the Istochnoye will be continued in 2019. deposit is completed. It is a hardware and software The ARMZ Innovation Development Programme is an * improving the uranium production efficiency at * In 2018, the development of a project for exploration complex that allows to maximally automate the integral part of the ROSATOM Innovation Development existing uranium production enterprises; at the Dobrovolnoye deposit was completed with the process operation management at production and Technological Modernization Programme for the * break-even of existing uranium production inclusion of integrated logging wells using the LIFN sites, provide automated acquisition, storage and period up to 2030. The key objectives of the ARMZ enterprises; and PNNL methods in the geophysical survey. Work processing of geotechnological indicators, develop Innovation Development Programme up to 2030 are: on the Dobrovolnoye deposit is planned to be carried recommendations for changing the well operating * production diversification. out in the period of 2019–2020. modes to achieve maximum production and efficiency indicators. The project is commissioned, the pilot * The pilot works on the associated extraction of block operation monitoring is organized. scandium from uranium production mother liquors The ARMZ innovative development programme consists of two key projects: were continued, the production of high-purity * In 2018, work was continued on the implementation (99.9%) scandium oxide was launched. of integrated logging using LIFN and PNNL methods with LIFN drilling rate measuring apparatus at Key project No. 1 * Work was done to determine the processing JSC Khiagda sites. Based on the results of the Scientific and technical support of the development of uranium deposits by the technology for productive solutions in the pilot work work performed, it was recommended to use the production at the Dobrovolnoye deposit. underground mining method (UMM) LIFN method in all process wells in the course of mine preparation work to reliably determine the * In 2018, PJSC PIMCU continued research on the * In 2017, work began on the complete elimination or parameters of ore intervals and reserves, as well parameters of hardening and pasta laying of the replacement of pyrolusite in the hydrometallurgical as during test drilling and when the process well developed mountain space based on uranium ore ore raw material processing with cheaper oxidizers. network is thickened in existing and redeemable processing tailings. Works on pasta thickening of In 2018, a technology was developed to produce an sections of deposits developed by drillhole in-situ carbonate ore processing tailings were performed. oxidizing agent, the raw material for which can be leaching method. The implementation of the project “Development pyrite cinder. The technology of using sodium nitrite of technology for deep radioactive waste thickening as an oxidizing agent alternative to pyrolusite has from the processing of uranium ores for surface and also been developed. Completion of works is planned underground disposal”, funded from the targeted in 2019 after conducting semi-industrial tests. Areas and results of innovative and scientific and technical activities for 2018 JSC funds of ROSATOM, has been launched. Geological * Studies on the topic “Development of water VNIPIpromtechnologii: exploration wells were drilled with core samples treatment technology for the East-Urulyungui taken from the surface of the PJSC PIMCU Mine No. * Development of technology for the spent chamber paste filling with paste are studied. The most effective options underground water deposit” were carried out. In 6 to extract dolomite ores. In 2019, this material will backfilling based on uranium ore processing tails. Deep for the possible arrangement of paste backfilling in the 2019, pilot works are planned for this topic. be used for the development of process regulations thickening of tailings with the addition of cement made spent chambers of the Mine Number 6, in the preserved it possible to obtain a high-strength material (1.6 – 2.5 mines, PJSC PIMCU quarries of Tulukui and Krasny Kamen, for the processing of uranium ores from the Mine No. * Recommendations have been developed for the MPa) and low radon emission (up to 500 mBq/m2s). It is have been established. 6. introduction and further optimization of ore flows determined that the paste backfilling emits radon from with a low uranium content in the ores supplied for * Assessment of the state of sites for underground nuclear * Laboratory studies on the agglomeration of fine near-surface layers and can be used as an additional explosions and the development of measures for their processing at the PJSC PIMCU LP and the HL section, fractions of ore raw materials for further processing protection during storage of air-conditioned class 3 and 4 rehabilitation. in order to reduce the uranium cost. radioactive waste. Conducted tests of various measures to by heap leaching (HL) are completed. The developed suppress radon emission allowed us to identify the most * Development of technical solutions for the disposal of technology efficiency was confirmed (uranium * Laboratory tests have been initiated to intensify the effective ones for development systems with a layered solid radioactive waste and assessment of the status extraction is on average 10% higher than by leaching process of heap leaching of uranium from off-balance notch and chamber. The methods of spraying insulating and prospects for industrial liquid and radioactive waste non-agglomerated raw materials). An agglomerator sheet and low-balance ores using aerobic bacteria. geomembranes onto the surface of mine workings before injection point operation. and a stacker were purchased for pilot works, which will begin in April 2019.
66 JSC Atomredmetzoloto Annual Report 2018 67 Results of intellectual activity (RIA) 4.3.3. Digital Economy Performance Results of 2018 SMART MINE PROJECT OBTAINED: REGISTERED: The bottom line * four patents for inventions (JSC Dalur, * eight know-hows (JSC VNIPIpromtechnologii). JSC VNIPIpromtechnologii). is an innovative project, in which intellectual digital methods are developed for the extraction of uranium and other solid minerals. APPLICATIONS FOR STATE REGISTRATION Goals, objectives: the reserve production life cycle digitalization and the mining complex optimization. Using embedded geological OF INTELLECTUAL ACTIVITY RESULTS HAVE BEEN and mathematical methods, modern video surveillance tools, intelligent sensors and robotic mechanisms, based SUBMITTED: on real-time data, the system models and maintains the optimal operating conditions for the mining complex. * three – for a certificate on PC (JSC Khiagda); Results of 2018 and plans for the coming years: * two – for an invention patent (JSC VNIPIpromtechnologii). * An intelligent technological solution Smart Site (part of the Smart Mine project) has been put into pilot operation in JSC Khiagda (Republic of Buryatia), which provides for the digitalization of the uranium mining life cycle by the method of drillhole in-situ leaching. The main Smart Site solution options include: Tab. 17. Receipt of Security Documents on the RIA for 2012-2018. - visualization of the dynamics of changes in the structure of the extracted ore body, the movement of underground solutions, the identification of inefficient areas and forecasting of mining processes (digital (2D / Total, Of them RIA 2012 2013 2014 2015 2016 2017 2018 3D) twins for reserves and mining processes); pcs. implemented - automatic support of the optimal operation mode of well equipment in permafrost conditions without visiting Invention 2 6 2 3 2 5 4 24 8 the site by personnel; patent - smart video surveillance of the site operation in 24x7 mode; - automatic synchronization with enterprise data storage. Utility model - - - 1 - - - 1 1 patent For the first time in the world, an uranium production enterprise used digital modeling to assess the state and PC certificate 1 1 5 9 4 11 - 31 31 forecast the changes in the environmental situation in the area of direct man-made impact on aquifers. With Database - - - - 1 - - 1 1 the “smart” technologies of modeling and 3D-visualization, it is possible to see how technological solutions are Know-How - - - - 2 - 8 10 0 moving underground duing the mining. This ensures safe production and the ecosystem preservation. Total: 3 7 7 13 9 16 12 67 41 (61 .2%) In 2019, it is planned to confirm the project efficiency and transmit the experience to other enterprises. We share the goals of UN sustainable Elements of the Smart Site solution are also planned development and the Social Charter Knowledge management system * Published in publications and reports at conferences to be implemented at JSC Dalur (Kurgan region). of Russian Business, and strive to in the field of atomic energy*: ensure high standards of environmental * A link (https://nti.rosatom.ru/) to a full-text copy of Importance of project implementation protection and industrial safety. the anniversary issue of the Mining Journal No. 7 - 2016 - 4 articles and 18 reports; to improve the people life quality and/or for 2018, dedicated to the 50th anniversary of PJSC - 2017 - 11 articles and 25 reports; PIMCU (http://rudmet.ru/catalog/journals/1/1744/) is - 2018 - 15 articles and 21 reports; preserve the environment placed on the STI portal of ROSATOM. * During the work of the JSC VNIPIpromtechnologii The transition to the smart management of mining technological processes on the basis of digital technologies * More than 9,500 documents from the archives of Young Specialist School: makes it possible to make domestic uranium mining less costly and more environmentally friendly. scientific and technical information (engineering - 6 meetings were held; surveys and design estimates) were digitized in - 7 lecturers delivered speeches. VNIPIpromtechnologii. * The International Scientific and Technical Conference “Modern Innovative Technologies in Mining and Mineral Processing” was organized and held at JSC VNIPIpromtechnologii.
*The data was refined due to a change in the methodology for calculating publication activity (the perimeter of organizations expanded, absolute figures are given due to the refusal of recalculation for 100 researchers and developers). 68 JSC Atomredmetzoloto Annual Report 2018 69 4.4.2.2. . Protection of water resources GRI 303-1 GRI 201-2 4.4. Natural Capital Water intake
Tab. 18. Water intake by Purpose and the Holding Company Enterprises in 2016–2018, million m³ GRI 303-2 4.4.1. Natural Capital Management. Environmental Policy Industrial water Household water Underground water Increase of the Enterprise Total water intake intake intake sources established limits GRI 1022-11 The JSC Atomredmetzoloto environmental policy When planning production activities, we has been in effect since 2013 and ensures the 2016 2017 2018 2016 2017 2018 2016 2017 2018 2016 2017 2018 2016 2017 2018 implementation of the main provisions of the ensure compliance with the requirements PJSC PIMCU 22.714 19.503 23.289 4.94 5.193 5.411 34.174 31.304 35.269 28.374 25.703 29.973 0 0 0 Constitution of the Russian Federation and the Russian of the Russian legislation in the field of Federation legislation, the international standard ISO environmental protection JSC Dalur 0.051 0.053 0.055 0.052 0.052 0.046 0.103 0.105 0.100 0.103 0.105 0.100 0 0 0 14001 and the Environmental Policy of ROSATOM.* JSC Khiagda 0.188 0.159 0.154 0.037 0.047 0.038 0.228 0.215 0.196 0.228 0.215 0.196 0 0 0
The goal of the JSC Atomredmetzoloto environmental policy is to ensure the Company’s environmentally Water supply of PJSC PIMCU industrial facilities and PJSC PIMCU carries out water use exclusively under oriented development while maintaining a high level of environmental safety and reducing environmental the population of Krasnokamensk, including hot water the current legislation, including the following regular risks. supply, is centralized, mainly from the groundwater of measures to reduce water consumption: elimination of the East Urulyungui basin (20,529.62 thousand m³). leaks in pipelines and the use of a water intake metering system. However, the main item of water saving is the Additional water supply sources for technical needs, full use of Urtuysky open-pit mine drainage waters and 4.4.2. Natural Capital Management Performance including for ensuring the production cycle at the LP the uranium mining production mine waters in technical and CHPP (maintaining the required water level in the water supply. Increased water use is related to water GRI 301-1 4.4.2.1. Protection of Land Resources and Biodiversity reservoir) are: demand. In 2018, the biological stage of the water-overflow ditch reclamation from the Umykey lakes system to the Khara-Nur * Argun River surface waters – 5296.42 thousand m³; lake was carried out. Water supply at JSC Khiagda is carried out via drinking Fig. 22. Total Number of Lands Disturbed at PJSC PIMCU * Urtuysky open-pit mine drainage waters – 3563.34 water supply wells. The reduction in water consumption in 2016–2018, ha In 2018, 43.77 ha of land were disturbed at JSC Khiagda, thousand m³; is associated with measures to improve the efficiency of including: * uranium mining production mine waters - 5879.61 production processes, as well as with the reduction of 45 42.5 * 29.37 ha – the area of disturbed land in the thousand m³. water losses, the introduction of the 1st and 2nd water 40 elevation station equipment remote monitoring and the development of mineral deposits at the Khiagda ore 35 elimination of overflow and water leakage. field Vershinny deposit; 30 25 At JSC Dalur, water intake indicators in 2018 compared * 14.4 ha – the disturbed land area during construction 20 works at the Khiagda ore field Istochny deposit. 15 to 2017 did not change. 10 5 JSC Dalur performed the following work related to the 5 0.08 violation of the fertile soil layer integrity: 0 * preparation of construction sites (in the form of 2016 2017 2018 the 0.15–0.2 m thick soil stripping) for construction and installation work on the Dalmatovskoye deposit Fig. 23. Total Number of Lands Disturbed at JSC Khiagda operational blocks; in 2016–2018, ha Wastewater Discharge GRI 306-1, 3 * soil stripping was carried out mechanically and is 31.167 thousand m³ (on an area of 183,452 m2). 60 55.8 50 * the soil stripping works were performed in 43.77 Tab. 19. Wastewater Discharge at PJSC PIMCU in 2016–2018, million m³ accordance with the approved documentation 40 developed by JSC VNIPIpromtechnologii. 30 Year/water volume 2016 2017 2018 19.297 20 The stripped vegetative fertile layer was fully used at Discharged wastewater 11.375 11.039 10.74 the final stage of construction, while improving the 10 volume territory of the erected facilities. Part of the vegetable 0 ground and topsoil, stripped previously (in previous 2016 2017 2018 years) at other construction sites in the amount of 6.837 Regional authorities of the Trans-Baikal Territory capacity of 40 thousand m³ per day in Krasnokamensk” thousand m³, continues to be stored in the dump. with the participation of the urban settlement and introducing it on the newly formed land plot, which Fig. 24. Total Number of Lands Disturbed at JSC Dalur “Krasnokamensk City” administration representatives, is related to the inexpediency of the reconstruction of in 2016–2018, ha PJSC PIMCU, branch of JSC OTEK in Krasnokamensk the 1st stage of sewage treatment facilities due to the are working on the issue of developing a new project high degree of wear of sewage treatment facilities (STF).
20 18.345 “Construction of sewage treatment facilities with a 18 16 14 12 10 GRI 304-2 8 6 4 3.68 There are no protected areas and territories 1.818 2 with high biodiversity value in the Mining 0 Division enterprise influence zone 2016 2017 2018
*ARMZ Environmental Policy is available at http://www.armz.ru/development/environmental/ 70 JSC Atomredmetzoloto Annual Report 2018 71 JSC Khiagda 5% Tab. 22. Pollutant Emissions into the Atmosphere in 2015–2017, JSC Dalur, tonnes 8% Wastewater discharges into water bodies are not carried 20% out, as: Year/Pollutant 2016 2017 2018 * technological solutions circulate in a closed cycle; 8% Carbon oxide 8.094 6.261 1.207 * domestic wastewater is received at a complete Sulfur dioxide 0.0071 0.006 0.0071 biological treatment station, where treatment and 4% Fig 25. Share of pollutants Nitrogen oxides (in terms of NO2) 3.009 2.247 0.06803 decontamination are carried out. The treated and discharged in 2018 into the Specific pollutants* 0.965 0.826 1.3827 disinfected wastewater is discharged into storage Umykey lakes system, % 17% Total: 13 .142 10 .396 2 .8093 tanks for use in the process. *Added instead of inorganic dust and other coal ash. JSC Dalur Due to the closed technological cycle, the discharge A sharp reduction in emissions is related to significant Total amount of emissions for 2018 is 2.809 tonnes, of wastewater containing hazardous chemicals and decrease in emissions from the boiler house (carbon which is 10% of the permitted emissions (28.643 tonnes) radionuclides is not performed. oxide, nitrogen dioxide, nitrogen oxide, benzapiren), 38% Emissions of ozone-depleting substances at PJSC since the use of gas was replaced with the utilized heat Discharges of domestic wastewater from the sewerage PIMCU are in insignificant amounts, and their separate from the Energy Centre. GRI 305-6 system are taken out to the treatment facilities of the Suspended substances Calcium accounting is not kept. JSC Dalur and JSC Khiagda do specialized enterprise under the contract. Sulphates BOD not emit ozone-depleting substances. Chlorides Magnesium Other
4.4.2.4. Waste management GRI 306-2
GRI 305-1, 2, 3, 4.4.2.3. Atmospheric Air Protection 5, 6, 7 Tab. 23.All Hazard Class Waste Generation in 2016–2018, tonnes In 2018, the 2-ТП form (air) reports were provided if the volume of authorized pollutant emissions by negative impact facilities (NIF) exceeded 10 tonnes per year or the volumes of authorized pollutant emissions by NIF ranged from 5 to 10 tonnes per year inclusive in the presence of 1 and/or 2 hazard class substances in pollutant emissions into the Year/Hazard class Year PJSC PIMCU JSC Dalur JSC Khiagda atmosphere. Hazard class I 2016 2.769 0.199 0.039 Tab. 20. Pollutant Emissions into the Atmosphere in 2016–2018, PJSC PIMCU, tonnes 2017 2.539 0.174 0.143 2018 3.534 0.105 0.063 Year/Pollutant 2016 2017 2018 Hazard class II 2016 0.031 0.22 0.554 Carbon oxide 1006.318 894.113 306.845 2017 1.111 1.006 0.501 Sulfur dioxide 5248.446 6021.38 4870.216 2018 9.487 1.127 1.166 Nitrogen oxides (in terms of NO2) 1796.751 1666.098 1550.732 Hazard class III 2016 104.79 1.038 2.5 Specific pollutants* 8137.66 8025.72 7033.061 2017 122.42 1.604 5.769 Total* 16,427 .59 17,270 .316 14,588 .58 2018 96.05 1.770 1.865
* Added instead of inorganic dust and other coal ash. Hazard class IV 2016 1547.1 39.452 187.9 2017 1453.1 42.8 480.2 PJSC PIMCU in 2018 noted a decrease in emissions of: * carbon monoxide due to the optimization of coal * inorganic dust due to the improvement of the combustion regimes, the carrying out of routine 2018 1710.6 52.987 491.5 physical and chemical properties of coal supplied to repair and overhaul of CHPP boiler units, the Hazard class V 2016 24,268,198.8 24.927 180.6 introduction of modern analytical equipment to CHPP, and with the observance of indicators of ash 2017 22,509,520.4 17.049 59.9 dust collection; control CO emissions. 2018 15,617,944.4 23.45 69 * sulfur dioxide due to decrease in the sulfur content in Total: 2016 24,287,844 .4 65 .809 371 .57 coal supplied to CHPP; 2017 22,511,099 .54 62 .670 546 .513 2018 15,619,764 .07 79 .439 563 .54 Tab. 21. Pollutant Emissions into the Atmosphere in 2016–2018, JSC Khiagda, tonnes Waste used at the enterprise, located at the facilities in 2016 24,286,078.27 0 249.522 operation, tonnes 2017 4,537,903.29 0 41.883 Year/Pollutant 2016 2017 2018 2018 3,157,595.9 0 94.831 Carbon oxide 19.307 7.394 9.722 Waste transferred to specialized contractors for disposal 2016 8,979.67 27.053 0 Sulfur dioxide 185.155 301.796 302.74 and neutralization, tonnes 2017 17,969,493.01 21.198 352.08 Nitrogen oxides (in terms of NO2) 9.275 8.116 10.662 2018 17,436.529 26.726 328.58 Specific pollutants* 19.893 28.777 22.56 Exceeding the established limits 2016 none none none Others 2.396 2.645 2.714 2017 none none none Total 236 026. 343 639. 348 .40 2018 none none none *Added instead of inorganic dust and other coal ash. * Due to the optimization of waste disposal in 2017, they were transferred to specialized contractors. No excess at negative impact facilities is detected.
72 JSC Atomredmetzoloto Annual Report 2018 73 At PJSC PIMCU: At JSC Dalur, an increase in the IV class waste 4.4.2.6. Community Relation in Environmental Protection GRI 304-3, generation is associated with the inclusion of waste from 102-42 * increase in the hazard class I waste generation The environmental safety of the Holding Company’s * carry out radiation and environmental monitoring of (mercury lamps) by 0.995 tonnes due to replacement residential premises leased to new employees of the organization. enterprises is, in its significance, placed on a par with the the industrial site and the sanitary protection zone; of mercury lamps with LED ones; issues of improving the uranium production efficiency. All waste generated in 2018 were transferred to * replacement of the mercury-containing lamps with * increase in the hazard class II waste generation The priority is to comply with legal requirements for LED lamps; (spent intact lead-in batteries with electrolyte) by specialized organizations for neutralization, use or disposal. environmental protection and radiation safety of the 8.376 tonnes due to the return of the “United Motor population. Fleet” (formerly “ATA”) to PJSC PIMCU and the At JSC Khiagda: irregularity of battery replacement; As part of this, all current annual environmental * reduction of the actual hazard class I waste activities are carried out: * hazard class III waste generation: generation volume by 0.08 tonnes due to the reconstruction of the lighting system for production * development and provision for stable functioning - spent railway sleepers due to repair of railway facilities with the transition to LED lighting sources; of integrated management system in accordance tracks, replacement of used wooden sleepers with with the requirements of ISO 9001:2015 and ISO reinforced concrete ones (12.715 tonness less than * increase in the hazard class II waste generation 14001:2015; in 2017; only 40.955 tonnes); volume is associated with an increase in the - lead plates of used batteries (total in the amount production need for lead batteries; * constant maintenance of the required level of of 9.3 tonnes) associated with the electrical environmental education for environmental safety * decrease in the hazard class III waste generation equipment repair at the JSC OTEK CHPP; decision-makers; volume by 3,904 tonnes is due to the absence of * an increase in the generation of hazard class IV the catalyst formation for vanadium production of wastes due to the formation of pneumatic tire covers sulfuric acid. with a metal cord of spent ones (74.4 tonnes) and molding sand (143.9 tonnes);
* reduction of hazard class V waste generation due to: PJSC PIMCU JSC Dalur - broken reinforced concrete products by 570.8 The company regularly conducts research work Much attention is paid to the issues of the younger GRI 306-3 tonnes related to the decrease in the volume of on drinking water treatment (a complex of wa-ter generation environmental education, particular-ly, as repair work at the JSC OTEK CF; In 2018, there were no abnormal situations treatment facilities at the East-Urulyungui underground part of the annual participation in the Green Spring - formation of overburden rocks in 2018 by water deposits) to improve the quality of drinking water promotion. 6,879,482 tonnes (the volume of overburden and incidents at the Mining Division supplied to the Krasnokamensk population. From April 21 to May 21, 2018, JSC Dalur, together with formation was determined by the Mining enterprises, including significant spills that To maintain the efficiency of CHPP emission treatment students of Peschano-Koledino Sec-ondary School, took Development Plan for 2018). have a negative impact on the environment. and ensure the atmospheric air quality, technical part in the All-Russian Ecological Community Work Day re-equipment of gas cleaning systems is being carried “Green Spring - 2018”. out. As part of the monthly environmental events marathon CHPP flue ash is disposed in the mining industry during under the sign of the All-Russian Ecolog-ical Community GRI 307-1 4.4.2.5. . Environmental protection costs filling operations in order to reduce the class V waste Work Day “Green Spring” the following events were held: disposal on the earth surface and improve the quality of * cleaning from garbage and grass of the territory of the backfill, which ensures safe mining operations. Tab. 24. Environmental Protection Costs of the Holding Company Enterprises in 2018, thousand RUB the enterprise, residential village on the Lesnaya To ensure radiation safety during the radioactive waste street of Uksyanskoe settlement and Peschano- Koledino settlement school lane with a lot of Measures PJSC PIMCU JSC Dalur JSC Khiagda disposal, the Srednee tailing dump re-construction was completed (stage II was completed). participants and attention. Atmospheric air protection 54,721.108 273.51 707.52 * waste paper collection and handing it to a specialized Protection of water resources 59,941.291 653 4,242.76 The construction of the Urtuysky open-pit mine drainage canal, designed for safe mining opera-tions (preventing enterprise for further disposal and use (in the Waste management 36,659.536 151 1,882.88 the mine flooding) and preventing the Urtui stream amount of 750 kg). Land management, protection and rehabilitation 79 051 3747 11,308.41 natural water pollution, has been completed. Also, the company employees together with children and Fee for the negative impact on the environment 14924.00 27.655 233.9 teenagers took part in competitions on environmental topics: Total: 231,182 935. 5603 655. 18,289 .663 * in the video competition on environmental issues - the “Green Spring-2018!” video; Tab. 25. Total Amount of the Holding Company Environmental Protection Costs in 2016-2018, million RUB * in the competition for the best song lyrics about the Year/Costs 2016 2017 2018 “Green Spring” action - the lyrics were written for the ecological “Green Spring!” rap song. Total costs 520.0 411.5 255.0 The Holding Company employees traditionally take an active part in environmental protection measures, preserve valuable natural objects and restore forests. In Krasnokamensk, more than 600 employees of PJSC PIMCU and their family members took part in spring environmental community work days, cleaning the territory and planting greenery. University and college students in Chita and Ulan- Ude annually apply to JSC Khiagda to un-dergo environmental work experience internship.
74 JSC Atomredmetzoloto Annual Report 2018 75 Coverage of the enterprise environmental issues is * May 17 - the “Throw nature a lifebuoy!” action; Occupational safety GRI 403-1, 2 ,3, 4 carried out in the production information publication * from June 5 to August 5 - photo exhibitions on the – the “Vestnik Khiagdy” newspaper, as well as on the Injury rate “My Village” and “My City” topics with the aim of enterprise website. Results of 2018 popularizing the national, spiritual and natural values The JSC Dalur team together with the Uksyanskoe of the native village and city. No accidents investigated in accordance with federal In the reporting year, at the JSC Atomredmetzoloto administration as part of the All-Russian Ecological JSC Dalur is the winner of the “Ecological Culture. Community Work Day “Green Spring” planted about rules and regulations occurred in 2018 at JSC subsidiaries, three industrial accidents occurred, Peace and harmony” project in the category “Eco-logical Atomredmetzoloto facilities. including one fatal accident. 400 pine seedlings; 265 ornamental shrubs were culture in industry and energy”. purchased and planted on the territory of the enterprise, Uksyanskoe and Peschano-Koledino secondary schools; Tab. 27. Fatal Injury Frequency Rate (FIFR) Fig. 26. Injury Rate Dynamics at the JSC Atomredmetzoloto 11 information posters were made for installation in enterprises for 2002–2018, pcs. places of territory con-tamination with garbage; several events and actions were carried out on the improvement 2016 2017 2018 16 and gardening of nearby settlements, production areas 0 0 0.075 and recreation areas: * from April 24 to May 2 – environmental community All accidents occurred in PJSC PIMCU (Krasnokamensk, GRI 403-2 work day “Ecology and We”; Trans-Baikal Territory) were with males.
8 Tab. 28. Lost Time Injury Frequency Rate (LTIFR) Dynamics at the JSC Atomredmetzoloto enterprises in 2016–2018. 5 4 4.4.3. Occupational and industrial safety 2016 2017 2018 3 3 2 Radiation safety Target value 0.6 0.54 0.49 During 2018, at the Holding Company enterprises, the individual effective dose did not exceed 20 mSv in any working Actual value 0.44 0.28 0.22 person. The facts of exceeding the individual dose of 100 mSv in the period from 2013 to 2018 were not recorded. 2002-11 2012-13 2014 2015 2016 2017 2018
Tabl. 26. Average Effective Dose in 2016–2018, mSv The following measures have been taken to ensure safe * Occupational safety cabinets of organizations are working conditions: provided with visual campaigns on injury prevention Average Effective Dose in Average Effective Dose in Average Effective Dose in Enterprise * PJSC PIMCU continued the safety culture and training materials on safe work practices 2016 2017 2018 development project implementation, launched in (using the examples of accidents that occurred in PJSC PIMCU 3.53 3.44 3.38 2012. organizations in the Holding Company). JSC Dalur 1.58 1.50 1.38 * During the year, internal trainers trained 550 * The video addresses of the top officials of JSC JSC Khiagda 1,05 1.08 1.17 workers and 50 line managers. Line managers Atomredmetzoloto and its subsidiaries, The Whole JSC VNIPIpromtechnologii 1.31 1.20 1 conducted 12,533 behavioural safety audits and Truth About Safety, are prepared and broadcast on identified 11,276 potentially dangerous situations. the enterprise territory. The level of the average annual effective dose for personnel In order to improve the radiation situation, the following Over the past four years, the number of detected working in the PJSC PIMCU radiation-hazardous areas activities were implemented: dangerous situations has been reduced four times. (underground mines, leach plant) remained at the same * cleaning and washing away the radioactive dust * New approaches to personnel training have been acceptable level. Events classified as level 2 or higher on from the supply and exhaust ventilation ducts of four introduced, examiner terminal units are installed the INES scale are absent. production buildings; at the departments to monitor the level of worker knowledge in the field of occupational safety, and Results of 2018: * overhaul of raw material bins “Б”, “В” was completed employees are tested for the occupational safety - replacement of the bin sheet lining, revision of the GRI 403-3 Purposeful work was carried out at PJSC PIMCU to improve requirements, safe work methods and techniques. The Company has employees engaged in the radiation situation in the mine workings, particularly: reinforced concrete supporting structure, repair of professional activities with high injuries or * * insulating concrete and wooden lintels (32 pcs.) were protective structures and fences at the junction of As part of the exchange of experience on the high risk of certain disease incidence - these installed at underground Mines No. 1 and No. 8; vibrating screen feeders (VSF), weld rewelding; best practice implementation in the safe work organization, a workshop was conducted on the basis are employees engaged in underground * overhaul of the sorting mechanized crusher SMD- * DV-1000 ventilation doors (2 pcs.) were restored and of PJSC PIMCU on behavioural safety audits. mining commissioned; 111B was completed: replacement of the crusher crushing plates (lining), replacement of fasteners, * according to the individual monitoring results, timely adjustment of the crusher working gap. personnel rotation was carried out in blocks with uranium content above 0.4%. * packaging unit routine repair was performed - cleaning the bin, restoring the airtightness, repairing Tab. 29. Lost Day Rate (LDR)* Tab. 30.Occupational Disease Rate (ODR)** At PJSC PIMCU LP, maintenance of a low level of the ventilation system, repairing the nodes with radionuclide volumetric activity in the air of working replacement of elements, bearings. premises was facilitated by technical work to improve 2015 2016 2017 2018 2015 2016 2017 2018 In the past year, decommissioning and liquidation of nuclear exhaust and supply ventilation: duct dust cleaning (at least 9.85 17.67 27.4 4.12 0.75 0.93 0.56 0.14 3 times a year), replacement of untight ducts, air ducts; and radiation hazardous facilities were not performed at the JSC Atomredmetzoloto operating organizations. * The LDR data are calculated by the formula: Number of days lost due to accidents ** The ODR data are calculated by the formula: Total number of occupational as well as the constant ore mass irrigation; tightening the and occupational diseases/Number of man-hours worked)*200,000. diseases per year/Number of man-hours worked)*200,000. administrative measures, etc. Overall, the LDR and ODR indicators improved in 2018 due to a significant reduction in occupational diseases caused by improved social, living and working conditions.
76 JSC Atomredmetzoloto Annual Report 2018 77 4.5. Human Capital Number of employees by region Tab. 32. Dynamics of the Average Staff Number in the Main Operation Areas in 2016–2018, people
4.5.1. HR Policy Management System Region 2016 2017 2018 Moscow 603 562 519 The primary goal of JSC Atomredmetzoloto HR policy professionalism and responsibility determine its long- Kurgan region 595 619 654 is development of a staff management system aimed term competitiveness. Our Company, for its part, seeks Irkutsk region 39 2 1 at improving the efficiency of the Holding Company, to provide favorable conditions for the successful work whose key assets are people working for the Company; of employees, their professional growth and creative Trans-Baikal Territory 5,747 4,996 5,563 We understand the employee engagement in the activity and guarantees the social orientation of our HR Republic of Buryatia 290 478 495 implementation of the corporate strategy, their policy. Total: 7,275 6,657 7,232
Number of employees by category GRI 405-1 4.5.2. HR Policy Management Performance Tab. 33. Staff Average Number Dynamics by Category in 2016–2018, people
4.5.2.1. Human Capital Features Category 2016 2017 2018 Number of employees Managers 997 981 1,009 Specialists 1,426 1,283 1,293 Tab. 31. Dynamics of the Holding Company Average Staff Number in 2016–2018, people Office staff 31 37 42 JSC Operational staff 4,821 4,356 4,888 JSC VNII- LLC Atom- JSC JSC JSC PJSC PIMCU promtech- ARMZ Total Total: 7,275 6,657 7,232 redmet- Dalur Khiagda RUSBURMASH nologii Service Due to the transfer in October 2017 of more than 1,000 employees of working professions from JSC zoloto Alliancetransatom to PJSC PIMCU, the share of workers in the Holding Company total average staff number increased 2018 160 5,258 457 548 214 489 106 7,232 from 65.4% (2017) to 67.6% (2018). 2017 151 4,720 448 527 272 440 99 6,657 2016 149 5,137 443 496 352 597 100 7,275 Number of employees by employment type
In the staff distribution by employment type, the share of employees working under a fixed-term employment contract increased from 5.3% (2017) to 5.6% (2018), most of which (75%) accounted for JSC RUSBURMASH. Some increase in the staff number in 2018 is associated result of organizational measures taken at the end of with the development of new businesses by the Holding 2017, aimed at increasing the institute productivity and The share of part-time employees in the total staff number at the end of the reporting period halved from 1.2% (2017) Company. reducing the cost of engineering services. to 0.6% (2018) due to changes in JSC VNIPIpromtechnologii. The main changes in the average number of personnel occurred in the reporting year at the following Tab. 34. Staff Distribution by Employment Type in 2016-2018, people enterprises: * in JSC Atomredmetzoloto (+9 people) due to the The dynamics of changes in the number Staff distribution by employment contract and employment type 2016 2017 2018 staffing of vacant posts and the transfer of LLC UUP, of employees in the operation areas is Staff number at the end of the reporting period 6,957 7,347 7,396 which is in the process of liquidation, functions to it; characterized by its increase in the Trans- Working under an employment contract concluded for indefinite period 6,690 6,957 7,352 Baikal Territory (+567 people) * in PJSC PIMCU (+537 people) due to the transfer Working under a fixed-term employment contract 267 390 412 of 1,109 people from JSC Alliancetransatom from Part-time workers 51 89 44 01.10.2017; PJSC PIMCU (+537 people) * in JSC Khiagda (+21 persons) due to commencement JSC RUSBURMASH (+20 people) of work at the new deposit production facilities; JSC VNIPIpromtechnologii (+6 people) * in JSC Dalur (+9 people) due to creation of JSC Khiagda (+3 people) production facility for associated scandium production on the enterprise industrial site (as part of the “Scandium” project); * Due to the reduction in the number of JSC * in JSC RUSBURMASH (+49 people) due to increase in VNIPIpromtechnologii employees, the number of the drilling and geological exploration volumes at the employees in Moscow decreased by 43 people, and Holding Company mining enterprises and formation the number of employees in the Republic of Buryatia of a construction site for JSC Khiagda; increased by 17 people due to new jobs in JSC * in LLC ARMZ Service (+7 people) due to a change Khiagda. in the organizational structure caused by the new * Fluctuations in the number of employees in other business area development. operation areas are due to its change in JSC At the same time, in the JSC VNIPIpromtechnologii RUSBURMASH (Kurgan Region (+25 people), Irkutsk the number of employees decreased by 58 people as a Region (-1 people)).
78 JSC Atomredmetzoloto Annual Report 2018 79 Staff age and gender composition Tab. 38. Staff Turnover by Gender in 2016–2018, people, % Tab. 35. Staff Distribution by Gender in 2016-2018, people Staff turnover by gender 2016 2017 2018 Staff distribution by gender 2016 2017 2018 Male Male Number of dismissed for any reason, people 1,045 1,023 981 Amount 4,878 5,472 5,538 % of total average staff number 15.0% 13.9% 13.3% % of the total amount 70.1% 74.5% 74.9% Female Female Number of dismissed for any reason, people 531 428 276 Amount 2,079 1,875 1,858 % of total average staff number 7.6% 5.8% 3.7% % of the total amount 29.9% 25.5% 25.1% Tab. 39. Number of Dismissed Employees by Operation Areas in 2016–2018, people Tab. 36. Holding Company Staff Distribution by Age in 2015–2017, people 2016 2017 2018 Staff distribution by age 2016 2017 2018 Moscow 184 203 128 Up to 35 years Kurgan region 79 92 170 Amount 2,615 2,480 2,333 Irkutsk region 50 73 1 % of the total amount 37.6% 33.8% 31.5% Trans-Baikal Territory 1,172 985 782 36 years to 50 years Republic of Buryatia 91 98 176 Amount 2,688 1,970 3,179 Total: 1,576 1,451 1,257 % of the total amount 38.6% 40.4% 43.0% Over 50 years old Amount 1,654 1,897 1,884 4.5.2.2. Remuneration System % of the total amount 23.8% 25.8% 25.5%
In the face of declining uranium prices and production The remuneration of employees is based on GRI 405-2 volumes at PJSC PIMCU, as well as staff growth in 2017- the Unified Harmonized Remuneration System 2018, due to the transfer from 01.10.2017 to PJSC in the ROSATOM organizations (UHRS), which GRI 401-1 Staff turnover PIMCU from JSC Alliancetransatom of 1,110 people, provides a unified approach to the formation the share of labour costs in the total revenue increased of wages in the Holding Company and a The overall increase in the number of employees led to At the same time, in JSC Khiagda and from 30.4% (2016) to 38.5% (2018), particularly due stable income of employees regardless of the a decrease in the Holding Company staff turnover from to that the constant (guaranteed) part of the employee JSC RUSBURMASH the total staff turnover level 21.8% (2017) to 17.5% (2018). remuneration is more than 75%. employee gender, nationality, religion, age or increased compared with 2017 and amounted to 20.6% being a minority and 69.2%, respectively.
GRI 402-1 Compliance with the current labour legislation of the Russian Federation in the field of labour relations is one of the JSC Atomredmetzoloto key priorities in the field of personnel management. In accordance with the current labour legislation of the Russian Federation, employees shall receive notifications about a significant change in working conditions at least Fig. 27. Labour Costs Share in Revenue in 2016–2018, Fig. 28. Structure of Expenses Associated with Wages 2 months before the event. No violations of the labour legislation regarding meeting the staff million RUB in 2016-2018, % notification deadlines for the reporting period have been identified. 25 000 100% 30.4% 59.9 60.1 60.5 20 000 80% Tab. 37. Staff Turnover in 2016–2018%, people 6,737 38.5% 15 000 36.2% 7,128 60% 69.6% 6,435 2016 2017 2018 15,443 10 000 40% JSC Atomredmetzoloto 20.2 8.6 15.0 63,8% 61.5% 10.0 9.9 9.9 11,324 11,368 7.2 7.0 6.2 PJSC PIMCU 18.5 18.1 12.7 5 000 20% 0.2 0.1 0.1 JSC Khiagda 14.3 16.9 20.6 22.8 22.9 23.3 0 0% JSC Dalur 12.0 9.4 6.8 2016 2017 2018 2016 2017 2018
JSC RUSBURMASH 58.0 63.7 69.2 Payroll costs, %, million RUB Payroll budget JSC VNIPIpromtechnologii 27.5 54.7 28.9 Other costs in total revenue, %, million RUB Accrual of vacation provision LLC ARMZ Service 28.9 25.2 18.9 Accrual of annual bonus provision Total: 21 .7 21 .8 17 .5 Remuneration of persons working under independent contractor agreement Taxes (insurance premiums) on wages
80 JSC Atomredmetzoloto Annual Report 2018 81 GRI 201-1 Tab. 40. Labour Remuneration and Insurance Premiums in 2016-2018, thousand RUB ARMZSkills I place was taken by the Mining Division team in the “Engineering Design” Indicator 2016 2017 2018 In May 2018, the 2nd divisional professional skills competition ARMZSkills was organized and held competence onAtomSkills 2018 Payroll, total 5,204,010 4,959,312 5,468,355 according to the WorldSkills methodology in following including: categories: “Chemistry lab technician”, “Welding Person of the Year Payroll 4,034,232 3,865,782 4,313,640 technologies”, “Dosimetrist”, “Special vehicle accrual of vacation provision 671,341 638,767 704,442 driver”, “Occupational safety”, “Network and system Traditionally, the Holding Company employees took administration”, “Engineering design”. The competition part in the annual programme of industry nominations accrual of annual bonus provision 483,894 447,602 442,395 was attended by 85 employees and experts of the “ROSATOM’s Person of the Year 2018”, the purpose remuneration of persons working under independent contractor 14,542 7,161 7,878 Holding Company enterprises. (PJSC PIMCU, JSC of which is to recognize the achievements of the best agreement Khiagda, JSC Dalur, JSC VNIPIpromtechnologii, JSC workers in the industry at the highest level of the Labour costs and insurance premiums, thousand RUB 1,534,339 1,475,251 1,659,702 RUSBURMASH, LLC ARMZ Service). In the team rating, ROSATOM management. the 1st place was taken by the team from PJSC PIMCU. The structure of expenses related to wages remained increased by 0.4%, while the share of reserve accrual on For more information about the programme almost unchanged and maintained the proportions KPI decreased by 0.8%. In addition, in the structure of AtomSkills results, see http://www.armz.ru/press-tsentr/ of 2017. At the same time, due to the growth in the expenses related to wages, the share of taxes (insurance novosti/2072-chelovek-goda-rosatoma-2018-pobeda-s-nami number of employees of PJSC PIMCU, without the right premiums) increased by 0.4%. The divisional competition has traditionally became the to be payed an annual premium on KPI, the payroll share qualifying for the formation of the team, which in July Personnel reserve took part in the ROSATOM III industry championship of professional skills — AtomSkills 2018 in Yekaterinburg. Implementation of development programmes for The Mining Division team took the first place in the managerial personnel reserve “ROSATOM’s Assets”, GRI 102-36 “Engineering Design” competence. “Assets. Basic level”, “ROSATOM’s Capital” and Average monthly salary of employees “ROSATOM’s Talents”, as well as conducting new Tab. 41. Average Monthly Salary in 2016–2018, RUB WorldSkills Hi-Tech qualifying events in order to create a reserve of high- potential senior, middle and junior managers to prepare Changes in 2018 in % for work in key positions and projects. 2016 2017 2018 The AtomSkills-2018 winners became members of compared to 2017 the main ROSATOM combined team to participate in PJSC PIMCU 45,316 48,393 49,661 102.6% the National Championship of the through working professions of high-tech industries WorldSkills Hi-Tech JSC Khiagda 60,919 63,202 64,370 101.8% 2018, where they subsequently took the first place. JSC Dalur 40,832 43,309 44,563 102.9% JSC RUSBURMASH 70 688 65 799 69 153 105.1% JSC VNIPIpromtechnologii 112,672 118,235 120,186 101.7% Tab. 42. Number of Training Hours per Person in breakdown by the Holding Company Enterprises, hour/person GRI 404-1
The minimum base salary (the amount that includes the salary set for the employee, the integrated incentive premium Category 2016 2017 2018 and the monthly indexing payment) at all the Holding Company enterprises exceeded the subsistence minimum for the working-age population established in the operation areas. JSC Atomredmetzoloto 14.32 22.8 23 PJSC PIMCU 24.86 15.91 46.64 JSC VNIPIpromtechnologii 29.47 19.25 91.5 Managers JSC Dalur 67 93.8 47.8 JSC RUSBURMASH 95 18.66 62.53 (GRI 404-1, 2, 3) 4.5.3. Personnel Professional Development JSC Khiagda 76.3 55,8 41.2 JSC Atomredmetzoloto 18.5 19.75 32.48 Results of 2018 PJSC PIMCU 38.02 31.3 39.29 JSC VNIPIpromtechnologii 33.76 29.79 62.96 GRI 404-3 * 12 employees of the Holding Company enterprises Specialists, workers Over the period of 2018, 100% of the JSC JSC Dalur 40.1 93.1 81.5 successfully passed the certification in ANO ROSATOM Corporate Academy for the right to Atomredmetzoloto employees passed a JSC RUSBURMASH 60 86.17 51.01 conduct the training. Later they trained 835 people performance assessment, which is done by JSC Khiagda 64.3 39.6 31.6 under the RPS programmes and 49 people under the setting KPIs to employees and evaluating Performance Management programme. their achievement. The increase in the number of training hours is due to the increase in the number of completed distance learning programmes, training of employees in modular development programmes (“ROSATOM’s new products. Business * On the basis of PJSC PIMCU training centre, course workshop”, development programmes for managerial personnel reserve, etc.). training in the following professions was organized explosive preparation”, “Equipment maintenance and and conducted: “Stope miner”, “Timberman”, repair wireman”, “Track serviceman”, “Lift (tower) “Fire prevention and extinction mine worker”, “Lift cradle worker“, “Trip maker”, “Lifting equipment (tower) operator”, “Pumping unit operator”, “Shot maintenance and repair electrician”, etc. Total firer in gas and dust-free mines”, “Operator of a trained - 1 782 people. stationary modular complex for the granulated
82 JSC Atomredmetzoloto Annual Report 2018 83 Events attended by the Youth Board representatives: Literary Club 4.6. Social Capital * conference dedicated to the 120th anniversary of E.P. Slavsky; In 2017, the Literary Club began to work at ARMZ as a venue where everyone can become GRI 3.4.4 4.6.1. Social Investment Management * the industry historical marathon “Be like Slavsky”, a speaker, a place for sharing knowledge and bringing together participants from 55 industry developing public speaking skills. As part of the organizations; Literary Club work, presentations of the book The strategic goals facing the Mining Division are aimed Youth Boards * 2nd industry meeting of change leaders; “Creation and Development of the Domestic at building partnership in the operation areas. We In order to implement the state youth policy understand that the achievement of social harmony in * divisional debates on the topic “Are Leaders Born or Nuclear Industry Mineral and Raw Material the operation areas is possible only under the conditions aimed at the professional development of Made?”, etc. Base”, monograph “Uranium Geotechnology” of social and environmental acceptability. The JSC young professionals, the development of their and others took place. Atomredmetzoloto reputation as the largest reliable creative potential and corporate culture, youth supplier of uranium and a socially responsible company organizations created youth boards, bringing Mining School “What? Where? When?” directly depends on the level of social tension and together over 200 young employees up to the economic stability in the operation areas. age of 35 inclusive. As part of the Youth Board In July, the 7th youth scientific and practical forum In September, the final game of the divisional “Mining School”, the leading communication and season of “What? Where? When?” was held See details in Section 3.2. Risk Management of the Report. at the divisional level, the Holding Company has formed a Change Support Team, which educational project for young employees in the mining among the seven teams of the Holding ARMZ has developed the following areas of social implements the “Year of Values in the Mining sector of Russia, was held in the children’s recreation Company organizations (JSC Atomredmetzoloto, investment: camp “Energetik” (Chita, Trans-Baikal Territory) with Division” project. JSC PIMCU, JSC Khiagda, JSC Dalur, JSC * internal social investments are aimed at creating PJSC PIMCU as one of the organizers. For four days, RUSBURMASH, JSC VNIPIpromtechnologii comfortable conditions for work and rest and approximately 300 young miners competed for the title and LLC ARMZ Service) dedicated to the 50th of the best, representing 18 teams of leading mining ensuring social protection of employees, developing anniversary of PJSC PIMCU. The winner of the companies in the country: JSC SUEK, JSC MCC EuroChem, their creative potential and corporate culture, game was the team of JSC Khiagda, which for LLC GRK Bystrinskoe (PJSC MMC Norilsk Nickel), JSC motivating a healthy lifestyle, supporting employees the second time in a row won the main prize - of pre-retirement age and non-working pensioners, Stoilensky Mining and Beneficiation Plant (PJSC NLMK). partnership development, interaction with municipal implementing the state youth policy; The team of PJSC PIMCU with the bright name “URA!N”, Golden Owl. and regional authorities and the formation of social consisting of 15 Union employees and participating in the * external social investments are aimed at improving harmony in the ARMZ Uranium Holding Co. operation forum for the first time, took the sixth place. the efficiency of social programmes and the social areas. League of KVN 4.6.1.1. Internal Social Investments Young Specialist School In November, the third season of the KVN League among In 2018, in the JSC VNIPIpromtechnologii, for the Company’s divisions started in PJSC PIMCU, 6 teams Work with youth and students the development of young specialists and with took part in it. The combined team of the first League best players vividly presented the Mining Division in the the aim of transferring critical knowledge, The attraction, support and retention of talented VI industry KVN game, where the team of PJSC PIMCU young people, the creation of conditions for the the “Young Specialist School” project was took second place. active participation of young people in innovation, successfully launched and is being implemented the development and improvement of the social and under the guidance of full member of the Jumanji psychological adaptation system for young employees Academy of Mining Sciences, full member of are the priority areas of the Holding Company’s HR the Russian Academy of Natural Sciences, In June, 20 teams representing PJSC PIMCU and policy. Honored Geologist of the Russian Federation, Krasnokamensk organizations took part in the Jumanji Dr.Sci. (Geo.-Min.), Professor Evgeny Nikolaevich intellectual quest dedicated to the Union’s 50th Plans for 2019: Youth Boards Kamnev. As part of the project, six meetings anniversary. The game was organized by Palace of were held to cover more than 50 young Culture “Dauria” together with the city portal “Chita It is planned to hold the first divisional meeting of youth, The Youth Board activity is divided into key areas of the professionals, at which eminent institute now” and the “World of kvest” company and consisted as well as the participation of the management company industry: and the Holding Company enterprise youth movement employees and invited participants, particularly in the team performance of intellectual tasks that had * corporate culture; representatives in industry events: II Youth Congress of from the Holding Company’s management to be solved while passing through three mysterious rooms. The keys were found by those who quickly read ROSATOM; 3rd Industry Meeting of Change Leaders; 2nd * digitalization; company, made presentations. the mysterious signs, unraveled puzzles, collected Industry Conference of Young Scientists; Youth Day at * construction; crystals and were able to negotiate with the spirits. Atomexpo 2019. * science; The PJSC PIMCU team in a bitter struggle lost to the Krasnokamensk team and took the second prize. Implementation of children’s programmes * new businesses; NUCKIDS-2018 * nuclear city development; Smart Boys and Girls The Holding Company supported the production of the * safety. In September, members on the combined teams “Lomonosov Scroll” musical prepared by the participants of JSC Khiagda, JSC RUSBURMASH and JSC of the ROSATOM international children’s creative project VNIPIpromtechnologii took part in the intellectual Nuclear Kids. In 2018, for the first time, children whose game “Smart Boys and Girls” dedicated to the Nuclear parents work at JSC Dalur participated in the selection. Industry Employee Day. The game was held in the Oksana Bezzubkova (15 years) from with Uksyanskoe In-situ Leaching Shop rotation camp (Bauntovsky-Evenki (Kurgan region) reached the final and took part in the District, Republic of Buryatia), and the winner was the project. team of JSC Khiagda.
84 JSC Atomredmetzoloto Annual Report 2018 85 ROSATOM’s Schoolchild of different ages, who ended the school year with Tab. 45. Dynamics of Expenses for the Trade Union Organization Upkeep in 2016–2018, million RUB, % excellent scores. The industry programme “ROSATOM’s Schoolchild” continues to evolve. In 2018, the programme anthem In the JSC “Khiagda” for the successful completion of 2016 2017 2018 appeared, which was first performed by the children of the school year, 22 children were awarded with valuable Costs allocated to the accounts of trade union organizations to conduct 11,280.7 9,358.0 13,143.7 the Holding Company employees in Zaryadye Park. gifts - pupils in classes 2-10. health and fitness and cultural events On the first day of summer, in the city of As part of the “ROSATOM’ Schoolchild” programme Primary trade union organization (PTUO) upkeep costs 1,851.8 3,281.0 1,312.7 Krasnokamensk, a solemn award ceremony was held for implementation in May, JSC Dalur organized and Share of costs for the PTUO upkeep in the total organization costs 14.1% 26.0% 9.1% the winners of the industry competition “ROSATOM’s conducted a thematic tour of the enterprise “The main allocated to the PTUO accounts Schoolchild: Collect a Bag of “Excellent” Scores” A Bag of stages of uranium production” for pupils in classes 1-11 “Excellent” Scores was gathered by 114 schoolchildren of Uksyansk secondary school. At the same time, other expenses for holding mass cultural and health and fitness events increased in 2018 ARMZ Spartakiad Tab. 43. Number of Registered Non-Working Pensioners in 2016–2018, people by 40% compared to the actual value of 2017, and the share of expenses for the trade union organization On September 15, 2018, the 6th ARMZ upkeep (wages, stationery, office equipment, vehicles, Spartakiad was held in Serebryany Bor in 2016 2017 2018 cleaning, communications, etc.) decreased 2.5 times. Moscow. Team members competed in 8 sports, Total 2,998 2,456* 2,390 among which especially spectacular were the of which Sports events football, volleyball, arm wrestling and rope Honored Pensioners of the Nuclear Industry 1,183 1,098* 1,040 pulling championships. One of the top priorities in the Holding Company Honorary Pensioners of the Nuclear Industry 1,815 543* 514 social policy is the promotion of a healthy lifestyle and In the team rating won the team of JSC *Due to the counting procedure refinement/adjustment, the data for 2017 has been clarified. the involvement of employees in systematic physical VNIPIpromtechnologii, which prevailed over the exercises and sports. team of PJSC PIMCU that won first place for four years in a row. The third place was taken by In 2018, on the basis of the Krasnokamensk sports GRI 201-3 Support for veterans and pensioners Trade unions and collective agreements the combined team of JSC RUSBURMASH. complex Argun, PJSC PIMCU held the following GRI 102-41 In 2018, 15.9 million RUB were spent to support non- Currently, the Holding Company has three collective significant mass health and fitness events: working pensioners, including 15.2 million RUB for agreements (PJSC PIMCU, * open futsal tournament in memory of Vladimir regular pension supplements and 0.7 million RUB to Georgievich Gazzaev, Honored Worker of Physical JSC VNIPIpromtekhnologii, JSC Dalur) and two trade provide material assistance and partial compensation Culture of the RSFSR, with the participation of five * paintball championship with 10 teams of the union organizations (PJSC PIMCU, for the cost of vouchers to health resort institutions. teams; Company. JSC VNIPIpromtekhnologii). In JSC Dalur, the employee In March, the best fishermen of JSC Khiagda competed At the same time, the share of expenditures on * Spartakiad between the Company structural interests are represented by the Work Collective Council, in the sport ice-fishing “Northern Hole - Bount support of non-working pensioners in the total social divisions, dedicated to the Nuclear Industry Employee which takes an active part in the interaction with the 2018” and took the 1st place among the teams of expenditures (SE) decreased from 9.3% (2017) to Day, in which 70 employees took part; employer. administration, enterprises and indigenous people of the 7.5% (2018) due to a decrease in the number of non- * traditional volleyball tournament for the cup of the Bauntovsky Evenki district of the Republic of Buryatia. working pensioners registered in the Holding Company The share of the trade union organization members in first Director of the Priargunsky Industrial Mining and organizations. the total list of the Holding Company employees as of In May, employees of JSC Khiagda organized and held Chemical Union Stal Pokrovsky with the participation December 31, 2017 was more than 34%. a sports festival “School Sports Day” for pupils of the The main reason for the decline in the number of non- of four teams; Municipal Budgetary General Education Institution working pensioners is the deregistration of PJSC PIMCU * traditional family holiday “Father, mother and I are Vitimsky Secondary School in the village of Romanovka, pensioners due to their departure from Krasnokamensk a sports family” with the participation of 11 teams Bauntovsky Evenki District, in which more than 50 to other regions of Russia. of PJSC PIMCU divisions and subsidiaries, as well as schoolchildren took part. family members of employees (more than 70 people took part); Tab. 44. Number of Employees Covered by Collective Agreements and Being Trade Union Members in 2016-2018, people 4.6.1.2. . Internal Social Investment Management Performance 2016 2017 2018 Number of employees covered by collective agreements 5,651 6,040 6,004 In 2018, 212.7 million RUB were spent on the * health resort treatment and rehabilitation; Number of trade union organizations in the Holding Company 3 3 3 implementation of social measures and commitments. * assistance in improving housing conditions; Number of trade union organization members 3,748 3,357 2,527 Corporate social programmes are developed in the * holding sports and cultural events, etc.; following areas: * voluntary health insurance of employees; * non-state pension provision. GRI 403-4 In all the Holding Company collective agreements, union organizations for health and fitness and cultural sections are provided that regulate occupational events envisaged by the trade union statutory activities * voluntary insurance of employees against accidents safety and health issues. In the reporting year, the increased to 13.1 million RUB. and diseases; costs allocated by enterprises to the accounts of trade
86 JSC Atomredmetzoloto Annual Report 2018 87 Non-state pension provision Fig. 30. SE Dynamics per One Employee 2016–2018, thousand RUB
Non-state pension programmes are implemented in PJSC PIMCU and JSC Dalur through JSC Non-State Pension Fund 28.0 Atomgarant (NPF). LLC ARMZ Service 26.2 2018 Tab. 46. Types of Non-State Pension Programmes 27.3 2017 2016 Pension programme No. 1 Employee participation in the programme of state co-financing of pension savings. At the same 7.2 time, the ROSATOM and the ROSATOM organizations conclude an agreement with the NPF, in JSC VNIPIpromtechnologii 6.6 which they open a personal retirement account to the employee participating in this pension scheme, which is proportional to the employee’s contributions. 10.5 Pension programme No. 2 Participation of a ROSATOM employee and/or organization in agreed shares in the process of 37.8 forming an additional employee pension in the NPF. JSC RUSBURMASH 35.5 Employees in shares agreed with these organizations participate in the formation of their pension savings, directing 17.2 contributions from wages to NPFs. As part of the pension programme No. 1, the employee and the organization contributions are the same. As part of the pension programme No. 2, the amount of the employee and the 32.0 organization contributions, as well as the schemes for calculating pension contributions are different. JSC Dalur 34.0 Participation in NSPP programmes PJSC PIMCU JSC Dalur 36.3 Number of employees - NSPP programme participants according to scheme No. 1 33 7 46.9 Amount of pension contributions transferred by the organization to the NPFs to the 257.85 75.6 JSC Khiagda 46.4 personal retirement accounts of employees - participants of the programme No. 1, thousand RUB 48.1 including organization contributions 128.925 37.8 25.9 including employee contributions 128.925 37.8 PJSC PIMCU 22.7 Number of employees - NSPP programme participants according to scheme No. 2 473 209 20.9 Amount of pension contributions transferred by the organization to the NPFs to the 12,972.7 2,507.51 personal retirement accounts of employees - participants of the programme No. 2, 0.0 10.0 20.0 30.0 40.0 50.0 60.0 thousand RUB Number of retiring employees for whom the organization makes additional payments 54 0 Engagement (other than contributions) to the NPF The amount of additional payments (other than contributions) transferred by the 34,973.35 0 In 2018, the Holding Company enterprises took part in obtained at the enterprises, plans of measures were organization to NPFs for retiring employees, thousand RUB the annual study of the engagement rate “Your opinion developed to increase the employee engagement rate. including the amount of lump-sum payments transferred to NPFs for retiring 5,942.5 0 is important to ROSATOM”. Following the results employees, thousand RUB Tab. 47. Engagement Rate Dynamics in 2016-2018, % Social expenses of hot meals to shift personnel of JSC Khiagda and JSC RUSBURMASH increased from 7.4% to 9.8%. At 2016 2017 2018 In the SE structure, the share of voluntary medical the same time, there was a decrease in the share of JSC Atomredmetzoloto 85 83 80 insurance of employees increased from 18.2% (2017) expenditures on the trade union organization upkeep PJSC PIMCU 54 59 66 to 19.2% (2018), the cost of sports and cultural events from 3.1% to 0.6%. increased from 7.2% to 9.1% and the cost of provision JSC Khiagda - 58 68 JSC Dalur - - 50 Employee voluntary health insurance 8,242.1 Division total: 62 66 68 4% 20,755.8 31,894.1 Voluntary insurance of employees against accidents and 15% GRI 201-3 10% diseases Sanatorium treatment and rehabilitation Nowadays, the conduct of the research “Your opinion Results of 2018: 19,377.5 is important for ROSATOM”, aimed at identifying the 1,312.7 Support for non-working pensioners 9% 0% employee engagement rate, is relevant for all major • increased public loyalty index regarding the nuclear Assistance in improvement of housing conditions industrial enterprises of the Holding Company, since the energy acceptability in Russia and abroad; effectiveness of the set business goals directly depends Non-state pension provision • new cooperation agreements were concluded in the Fig. 29. Structure of Social 40,925.2 on the engagement of these enterprise employees. operation areas; Expenses in 2018, % 19% Costs of sporting and cultural events In 2018, it was decided to include in the research JSC Catering Dalur, a dynamically developing production company of • work with federal authorities and public the Mining Division, and to exclude JSC RUSBURMASH, organizations is continued; 50,787.0 Employee welfare assistance the service company of the Mining Division, where the • a number of charitable projects were implemented 24% 3,703.2 engagement rate in 2018 reached a 75% performance Payment of travel to the place of rest, treatment, to the in the field of education and social infrastructure 2% assembly point for departure to the place of rotational zone. At the same time, activities aimed at increasing 1,326.2 support in the operation areas; 1% shiftwork the JSC RUSBURMASH employee engagement rate will 18,417.1 15,938.9 be held in the future. • a V grant competition was held to support social 9% 7% Costs of the functioning of trade union organizations projects in • Krasnokamensk, Trans-Baikal Territory. Specific expenses on social payments in the Holding Company as a whole increased from 26.5 thousand RUB per one employee in 2017 to 29 thousand RUB in 2018.
88 JSC Atomredmetzoloto Annual Report 2018 89 GRI 201-1, 4.6.1.3. External Social Investments. Contribution to the Development of Operation Areas Financial support received from public authorities GRI 201-4 102-42 We are guided by the principles of sustainable We share and support the sustainable development Tab. 49. Subsidies Received by PJSC PIMCU in 2016–2018., million RUB. development and strive for economic efficiency, a goals set forth in the Sustainable Development Agenda balance of public interests and natural-ecological up to 2030, understanding that our business plays an potential. We understand that infrastructure important role and makes a significant contribution Name 2016 2017 2018 investments are an important aspect of our corporate to the society well-being. We take into account the Subsidy of the Ministry of Education, Science and Youth Policy of the Trans-Baikal Territory 11.96* 5.45 3.22 social responsibility, since the Holding Company possible social and economic consequences of the made for reimbursement of the costs of organizing and providing recreation and health for children, enterprises are located in different regions of the decisions and maintain a dialogue with all interested according to the decree of the Government of the Trans-Baikal Territory Russian Federation – the Kurgan Region, the Republic of parties through the provision of public reporting and the Subsidy from the federal budget for reimbursement of expenses for radioactive waste - 80.00 103.00 Buryatia, and the Trans-Baikal Territory. implementation of social programmes. management Subsidy from the federal budget for the Mine No. 6 infrastructure construction - - 959.00 Subsidy from the federal budget for the R&D - 30.00 70.00
* In 2016, subsidies were received according to the Report on the Targeted Use of Subsidies for 2016 in the amount of 6.43 million RUB and the debt of the Ministry of Education, Impact on the local population in the operation areas Science and Youth Policy of the Trans-Baikal Territory on subsidies for 2015 in the amount of 5.53 million RUB was repaid
We are convinced that an important part of the ARMZ Uranium Holding Co. strategic goal implementation is Tab. 50. Regional Tax Concessions Received by PJSC PIMCU in 2016–2018, million RUB the development of the operation areas. Considering the geography of activity, we see one of our main tasks in maintaining stable jobs, strengthening a positive image and public confidence. Name 2016 2017 2018 Property tax for the power transmission lines, as well as facilities that are an integral 6.22 6.06 5.96 GRI 201-1 Tab. 48. Tax Payment of ARMZ Uranium Holding Co. Key Enterprises to Regional and Local Budgets in 2016–2018, million RUB technological part of these facilities
ARMZ 2016 2017 2018 Tab. 51. Regional Tax Concessions Received by JSC Khiagda in 2016–2018, million RUB Regional and local Uranium budgets Holding Co. Company CGT Company CGT Company CGT Name 2016 2017 2018 Enterprises Property tax for the implementation of the investment project in accordance with the Law 47.26 200.28 239.26 Total, including 145 45 158 81 141 129 of the Republic of Buryatia No. 868-IV dated 08.05.2009 “On State Support of Investment Kurgan region JSC Dalur 136 43 146 67 128 100 Activities in the Republic of Buryatia” JSC RUSBURMASH 9 2 11 14 13 29 Total, including 196 115 230 245 232 375 Tab. 52. Regional Tax Concessions Received by JSC Dalur in 2016–2018, million RUB Republic of Buryatia JSC Khiagda 184 112 221 232 222 350 JSC RUSBURMASH 12 3 8 13 10 25 2016 2017 2018 Total, including 785 618 713 728 795 1,112 Property tax for the implementation of an investment project in the territories included in the 11.38 19.74 0 consolidated register of investment sites in the Kurgan region PJSC PIMCU 736 580 675 687 757 1,055 Property tax for the power transmission lines, as well as facilities that are an integral 0.61 4.00 0.20 JSC RUSBURMASH 20 6 13 15 13 21 technological part of these facilities Trans-Baikal Territory JSC Khiagda 25 30 25 25 24 34 Income tax established for organizations making capital investments in a certain amount 35.04 15.59 11.70 JSC VNIPIprom- 4 2 1 1 1 2 technologii Transport tax for the implementation of an investment project in the territories included in the 0 0.03 0 consolidated register of investment sites in the Kurgan region Total, including 5 7 1 - - - Irkutsk region Property tax for the volume of investments in the purchase of fixed assets (in excess of the 0 0 6.60 JSC RUSBURMASH 5 7 1 - - - amount of exempted movable property) Total, including - 1 - - - - Amurregion JSC RUSBURMASH and JSC VNIPIpromtechnologii did not receive state financial support in 2016-2018. JSC RUSBURMASH - 1 - - - - Total, including - - - 1 1 - Arkhangelsk region JSC RUSBURMASH - - - 1 - - Total, including 2 3 - - - - Republic of Sakha (Yakutia) GRI 202-1 JSC RUSBURMASH 2 3 - - - - The minimum wages in the operation areas
Total: 1,133 788 1,102 1,057 1,169 1,616 The minimum wage (including regional coefficients and northern allowances) at all enterprises of the Holding Company 1,921 2,159 2,784 exceeds the subsistence minimum for the working-age population established in operation areas.
90 JSC Atomredmetzoloto Annual Report 2018 91 Tab. 53. The ratio of the Subsistence Minimum for the Working-age Population in the Operation Area to the Initial Wage, RUB* Major social projects 2018 is the year of volunteer implemented at the Region 2016 2017 2018 Company’s expense in Russia Minimum base wage (including RC and NA) at the Holding Company’s enterprises in the operation areas and the subsistence minimum for the “The things you are doing has no boundaries, working-age population established in the operation areas (IV quarter) * Competition of charitable and social projects in neither demographic, nor territorial, nor Moscow 17,487 18,453 18,500 Krasnokamensk, including the celebration of the Social Entrepreneur Day: political. You build your fate and the fate of your JSC RUSBURMASH 45,000 45,000 45,621 country!” JSC VNIPIpromtechnologii 25,000 35,800 25,000 - for social entrepreneurs operating in the territory Sergei Kiriyenko, First Deputy Head of the Kurgan region 9,864 10,371 10,445 of the urban settlement “Krasnokamensk City” - grants up to 150 thousand RUB; Presidential Administration, Chairman of the JSC Dalur 10,500 10,500 10,500 - for NPO - grants of 200 thousand RUB each. Organizing Committee for the Year of the JSC RUSBURMASH 11,007 11,007 11,439 - for PJSC PIMCU volunteers - grants of 50 thousand Volunteer Irkutsk region 10,450 10,450 10,528 RUB each. JSC RUSBURMASH 38,254 38,254 73,827 * Publication of sets of books “Atlas of the Illustration Trans-Baikal Territory 11,023 11,254 11,691 Perception” for distribution in children’s specialized PJSC PIMCU 12,600 12,600 12,600 institutions of Krasnokamensk (Trans-Baikal Volunteer initiatives proposed by JSC Territory) and Dalmatovo (Kurgan Region); Atomredmetzoloto employees JSC Khiagda 13,647 15,312 15,858 * The support programme for educational JSC RUSBURMASH 16,974 16,974 17,176 In addition to corporate charity programmes, we institutions of the Kurgan region - assisting JSC VNIPIpromtechnologii 18,375 64,500 42,350 participate on our own and at our own expense in the Municipal State-owned Educational Institution implementation of volunteer projects: Republic of Buryatia 10,005 10,489 10,858 Trudovskaya Secondary School (Trud i Znanie JSC Khiagda 15,129 16,974 17,579 village, Zverinogolovsky district) in the acquisition of * The “Good things” action: collecting things for the JSC RUSBURMASH 23,510 23,510 22,428 equipment for vocational guidance class “Dalur” with “Good things” social project; in-depth study of the physical sciences; * Operation area – the subject of the Russian Federation, where the Holding Company operates. * The “Alma” action: collecting rags for “Alma” animal * Trans-Baikal Territory Development Fund, which shelter; GRI 202-2 Adhering to the principles of social responsibility, the Holding Company predominantly hires employees (including provides support in the remediation of consequences * The “Batteries and light bulbs” action: recycling used managers) from among the representatives of the local population. More than half of the Holding Company top of emergency situations and provides prompt batteries and light bulbs; managers in the operation area are employed from among the local population. In the reporting period, the Holding assistance to the population in the event of a Company had no effect due to the need for resident resettlement. possible deterioration of the flood situation; * The “Old age in joy” action: collecting New Year’s gifts for the elderly, who are in nursing homes; * The Regina Yuryeva Foundation to support and facilitate the implementation of priority social * The “Become a donor” action: blood donation for GRI 203-1 Investments in public infrastructure and charity projects, which assists in organizing the participation patients of the Bakulev Medical Centre. of children in the international social project “A World We are convinced that we have a significant impact on the social and economic development of the operation areas, without Terror Through the Eyes of Children”. This not only participating in the CGT and creating a revenue base of regional and local budgets, but also implementing a project is aimed at finding talented children in the complex of social and charitable programmes. field of painting, including those with disabilities, in the regions of Russia and foreign countries, as well as attracting to the project prominent artists who Corporate social responsibility programmes are aimed Results of 2018: at: actively contribute to the children promotion and • public loyalty index regarding the nuclear public recognition. support of educational programmes power industry acceptability in Russia and and projects; abroad increased; • new cooperation agreements were concluded cultural awareness initiatives and the cultural heritage preservation; in the operation areas; • work with federal authorities and public organizations continued; support of environmental activities; • several charitable projects were implemented in the field of education and social infrastructure support in the operation areas; popularization of mass and amateur sports and a healthy lifestyle; • V grant competition was held in support of social projects in Krasnokamensk, Trans-Baikal Territory. support of patriotic values and patriotic education.
In 2018, JSC Atomredmetzoloto spent 7 million RUB to provide charitable support to legal entities and individuals.
92 JSC Atomredmetzoloto Annual Report 2018 93 Section of the 4.7. Contribution National Report, where the ARMZ contribution to national projects projects contribution is to the National Projects disclosed • support of programmes contributing to the development of the road network See Section 4.4.3. in the operation areas; Occupational and • development of road safety programmes; industrial safety In accordance with the Decree of the President of the Russian Federation No. 204 dated 07.05.2018 “On the national goals and strategic objectives of the Russian Federation development for the period up to 2014”, the Government • improvement of the system of control over the observance of traffic rules at the Holding Company enterprises and by contractors; of the Russian Federation has developed national projects in 12 areas. ARMZ makes a feasible contribution to the Safe and high- implementation of all national projects. quality roads • development of the system for organization of the vehicle and pedestrian movement. • implementation of systemic measures aimed at increasing labour See Section 4.1.4. Section of the productivity, equipment and personnel; ROSATOM Production National Report, where the • further implementation of RPS projects at Holding Company enterprises System. Compliance ARMZ contribution to national projects with Product Quality projects contribution is aimed at reducing the lead time, stocks in the stream and unclaimed goods and materials at the enterprises; Requirements disclosed • reduction of mining site construction periods; • assistance in improving housing conditions; See Section 4.5. Labour productivi- • theoretical and practical training of personnel; • financial support for families at baby birth; Human Capital ty and employment • assessment of management systems (quality management system and • holding sports and cultural events, etc.; support environmental management system); • non-state pension provision; • implementation of a Unified Industry System - “Quality” - in the Holding Demography • voluntary health insurance of employees; Company organizations. • involvement of employees in systematic physical exercises and sports. • further research on the parameters of hardening and pasta laying of the See Section 4.3. developed mountain space based on uranium ore processing tailings; Intellectual Capital • voluntary health insurance of employees; See Section 4.6.1. Social • provision of a certain number of articles in publications indexed in • voluntary insurance of employees against accidents and diseases; Investment Management international databases; • health resort treatment and rehabilitation; • further assessment of the state of sites for underground nuclear explosions • ensuring coverage of all employees with voluntary medical insurance; and the development of measures for their rehabilitation; • reduction of occupational injuries; Science • development of technical solutions for the disposal of solid radioactive • ensuring coverage of all citizens with preventive medical examinations at waste and assessment of the status and prospects for industrial liquid and Healthcare least once a year. radioactive waste injection point operation.
• the reserve production life cycle digitalization and the mining complex See Section 4.3.3. Digital optimization; Economy Performance. • further expanding the list of training localization programmes at the Holding See Section 4.5.3. • development of a sustainable and secure information and telecommunications Company enterprises; Personnel Professional infrastructure for high-speed data transmission; Development • provision of information security. • further implementation of training plans and programmes aimed at Digital economy developing the managerial skills of senior, middle and junior managers; • implementation of the e-learning development strategy EL-2020 at the • mass cultural and educational events; See Section 4.6.1. Social Holding Company enterprises; Investment Management • equipping educational institutions in the field of culture with musical • holding professional skills competition ARMZSkills under the WorldSkills instruments, equipment and teaching materials; methodology; Education • replenishment of the library; • development of mentoring for the critical knowledge transfer. • equipping cinema halls in cities with modern equipment; Culture • provision of grants to the best amateur creative teams.
• increase in the number of people employed in the field of small and medium See Section 4.6.1. Social • assistance in improving housing conditions; See Section 4.6.1. Social business, including individual entrepreneurs Investment Management Investment Management • ensuring sustainable reduction in unlivable housing. • improvement of business conditions • expanding access of small and medium enterprises (SMEs) to financial resources, including concessional financing; Small business and • acceleration of SME facilities; Housing and urban support for individ- environment ual entrepreneurial • promotion of entrepreneurship; initiative • further holding of a grant competition to support social and charitable • efficient production and consumption waste management; See Section 4.4. initiatives in Krasnokamensk. • reduction of the air pollution level, including reduction of the total pollutant Natural Capital • increase in exports of non-primary non-energy goods; See Sections 4.1.2. emissions into the air; • increase in the volume of exports of services; Production Capital Management • biodiversity preservation; • improvement of the transport infrastructure quality; • land reclamation; • development of the Arctic basin port infrastructure; 4.1.3. Business International coop- Diversification • reduction of the volume of wastewater discharged into water bodies; • modernization of energy infrastructure. eration and export Environment • further implementation of the various hazard class waste treatment system.
Sections of the Report, which describe the Holding Company contribution to the implementation of national projects, are marked by the corresponding infographic icons in the text of the Report.
94 JSC Atomredmetzoloto Annual Report 2018 95 5.1. Definition of Stakeholders GRI 102-40,42
Assessing the impact on the current activities and * Government (federal authorities of the subjects strategic development of ARMZ, as well as the current of the Russian Federation), local governments, practice of the Company’s interaction with external regulatory authorities, stakeholders and their dependence on the ARMZ * Business partners, suppliers, performance results, we identified the following key stakeholders: * Holding Company employees, trade unions, * Shareholders, * Product consumers (JSC TVEL, JSC TENEX), * Investment community, * Mass media, NPOs, environmental organizations. * Local communities, The degree of mutual influence and intersection of interests of stakeholders is reflected in the ranking map of stakeholders.
Fig. 31. Ranking Map of Stakeholders GRI 102-43
Shareholders Public organizations 2 Government departments
1,5
1 Local Business communities partners
0,5
0
Scientific and expert community Investors
Environmental Staff organizations
Customers Mass media
Influence of the stakeholder on the company Influence of the company on the stakeholder
Chapter 5. INTERACTION WITH STAKEHOLDERS 97 GRI 413-1 Activity and Stakeholders Interests Interaction mechanisms 5.2. Interaction with Stakeholders results in 2018 Government (federal • work efficiency and stability; • conclusion of cooperation agreements; See Sections authorities, author- • safety and transparency of activities; • holding regular meetings; 3.1. Corporate ities of the subjects • no negative impact on the environment; • presentation of annual reports as part of Governance System, We support regular open communication with Company subsidiaries also have their own programmes of the Russian 3.2.2. Key Risks and • regular tax payments; dialogues and public hearings; Federation), local gov- Their stakeholders and build it on the basis of the business of interaction with local communities. • publication of annual reports on the ernments, regulatory • development of operation areas; social responsibility principle. official website In order to strengthen the positive image, JSC authorities • responsible position regarding the Management Results The company adheres to a systematic approach to social Atomredmetzoloto took part in a number of major environmental safety; issues and social investment management, helping to international exhibitions, such as: • responsible HR and social policy reduce social risks, ensure long-term fruitful relations * annual symposium of the World Nuclear Association; with the operation areas and create the image of a socially responsible company. * St. Petersburg International Economic Forum SPIEF-2018; Business partners, • stable partnership; • holding meetings, negotiations; See Sections 1.4. In its activities JSC Atomredmetzoloto uses various suppliers • protection of the rights and consideration • disclosure of information on an external Supply Chain, means of communication with stakeholders – general * International Forum ATOMEXPO 2018; of the shareholder interests; websites; 3.4. Procurement • implementation of development plans; • use of online purchasing portals with a Management meetings of shareholders, congress and exhibition * International Forum of Nuclear Industry Suppliers events, presentations, informing through the media, • stable financial position; feedback system; ATOMEX 2018; • procurement system transparency; • monitoring of compliance with a Uniform social networks and corporate publications, hotlines for Industry Procurement Standard; employees, federal communication projects, regional * International Arctic Forum “The Arctic: Territory of • solvency; • order stability • presentation of annual reports as part of projects of the Holding Company. All of the Holding Dialogue”, etc. dialogues and public hearings Holding Company • decent and stable wages; • development and conclusion of collective See Section 4.5. employees, trade • training and development, career agreements; Human Capital unions perspectives; • holding Informing Days; Resolving community relations disputes • competitive social package; • regular management meetings with • professional advancement; employees regarding the Holding Ensuring the public acceptability regarding the nuclear relations, the Holding Company will be guided by the • no negative impact on the environment; Company activities, including the Board of Foremen at PJSC PIMCU; energy development is one of the main strategic laws of the Russian Federation and the requirements of • development of operation areas; • system of internal media and feedback; objectives of ROSATOM. JSC Atomredmetzoloto ROSATOM. • job security, stable salary; conducts activities in this area, guided by the principle of • presentation of annual reports as part of There were no complaints about the JSC • socially responsible employer; information transparency. dialogues and public consultations Atomredmetzoloto impact on the local community. • professional development In the event of problem situations in the community
Product consum- • stability, reliability and uninterrupted • holding regular meetings; See Sections 1.4. ers (JSC TVEL, JSC supply; • feedback system; Supply Chain, 1.5. TENEX) • product quality and price • quality control; Value Chain and Business Model Interaction with stakeholders • analysis of expectations; • disclosure of information on an external website Tab. 54. Interaction with Stakeholders in 2018 Mass media, NPOs, • efficiency, openness, transparency of the • issuing of press releases; See Section 5.3. environmental company; • holding press conferences and Informing Transparency as Activity and Stakeholders Interests Interaction mechanisms organizations • development prospects for the industry Days; the Main Principle results in 2018 and city-forming enterprises; • presentation of annual reports as part of of Interaction with Stakeholders Shareholders • building up and diversification of the • holding general meetings of shareholders; See Section • environmental safety of production; dialogues and public consultations; resource base; • disclosure of information on an external 3.1.1. Corporate • key events, performance of key • provision of comments on issues related • investment efficiency; website; Governance indicators; to the activities of ARMZ Uranium Holding Co. enterprises • safety priority; • regular reporting; • social responsibility • achievement of rated indicators • annual report presentation as part of the dialogues
Investment • investment efficiency and growth quality • holding regular meetings; See Chapter 2 community • disclosure of information on an external Strategy and GRI 203-2 website markets; Section Economic impact on suppliers and contractors 4.1.3. Business Diversification In order to ensure a competitive and impartial choice non-fulfillment of obligations stipulated by contracts, of suppliers of goods and services, we adhere to the as well as by withholding payment until the execution Local communities • social and economic development of the • public opinion polls; See Section principles of openness and transparency of procurement of contractual obligations in full. Possible sanctions are regions; • holding public hearings as part of the 4.6. Social Capital activities. spelled out in the contract, which is an integral part of • implementation of social projects in the annual report publication; operation areas; • holding public hearings as part of the new In our work, we take into account our possible impact the procurement documentation, and the same for all • maintaining a stable level of employment; facility construction; on contracting organizations by applying sanctions for participants. • environment • informing through mass media
98 JSC Atomredmetzoloto Annual Report 2018 99 1% 5.3. Holding Information 11%
Transparency as the Main * Total number of subscribers is 11,504. * Posts (messages) - 4,465. Fig. 33. Balance of neutral * Audience reach is 141,356 people. Principle of Interaction positive and negative Most popular content: publications in the mass media in 2018 * news about the enterprise operation; * corporate events (KVN, Spartakiad, etc.); with Stakeholders * contests with souvenirs; 88% * photos of enterprise employees, operation area nature. We strive to ensure the maximum level of openness and The Holding Company enterprises disclose information in transparency of our activities, adhering to the principle the form of publishing decisions made by their Boards of of an active, regular and constructive dialogue with Directors, disclosing stages of the procedure for issuing Positive (3,352) Neutral (422) stakeholders. We support mutually beneficial cooperation securities, the Annual Report, annual accounting (financial) and partnership with all stakeholders, promptly responding statements and other documents. Negative (25) to the stakeholder requests and wishes and providing This information can be found on the websites essential information on all aspects of the Holding of JSC Atomredmetzoloto http://www.armz.ru/ Company’s activities. aktsioneram-i-investoram/raskrytie-informatsii/soobshcheniya- Informational openness, transparency and fulfillment of o-raskrytii-informatsii and its subsidiaries. the obligations assume respect for the balance of public interests and the commercial secrets of the Holding Company’s enterprises. 5.4. Commitment Media relations to Human Rights Protection In our work with the media, we strive to provide the Relevant information on all aspects of ARMZ Uranium most up-to-date and reliable information about the work Holding Co. activities is published by federal, regional of the Holding Company and the radiation situation in and foreign media. We do not accept the violation of human rights in In the area of human rights, ARMZ is guided by: uranium production enterprises as quickly as possible. any form or manifestation. One of the fundamental * the Constitution of the Russian Federation and principles of the ARMZ work is respect for human Russian legislation, rights. For the Company violation of human rights in all Fig.32. Dynamics of ARMZ Mentions in forms and manifestations in the field of interaction with * documents of the International Labour Organization; the Media 399 100 employees, business partners and other stakeholders is * UN Universal Declaration of Human Rights; unacceptable. 3,799 * UN Global Compact Principles; 3,318 3,102 We strive for strict adherence to the rules of ethical 300 business vision, demonstrate a responsible attitude * UN governing principles of entrepreneurial activity in 50 toward employees and ensure that their work is the aspect of human rights, etc. voluntary and is rewarded properly. We recognize our responsibility to ensure that any of our actions do not directly or indirectly contribute to the 189 violation of human rights. 2016 2017 2018
Media representatives can send inquiries and requests “Vestnik Khiagdy”, JSC Dalur – “Vesti Dalura”, JSC through the website of JSC Atomredmetzoloto (http:// RUSBURMASH – “RUSBURMASH pobedit!”. Also, www.armz.ru/press/contacts_for_mass_media/) and PJSC PIMCU is the main shareholder of JSC TV-Centre. the corresponding sections of the websites of its (Krasnokamensk) – a local television company that subsidiaries. broadcasts its own programmes on the frequency of As part of an open information policy, ARMZ Uranium the TNT channel on the basis of federal licenses and a Holding Co. is widely represented on all industry corresponding agreement. information resources of ROSATOM: on the website ARMZ Uranium Holding Co. is represented in four social http://www.rosatom.ru, in the Strana ROSATOM networks, ARMZ and PJSC PIMCU groups are also newspaper, in the State Corporation video blog and created. Strana ROSATOM radio programme, etc. Corporate newspapers are published for employees of ARMZ Uranium Holding Co. enterprises and residents of In 2018, JSC Atomredmetzoloto began to the operation areas. PJSC PIMCU publishes the “Gornyak issue the internal corporate newspaper Priargunya” newspaper, JSC Khiagda – Vestnik ARMZ
100 JSC Atomredmetzoloto Annual Report 2018 101 development of strategic metal mining. In accordance with the order of E.P. Slavsky No. 068 dated 13.03.1968, the construction of the Priargunsky Mining and Chemical Works JSC Dalur Transparency has began. By the order of ROSATOM No. 1/63-лс dated 02.03.2018, the enterprise work collective was awarded the Departmental Order for the first time in the history of the nuclear industry. Slavsky”. The environmental protection (EP) and the rational Guided by the listed priorities and current legislation, By order of the JSC Atomredmetzoloto Director General use of natural resources in the places of the subsoil before the deposit development, JSC Dalur makes Vladimir Verkhovtsev No. 003/198-П dated 09.08.2018 use are strategically important tasks not only for JSC public awareness efforts toward the Kurgan Region the town-forming enterprise was given the name of E.P. Dalur, but for the whole ROSATOM Mining Division. The population. In particular, informing the population Slavsky. The full name of the enterprise now is Public Joint- main objective of EP is to ensure a level of safety of of the Kurgan region Zverinogolovsky district after E.P. Slavsky in PJSC PIMCU Stock Company E.P. Slavsky Priargunsky Industrial Mining uranium production, which minimizes the impact on obtaining a license for the right to use a subsoil plot of and Chemical Union (PJSC E.P Slavsky PIMCU). the environment, personnel and population, allowing to federal value Dobrovolnoye (government order of the preserve the natural environment in areas of industrial Russian Federation No. 1131-р). The name of the legendary Minister of Medium Machine The football tournament, essay and children’s drawing activity. Ecological reference points are included in Building Efim Pavlovich Slavsky is closely associated with contests were dedicated to the anniversary of the In the villages of Zverinogolovskoye and Trud i Znanie, the development programmes of efficient uranium the city of Krasnokamensk and the city-forming enterprise. legendary minister, as well as such events as: a permanent information centre is open. It was E.P. Slavsky who signed an order to build a plant and * publication of the book “E.P. Slavsky. Uranium mining production methods, the man-made load on the a city in the Trans-Baikal steppe. The city located in the enterprises of the domestic nuclear industry” environment is constantly decreasing. In the city of Kurgan, the villages of Zverinogolovskoe foothills of the Argun range emerged as a settlement of and Uksyanskoe, JSC Dalur holds round tables and JSC Dalur is an informationally open enterprise and geologists in 1968, after discovery of an uranium deposit * holding an evening of memories “Efim Slavsky. The seminars with the involvement of renowned scientists; Legend” on November 2 in the Palace of Culture considers one of its important tasks to provide all in the Priargun steppe by geologists of the Sosnovsky monthly tours to the existing JSC Dalur industrial expedition in 1963. The city was named after one of the “Dauria” in Krasnokamensk; stakeholders with truthful and honest data on its sites for the Kurgan Region residents. Also, public nearby rocks, which acquired a red color at sunset. activities, explanations about technology and operation * Publication of the article “To the 120th anniversary participation was organized in the environmental methods, safety for the public and the environment. The USSR Minister of Medium Machine Building annually of the birth of Efim Pavlovich Slavsky” in the Mining monitoring of promising uranium production areas, Priorities for JSC Dalur are unconditional compliance visited Krasnokamensk, personally oversaw all the Journal No. 7, 2018. in the preparation of a terms of reference and in the with the law requirements, public participation at direct development of license justification documents, all stages of activity, provision of opportunities for environmental impact assessment, etc. everyone to make their suggestions, additions and Celebration of the 50th JUNE: anti-vandal street simulators were installed in 4 comments to the draft documents, informing the public. districts of Krasnokamensk; anniversary of PJSC PIMCU PJSC PIMCU museums - the B.N. Khomentovsky Mineralogical Museumand the Paleontological Museum - The year 2018 in the Trans-Baikal Territory was marked moved into the new premises; by the celebration of the 50th anniversary of PJSC PIMCU, creation of the Alley of PIMCU Veterans; The result of the public awareness efforts was the * August 2018 – on the materials on the planned Festive events in Krasnokamensk with the support of the opening of the PJSC PIMCU children’s holiday camp support of uranium production plans in the Kurgan economic activity and the preparation of the terms of regional government took place from January to August. So, Sputnik after reconstruction; region by the majority of local residents. In 2018, in reference for the development of the environmental the following key events were organized: JUNE-AUGUST: holding of the Trans-Baikal supermarathon accordance with the current legislation, the following impact assessment (EIA) project for the “sludge pits” JANUARY: regional boxing tournament in memory of “Around the World in 80 Days”, dedicated to the 50th public hearings were held in the village nearest to the for spent drilling muds; Igor Katasonov (the championship of the Trans-Baikal anniversary of PJSC PIMCU. For 80 days, its participants Dobrovolnoye deposit, the village of Trud i Znanie, * November 2018 – on the discussion of the Territory among young men born in 2002-2005); in total had to run 40,072 km, which is the maximum Zverinogolovsky District: circumference of the Earth at the equator. By the end of preliminary draft of the environmental impact FEBRUARY: a gala concert dedicated to the 50th anniversary the project, the runners “crossed” the equator twice and assessment project for the construction and of the USSR Council of Ministers decree on the * March 2018– on the materials on the planned scored 95,402 km, the total distance traveled by cyclists construction of a plant based on the Streltsovskaya group economic activity and the preparation of the terms of operation of a pilot section for uranium drillhole was 71,488 km; of uranium deposits; reference for the development of the environmental in-situ leaching at the Dobrovolnoye deposit; volleyball, shooting and darts competitions among the JULY: regional intellectual quest; impact assessment project “Pilot section for uranium * December 2018 – on the discussion of materials teams of Krasnokamensk; The main festive events dedicated to the anniversary drillhole in-situ leaching at the Dobrovolnoye justifying the license for the construction of nuclear MARCH-AUGUST: meetings of veterans of the PJSC PIMCU were held in August 2018: deposit”; facilities. business units, awarding the medal “For Labour Feat”; * opening in Krasnokamensk of a permanent photo MARCH: ceremonial events commemorating the first exhibition “50 Years of Accomplishments”; As a result, in the village of Uksyanskoe (Dalmatovsky district) the materials for justifying the license for the Director of PMCW, Stal Sergeevich Pokrovsky; construction of nuclear facilities used unanimously. In the village of Trusilovo (Shumikhinsky district), 45 of present * gala concert of the second season of the KVN league the territorial contest festival “Dance Mix”; people voted “for”, 2 – “against”. In the village of Trud i Znanie (Zverinogolovsky district), 42 participants in the among the PJSC PIMCU business units; APRIL: ceremonial events commemorating geologist Lidia hearings voted “for”, 4 – “against”. Ischukova, the discoverer of Streltsovsky ore field; * giving PJSC PIMCU the name of the legendary Minister of Medium Machine-Building of the USSR, E.P. Slavsky; At the initiative of the inhabitants of the village of Zverinogolovskoye Nikolay Afanasyev and Mikhail Khlyzov, during MAY: “Battle of the Choirs” competition between PJSC PIMCU the construction and operation of the pilot section for uranium drillhole in-situ leaching, sections describing the business units; * awarding PJSC E.P. Slavsky PIMCU of ROSATOM sign impact on aquifers appeared in the EIA They proved that the technology of drillhole construction and production, the meeting of PJSC PIMCU labour dynasties; “Efim Pavlovich Slavsky”; geological and hydrogeological conditions of the field, primarily the depth and isolation of the ore-bearing formation * solemn procession of PJSC PIMCU work collectives along from the overlying horizons, exclude the ingress of productive solutions into the Tobol River and groundwater. The the Stroiteley Avenue of Krasnokamensk on Miner’s Day; proposals of local residents made at the public hearings to conduct continuous monitoring of the facility and its placement in an area that is not affected by the maximum overflow of the Tobol River were added to the EIA project on * music festival “Krasny kamen”; a “sludge pits” * territorial competition “Jeep Sprint “Red Heat”.
102 JSC Atomredmetzoloto Annual Report 2018 103 Tab. 55. Consideration of the most significant stakeholder proposals expressed in the dialogues during the drafting of report for 5.5. Public Reporting System 2018* Stakeholder proposals following the dialogues Stakeholder category that made Accounting of with stakeholders a proposal proposals The Holding Company is key organization of ROSATOM Since 2017, JSC Atomredmetzoloto Public Disclose the Company's contribution to the implementation Scientific and Expert Community Taken into account in terms of reporting. In order to increase the Annual Reporting Standard is in effect. It of national goals, ideas set by the President of the Russian in Section 4.6. Social transparency of its activities and expand interaction Federation V.V. Putin in May 2018 Capital sets out the general requirements for public with all stakeholders, since 2008 the Holding Company Disclose the role of financial indicators as a basis for Scientific and Expert Community Taken into account in annually publishes integrated annual reports. annual reports and the public reporting decision making in the Company, to show how they affect Section 4.2. Financial the Company, Capital The functional responsibility for the preparation of the system, the Report drafting procedure; the public annual report was transferred to the corporate Report content, including public reporting Disclose the measures taken by the Company to ensure the Shareholders Taken into account in communication department. The working group for the indicators and their data sheets. economic efficiency growth Section 4.2. Financial annual report drafting is chaired by the Deputy Director Capital General for Strategy A.G. Burutin. Pay more attention to the environmental component of the Shareholders Taken into account in Company's activities Section 4.4. Natural Capital Explore the topic of the 50th anniversary of PIMCU Local communities Taken into account through the placement of the chronological strip “50 in Section 50 Our awards and achievements for the Public Annual Report 2017: Accomplishments of PIMCU” Accomplishments of PJSC PIMCU Federal competitions: International competitions: Give more specific indicators in the business model, clarify Scientific and Expert Community Taken into account in * Diploma in a special category “Best comprehensive * Gold medalist in the category “Print Media/Print the indicators available in the business model Section 1.5.2. Business disclosure of the company’s results achieved in 10 years” Creativity/CSR” following the results of the American Model of the XV annual competition of annual reports of the competition of corporate communications MarCom international rating agency Expert RA Awards 2018 * Diploma of the nominee in the category “Best Integrated * Platinum medalist in the category “Print Media/ Report” in the competition of annual reports for 2017 Publications/Annual Report” following the results of the 5.7. Conclusion on Public Certification of the XV annual competition of annual reports of the American competition of creative professionals Hermes international rating agency Expert RA Creative Awards 2019 Background In the process of the Report public certification, we did not set Industry competition: the task of verifying the information accuracy. Confirmation of the degree of the Report compliance with any reporting * Victory in the competition category “Best Public Report The JSC Atomredmetzoloto management (hereinafter referred systems, both Russian and international, is also not part of the in the Field of Sustainable Development” to as ARMZ Uranium Holding Co., Company) suggested that task of this conclusion. we evaluate the integrated public annual report for 2018 (hereinafter referred to as the Report) in terms of completeness We observe the ethical requirements of independence and and materiality of the information disclosed in it, and evaluate objectivity of evaluations; we express our personal expert the efficiency of the Company’s management response to the opinion, and not the opinion of organizations that we represent. stakeholder wishes and comments. All participants in public consultations had the full opportunity 5.6. Interaction with Stakeholders to freely express their opinions. We confirm that we did not receive any remuneration from the Company for participating in Draft Report evaluation procedure the public certification procedure. during the Report Drafting The results of our work are presented in the form of this To this end, the Company provided us with the opportunity to Conclusion on Public Certification, containing the judgments participate and express our comments in four meetings with about which we have come to an agreement. stakeholders that took place: Dialogues with stakeholders during the report drafting November 2018. Absentee questioning of stakeholders on the discussion of the Report draft concept and the updating of Opinions, comments ARMZ seeks to ensure that reporting information Public consultation No . 4 . “Discussion of JSC substantive topics; and recommendations complies with the stakeholder requests. In accordance Atomredmetzoloto Draft Annual Report for 2018” were 27.12.2018. Dialogues No. 2-3 on the discussion of the Report with international standards AA1000SES, GRI SRS and held in absentia in April 2019. priority topic “50 years Regarding the structure and content, we appreciate the Report. IIRS, interaction is carried out through dialogue with JSC Atomredmetzoloto prepared an informative and well- In total, during the dialogues 47 proposals were received of PJSC PIMCU: new prospects for strategic development”; stakeholders. structured report that meets our expectations. It is important from stakeholders for finalizing the draft Report and April 2019. Absentee public consultations on the draft Report that the Company voluntarily assumed responsibility for the Dialogue No . 1 . “Discussion of the draft concept for improving stakeholder engagement. All of them are discussion. Report preparation and for the eleventh consecutive year the JSC Atomredmetzoloto Annual Report for 2018” taken into account when finalizing the Report. demonstrates a high level of commitment to ensuring public was conducted in the form of a stakeholder survey in During the events, we were given the opportunity to freely For details, see information about past events on the JSC and environmental acceptability, and readiness to conduct November 2018. express our opinion. an open dialogue with stakeholders on various areas of its Atomredmetzoloto website http://www.armz.ru. Our conclusion is based on a comparative analysis of two activities. We see that the Company’s management is aware “50 years of PJSC PIMCU: new Dialogues Nos . 2–3 . versions of the Report (draft Report for public consultations of the constructiveness and prospects for interaction with prospects for strategic development” held December 27, and a final version of the Report) and materials provided to us stakeholders. 2018. based on the results of the dialogues held (protocols, tables The undoubted advantage of the Report is the use in its for taking into account the stakeholder comments), as well as preparation of international standards (Sustainability Reporting comments received from the Holding Company management Standard of Global Reporting Initiative (GRI SRS), AA1000 and employees during the public certification of the Report.
104 JSC Atomredmetzoloto Annual Report 2018 105 series of standards of the Institute for Social and Ethical completeness in a balanced way: the Company’s activities are Accountability), standard of the International Integrated presented in the context of sustainable development, special Reporting Council (IR 1.0). The integrated nature of the Report attention is paid to the contribution to achieving the goals of Appendices allowed for comprehensive disclosure of information on the the UN SDGs and the implementation of national projects. Company’s core business and its performance in the field of sustainable development. The involvement of an independent auditor to confirm the stated level of disclosure of information (GRI Standards, the Appendix 1. Report Information We are not aware of any facts that cast doubt on the veracity “main” compliance option) deserves approval. Application Level: GRI GRI 102-54 of the information contained in the Report. We evaluate the Contents of the Report disclosure of information in the Report as sufficient, both in We are not aware of the facts of concealing material Standard SRS Basic information. The JSC Atomredmetzoloto public annual report for 2018 (hereinafter referred to the view of using international public reporting standards, as the Report) is the eleventh integrated report of the Holding Company. and taking into account the stakeholder comments expressed during the Report preparation events. The Company’s response to In November 2018, an absentee dialogue was held to GRI 102-50, Report Boundaries 51, 52 stakeholder recommendations discuss the Report concept. Materiality of information JSC Atomredmetzoloto activity from 01.01.2018 to On December 27, 2018, two dialogues were held to discuss the priority topic. During the Report preparation, two full-time and two extra- 31.12.2018. The Report covers all topics relevant for stakeholders. mural events with stakeholders were conducted. The company The report covers all major companies among the Holding In April 2019, absentee public consultations were held to The Holding Company Report priority topic “50 Years of records comments, suggestions, recommendations of Company’s subsidiaries. discuss the draft Report. PJSC PIMCU: New Prospects for Strategic Development” is stakeholders, analyzes them and constructively responds to The JSC Atomredmetzoloto annual report for 2017 was See details in Section 5.6. Interaction with Stakeholders them. disclosed throughout the Report - at the beginning of the report published on the Holding Company’s website at www.armz. during the Report Drafting. presented a brief overview of the PJSC PIMCS accomplishments Thus, during the Report preparation, the Company ru (Shareholders and Investors> Information disclosure> over 50 years of activity. In our opinion, all relevant information demonstrated its readiness to respond to the stakeholder Annual reports) in June 2018. on the priority topic is disclosed. wishes and proposals and constructively respond to the Information materiality questions and concerns raised. Standards and regulatory determining process Balance and completeness We note the high quality of the preparation and organization of face-to-face public dialogues in which representatives of a wide requirements used in the Report In November 2018, in accordance with the International of information range of stakeholders took part. Integrated Reporting Standard and the Sustainable preparation Development Guidelines GRI SRS, a survey of the Holding In our opinion, information in the Report is disclosed in full. Company stakeholder repre-sentatives was conducted with The information is presented with a sufficient degree of a view to prioritize substantive topics. GRI 103-1, 2, 3 The Report Drafting and Content Determining Process The survey proposed to isolate from the complete list of topics those that, in the respondent opinion should be In the process of the Report preparation, an analysis of the disclosed in the Report first. It was necessary for them to Signatures of Certifiers: Holding Company’s activities in 2018 was conducted. The assess the importance of each topic on a three-point scale integrated report format allows to demonstrate the Company’s and offer their own options for significant topics. The matrix performance in an economic, social context and in relation to is built in the axes, which determine the position of each Marina Aksenova, Olga Kanunnikova, environmental protection. During the Report preparation, a Director (Editor-in-Chief) of the Municipal Unitary Enterprise “Media Deputy Head of the Krasnokamensk Urban Settlement topic both along the horizontal axis (“Significance for the Centre “Slava Trudu” survey of internal and external stakeholders was conducted in Company”) and along the vertical axis (“Significance for Natalya Markova, order to update the matrix of material top-ics. stakeholders). The most significant topics are in the upper Ekaterina Alabuzhina, Chairman of the Krasnokamensk Local Public Organization of the Head of the Moscow Office of Stans Energy Trans-Baikal Regional Public Organization of the All-Russian Society of Information for the Report was collected using special right corner (the darkest field). Disabled People technical inquiries under the GRI and ISIO requirements, Nadezhda Bendyuzhik, taking into account the materiality analysis results. Director of Municipal Public Educational Institution “Uksyanskoye Grigoriy Mashkovtsev, Priority Topic of the Report: Secondary School”, Dalmatovsky district of the Kurgan region Director General of FSBI VIMS The Report also reflects the Company’s influence on Oleg Brizhanov, Olga Plyamina, stakeholders. The Report preparation was carried out in 50 Years of PJSC PIMCU: New Prospects for Chairman of the Krasnokamensk local branch of the All-RussianмPublic Executive Director of the Non-Governmental Environmental Fund close cooperation with them. Strategic Development Organization of Veterans “Boyevoye Bratstvo” Named After V.I. Vernadsky Sergey Golovachev, Igor Radovsky, Advisor to the Communications Department of ROSATOM Head of the Corporate Social Responsibility Department of TENEX Federal regulations: * Sustainable Development Reporting Standard of Yury Didenko, Igor Savelyev, * Federal Law No. 208-ФЗ dated 26.12.1995 “On the Global Reporting Initiative (GRI); Head of the Krasnokamensk Urban Settlement Director of the JSC OTEK branch office in Krasnokamensk Joint-Stock Companies”; * ISO 26000:2010 Social Responsibility Manual, etc. Olga Donskaya, Andrey Fedorov, * Federal Law No. 402-ФЗ dated 06.12.2011 “On Executive Director of the Microcredit Company “Fund for the Support of Head of the Vitimskoye rural settlement ROSATOM’s Regulatory Documents: Small Entrepreneurship of the Krasnokamensk Urban Settlement” Accounting”; * Bank of Russia Regulation No. 454-П dated * Uniform Industry Policy of ROSATOM in the field of 30.12.2014 “On Information Disclosure by Issuers public reporting, approved by order of ROSATOM of Securities”; No. 1/1069-П dated 11.11.2015; * Bank of Russia Letter No. 06-52/2463 dated * Uniform Industry Guidelines of ROSATOM and 10.04.2014 “On the Corporate Governance Code”. its organizations in the field of public reporting, approved by order of ROSATOM No. 1/671-П dated International Public Reporting Standards: 18.07.2017. * International stakeholder relation standards of JSC Atomredmetzoloto’s Regulatory Documents: АА1000 SES series (Institute of Social and Ethical * JSC Atomredmetzoloto Public Annual Reporting AccountAbility); Standard * Integrated Reporting Standard of the International Integrated Reported Council (IIRC);
106 JSC Atomredmetzoloto Annual Report 2018 107 GRI 102-45, Tab. 56. Materiality Matrix GRI 102-55 46, 47, 48, 49 3 Appendix 2. Table of GRI Disclosures 311328 14 15 19 39 18 37 21 16 1 8 11 6 41 2 22 38 32 12 3 36 24 43 5 9 44 33 35 10 42 7 40 2 17 30 27 4 23 20 Reporting Reporting Reporting 34 26 25 Report Page Report Page Report Page 29 Element Element Element GRI 102. GENERAL ELEMENTS 102-28 36 Assessment (including GRI 201. Economic Performance self-assessment) of the 102-1 15 201-1 13, 61, 82, 90 1 Board of Directors activi- 102-2 15 ty is not carried out. 201-2 70 102-3 117 102-30 36 Board of Directors 201-3 86, 88 does not participate in 102-4 15 the risk management 201-4 91 Significance for stakeholders 102-5 16 process GRI 202. Market Presence 0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 2 2.2 2.4 2.6 2.8 3 102-6 17 102-31 36 202-1 60, 91
Significance for company 102-7 13, 61 102-32 36 The JSC 202-2 60, 92, 116 Atomredmetzoloto inte- 102-8 13 GRI 203. Indirect Economic Impacts Immaterial Sufficiently material Most material grated annual report, including information on Economy topics: Social topics: Society: 102-9 18, 20 203-1 92 sustainable development, 1 Financial performance 31 Influence on operation areas (social programs, 102-10 35 203-2 99 2 Market presence Approaches to labour organization charity) is approved by the Board 3 Indirect economic effects (including creation of 102-11 18, 42, 70 of Directors GRI 204. Procurement jobs in the supply chain) and good faith labour: 19 Employment Product liability: 4 Procurement 32 Consumer health and safety 20 Employee and management relations 102-12 15 204-1 45 5 Business continuity 33 Marketing and labelling 102-33 36 21 Health and occupational safety Training and 6 Innovations 34 Consumer privacy 7 Corporate governance (including improvement of education Equal opportunities (equal remuneration 102-13 102-34 36 GRI 205. Anticorruption Policy management mechanisms) for men and women) Specific topics: 8 Diversification 24 Social security 35 Place in the NFC production chain of ROSATOM 102-14 6, 8 102-35 37 205-1 43 9 Investments 36 Global uranium markets Human rights: 37 Development strategy 102-15 32, 40 102-36 37, 82 205-2 43 Environmental topics: 25 Prevention of discrimination 38 Value chain 10 Materials (used materials) 26 Freedom of association 39 Future forecast 102-16 16, 27 102-37 Not involved GRI 302. Energy 11 Power (power consumption) 27 Child and involuntary labour 40 Feedstock base development 12 Water (water consumption) 28 Safety (safety practices) 41 Performance management 102-18 36 102-40 97 302-1 59 Data on the volume 13 Emissions and wastes 29 Right of indigenous peoples 42 Risk management of energy sold and total 14 Product safety 30 Claims against human right infringement 102-19 36 43 Occupational and industrial safety 102-41 86 energy consumption 15 Environmental compliance 44 Industry digitalization 16 Environmental investments 102-20 36 102-42 75, 90, 97 are not disclosed due to 17 Biodiversity the lack of a centralized 18 Emergency preparedness 102-21 36 Special consultations 102-43 97 accounting system between the stakehold- ers and the Board of 102-44 Directors are not held. Report Verification 102-45 108 302-2 There is no system There are no significant changes in the scope and boundaries of Financial audit - Nexia Pacioli Group of Companies 102-46 108 for accounting the significant topics compared to previous reports. The boundaries of information on ener- topics and content of the Report are determined by the working Audit of the internal control and audit department 102-22 36 102-47 108 gy consumption in the group for the annual report drafting, taking into account the Public certification supply chain and the con- 102-23 36 102-48 108 views of stakeholders and agreed by JSC Atomredmetzoloto Non-Financial Audit - Nexia Pacioli Group of sumption chain 102-24 36 102-49 108 departments. Immaterial topics in the Report are not revealed. Companies 302-3 Not calculated because The performance indicators presented in the Report refer to the 102-25 36 In case of simul- 102-50 107 total energy consumption following perimeters: taneous joining the is not calculated 102-51 107 * production indicators are presented on the basis of data * conclusion on public certification, in which representatives governance body of other on assets - PJSC PIMCU, JSC Dalur, JSC Khiagda, JSC of external stakeholders participate on a voluntary companies (cross-mem- 102-52 107 RUSBURMASH, JSC VNIPIpromtechnologii; gratuitous basis; bership)), members of 302-4 59, 60 the Board of Directors 102-53 117 * environmental indicators - PJSC PIMCU, JSC Dalur, JSC 302-5 Not applicable * conclusion of an independent non-financial auditor, whose do not vote at meet- 102-54 107 Khiagda; selection is carried out as part of an open procurement ings on issues related to GRI 303. Water * personnel and occupational safety indicators - JSC procedure. approval of transactions 102-55 109 Atomredmetzoloto, PJSC PIMCU, JSC Dalur, JSC Khiagda, JSC between the companies, 102-56 108 An independent 303-1 71 RUSBURMASH, JSC VNIPIpromtechnologii, LLC ARMZ Service; if they are recognized non-financial auditor is * financial indicators - JSC Atomredmetzoloto, PJSC PIMCU, Statement of limitation of responsibility as interested (or not selected through an open GRI 304. Biodiversity JSC Dalur, JSC Khiagda, JSC VNIPIpromtechnologii, JSC recognized as independ- for the forecast data publication procurement procedure 304-2 70 RUSBURMASH, LLC ARMZ Service, JSC Elkon MMP, JSC ent) by the requirements of the Federal Law “On EGMK- Project; The report contains forward-looking statements regarding GRI 102. Ethics and Good Business Practice 304-3 75 Joint-Stock Companies” * energy efficiency indicators (energy consumption within the production, financial, economic and social indicators in their commission. The 102-16 GRI 305. Emissions organization) - JSC Atomredmetzoloto. characterizing the Company’s further development. The list of affiliated persons is 102-17 implementation of the assump-tions and intentions is directly disclosed on the Internet 305-1 72 related to the political, economic, social and legal situation. In GRI 102. Remuneration and Incentives Authentication of information at http://www.armz.ru/ 305-2 Not calculated, as there this regard, the actual results of the Company’s activities may aktsioneram-i-investo- 102-35 is no corresponding The Report preparation was carried out by a working group and differ from those predicted. ram/raskrytie-informatsii/ information accounting 102-36 was supervised by the Corporate Communication Department. spiski-affilirovannykh-lits system GRI 102-56 The report was approved by the JSC Atomredmetzoloto Board GRI 103. Management Approaches of Directors. 305-3 72 Not calculated, as 103-1 107 there is no corresponding The report passes two external certifications: 102-26 36 103-2 107 information accounting system 102-27 36 103-3 107
108 JSC Atomredmetzoloto Annual Report 2018 109 Reporting Reporting Reporting Report Page Report Page Report Page Element Element Element Appendix 3. Conclusion of the Internal 305-5 72 305-5 The calculation 404-2 82 417-3 In 2018, there were no of the greenhouse gas incidents of non-com- 404-3 82 Breakdown by gender emission reduction as pliance with regulatory Control Directorate is not given due to lack of a result of measures to requirements and vol- accounting system reduce emissions is not untary codes relating to carried out GRI 405. Diversity and Equal Opportunities the marketing com- munications, including 305-6 72, 73 405-1 79 advertisement and promotion of products JOINT STOCK COMPANY ATOMREDMETZOLOTO 305-7 72 405-2 81 and sponsorship at JSC GRI 306. Waste GRI 406. Non-Discrimination Atomredmetzoloto and 406-1 its subsidiaries, by type of 306-1 71 consequences Conclusion 306-2 73 GRI 413. Local Communities on Results of Internal Non-Financial Audit of Data 306-3 71, 74 413-1 98 in JSC Atomredmetzoloto’s Annual Report 2018 413-2 No significant negative 306-4 There is no transbound- GRI 418. Customer Privacy ary waste movement at impact the Company’s facil- 418-1 In 2018, there were no well-founded com- ities. Transportation, GRI 415. Publicity Policy processing or trans- plaints against JSC The internal non-financial audit of the drafting process of JSC Atomredmetzoloto’s public fer for recycling of 415-1 Atomredmetzoloto and Annual Report 2018 (hereinafter the Report) has been completed in furtherance of clause 9 of waste generated at its subsidiaries regarding GRI 416. Consumer Health and Safety violations of consumer Attachment 2 to the order of JSC Atomredmetzoloto’s Director General No. 003/334-П dated the Holding Company 12/14/2018 On Organization of Work for Drafting JSC Atomredmetzoloto’s Annual Report 2018. enterprises and which 416-1 JSC Atomredmetzoloto privacy and loss of con- sumer data are hazardous under the conducts an annual qual- The Report drafting process engaged the considerable part of JSC Atomredmetzoloto’s core ity assessment of its Basel Convention is not business units and employees of its subsidiaries. Information provided by them was assessed, carried out. products to identify the opportunities for their discussed and further consolidated. Responsible persons have conducted the dialog with 306-5 Wastewater discharges improvement. representatives of stakeholders regarding disclosure of the priority topic in the annual report as do not have a significant GRI 419. Compliance with Social and well as public consultations regarding the draft annual report. impact on the biodiversity 416-2 In 2018, there were no Economic Requirements of water bodies and their incidents of non-com- 419-1 In 2018, there were The year 2018 was marked by the commemoration of the 50th anniversary of PJSC PIMCU and associated habitats. pliance with regulatory no significant viola- the 120th anniversary of the birth of the Head of the Ministry of Medium Machine-Building, E.P. requirements and volun- tions of the law by JSC Slavsky. Therefore, the Report has been supplemented with authentic historical references. tary codes relating to the Atomredmetzoloto and GRI 307. Environmental Control health and safety impact its subsidiaries; no sig- The most important event for the Holding Company within the reporting period is the start of of products and services nificant fines or penalties construction of a new uranium mine No. 6 of PJSC PIMCU in the Trans-Baikal Territory. The 307-1 74 at JSC Atomredmetzoloto were applied to the Report contains up-to-date information about this project. GRI 401. Employment and its subsidiaries, by Company. type of consequences 401-1 80, 83 The Report provides both general information on key events and results of 2018 and detailed information on activities to which JSC Atomredmetzoloto’s management and staff pay special 401-2 Part-time employees are attention and which concentrate maximum resources: eligible for all benefits if GRI 417. Product Marketing and Labeling this is their primary place * formulation of the Holding Company’s strategy and priorities; of employment 417-1 The internal local regu- * improvement of management and production performance; latory documents of the Company require product * implementation of national projects; 401-3 There is no centralized labeling indicating the accounting system sources of its origin, com- * protection of natural resources. position, conditions of The information set forth in the Report fully represents the main facts and achievements of the GRI 402. Relationships between Employees use and disposal. and Management Mining Division in 2018 in all material respects. 402-1 80 The report allows informing users of the existing systems and practices of business corporate GRI 403. Occupational Health and Safety 417-2 In 2018, there were no governance, achieved results, short- and long-term plans. incidents of non-com- 403-1 77 pliance with regulatory Audit findings allow concluding that the public reporting process is efficient and that the public requirements and volun- 403-2 77 Breakdown by gender reporting procedure of JSC Atomredmetzoloto is compliant with the requirements of Russian tary codes relating to the is excluded. The con- information and labelling legislation and international standards for the public reporting. tractor injury rates are on properties of prod- excluded, as there is no ucts and services at JSC system for collecting and Atomredmetzoloto and accounting such data. its subsidiaries, by type of consequences Acting Director, Internal Control 403-3 77 D.M. Pimenov 403-4 77, 86 GRI 404. Training and Education 404-1 82 The number of train- ing hours by gender is not disclosed due to lack of accounting
110 JSC Atomredmetzoloto Annual Report 2018 111 Appendix 4. Conclusion on the Report independent certification results
Nexia Pacioli, Limited liability Company As a part of the assignment providing the limited confidence, the auditor reduces the risk under the (Nexia Pacioli, LLC) assignment to any acceptably low level, while considering the circumstances, in order to make the conclusion. TIN 7729142599, CRR 770601001, PSRN 1027739428716 Tel: +7 (495) 640-64-52 As a part of the assignment performed in accordance with IASA 3000, we apply our professional E-mail: [email protected], www.pacioli.ru judgment and maintain professional skepticism during the audit. In addition, we perform the following 2 Malaya Polyanka St., Moscow 119180, Russian Federation activities: Conclusion on the Results of the Independent Certification of the Public Annual * Identification and assessment of all risks of material misstatements in the Report due to fraud or mistakes, development and implementation of procedures in response to such risks, obtaining Report of Atomredmetzoloto, JSC for 2018 the evidences that are sufficient and appropriate to serve as the basis for making our conclusion. The risk of failure to find material misstatements due to fraud is higher than the risk of failure to find material misstatements due to mistakes, as unfair actions may include collusion, forgery, Addressees intentional omission, distorted information or bypassing the internal control system, Management Board of Atomredmetzoloto, JSC * Obtaining the understanding of the internal control system, which is relevant to the performance Subject of the Certification of the assignment, in order to develop the procedures appropriate to the circumstances, but not to make the conclusion about the effectiveness of the Customer’s internal control system, Information included in the Public Annual Report of Atomredmetzoloto, JSC for 2018 (hereinafter referred to as the Report) * Assessment of the appropriateness of applied policy, internal documents and calculation methods, as well as the reasonableness of all estimates and the corresponding disclosures prepared by the Criteria Management Board. Information included in the Public Annual Report of Atomredmetzoloto, JSC for 2018: We perform the informational interaction with the persons responsible for the corporate governance by providing them, among other things, with the information on the planned scope and terms under * Requirements of the legislation of the Russian Federation to the annual reports of joint-stock the assignment, as well as significant remarks on the results of the assignment. companies regarding the disclosed information, * Requirements of local regulations in the field of public reporting, Standards and Level of the Certification * Requirements of the global standards for sustainability reporting (GRI Standards) to the basic The certification is performed in accordance with the International Standard of Assurance Assignments compliance option. 3000 “Assurance Assignments Different from the Audit and the Review of the Financial Information for the Past Periods” (IORC 3000, ISAE 3000). The certification is limited in accordance with IASAS 3000. Responsibility of the Management Board Methodology The Management Board is responsible for preparation and submission of the Public Annual Report, as well as the implementation of the process concerning the interaction with interested parties, including We performed the following activities during the certification process: the implementation of all related procedures and requirements, including the internal control system. * Selective interviewing of the top management of JSC Atomredmetzoloto, as well as the specialists This responsibility includes the organization and maintenance of the internal control system that the of JSC Atomredmetzoloto involved in the process of preparing the Public Annual Report, Management Board considers necessary for the preparation of the Report, while ensuring that there * Analysis of local regulations in the field of public reporting, are no material misstatements due to fraud or mistakes. * Verification of documents and the performance data used to prepare the Public Annual Report, This responsibility also includes the selection of applicable legal requirements, as well as the preparation of internal documents and methodologies for calculating the key performance and other * Study of the information about the activities of JSC Atomredmetzoloto, including in the field of indicators for the purposes of preparing the Report. sustainable development, available on the official website, * Selective study of the information about JSC Atomredmetzoloto available in the mass media, Responsibility of the Auditor * Assessment of the compliance of the process of preparing the Public Annual Report, including We performed the assignment in accordance with the International Standard for Assurance the process of collecting, documenting, analyzing, verifying and selecting the data included in the Assignments 3000 (Revised) “Assurance Assignments Different from the Audit and the Review of the Report, with the requirements of local regulations applicable to this area, Financial Information for the Past Periods” approved by the Order of the Ministry of Finance of the Russian Federation on January 2, 2019. * Assessment of compliance with the GRI 101 standard in terms of the requirements for the principles of determining the content of the report and ensuring its quality, Our responsibility is to obtain sufficient appropriate evidence to make the conclusion that provides limited confidence that the Report contains no material misstatements due to fraud or mistakes.
112 JSC Atomredmetzoloto Annual Report 2018 113
Учитывая глобальный масштаб деятельности АО «Атомредметзолото», рекомендуем рассмотреть при подготовке последующих публичных годовых отчетов возможность включения положений о поддержке дополнительных международных руководящих документов в области ответственного ведения бизнеса, таких как Глобальный договор ООН. Заявление о независимости и компетентности ООО «Нексиа Пачоли» - независимая аудиторско-консультационная компания, соблюдающая * Assessment of the compliance with the GRI 103 standard in terms of disclosure requirements for требованияConsidering независимостиthe global scope иof другиеthe activities этические of JSC требования Atomredmetzoloto, Правил we независимости recommend considering аудиторов the management approaches, и possibility аудиторских of including организаций provisions и on Кодекса supporting профессиональной additional international этики guidance аудиторов documents в Российской in the field of responsible business, such as the UN Global Compact, when preparing the following public annual reports. * Assessment of the compliance with the GRI standards (102, 201, 202, 203, 204, 205, 302, 303, 304, 305, Федерации, основанных на фундаментальных принципах честности, объективности, 306, 307, 401, 402, 403, 404, 405, 406, 413, 415, 416, 417, 418 and 419) in terms of the requirements for профессионDeclarationальной of Independence компетентности and иCompetence должной тщательности, конфиденциальности и reporting elements stated in the GRI standards, as well as thematic requirements for the disclosure of the профессионального поведения, и выполняющая требования Международного стандарта information about management approaches, контроляNexia Pacioli, качества LLC is 1an «Контроль independent качества audit and вconsulting аудиторских company организациях, that complies проводящих with the requirements аудит и of independence and other ethical requirements of the Rules of Independence of Auditors and Auditing обзорные проверки финансовой отчетности, а также выполняющих прочие задания, * • Assessment of the information contained in the Public Annual Report for the compliance with the Organizations and the Code of Professional Ethics of Auditors in the Russian Federation based on the requirements of the legislation of the Russian Federation related to the content of annual reports of joint- обеспечивающиеfundamental principles уверенность, of honesty, objectivity, и задания professional по оказанию competence сопутствующих and due diligence, услуг». confidentiality Таким and stock companies. образомprofessional, ООО conduct, «Нексиа and Пачоли» the requirements поддерживает of the International исчерпывающую Standard систем for theу Qualityконтроля Control качества, 1 “Quality в том числе подтвержденную задокументированной политикой и процедурами относительно Findings Control in Audit Organizations Performing the Audit, Review of Financial Statements, and Other Assurance соблюденияAssignments and этических the Assignments требований, for Rendering профессиональных Related Services». Thus, стандартов Nexia Pacioli, и LLC применимых maintains the According to implemented procedures and obtained evidences, our attention was not paid to any facts that законодательныхexhaustive quality control и нормативных system, in particular, требований. confirmed ООО by «Нексиа documented Пачоли» policies являетсяand procedures членом regarding the would make us believe that the subject matter of the certification did not comply in all material aspects with Саморегулируемойcompliance with ethical организации requirements, аудиторов professional Ассоциация standards and «Содружество applicable legal», включено and regulatory в Реестр requirements. the requirements of the legislation of the Russian Federation to the annual reports of joint-stock companies, аудиторовNexia Pacioli, и аудиторских LLC is a member организаций of Sodruzhestvo указанной Association, саморегулируемой self-regulatory organizationорганизации of auditors,аудиторов included regarding the disclosed information, as well as the requirements of local regulations in the field of public 28in октября the Register 2016 of года Auditors за and основным Auditing Organizations регистрационным of the said номером self-regulating 11606052374. organization В of команду auditors on reporting and the requirements of the GRI standards for reporting on sustainable development to the basic специалистовOctober 28, 2016 по with проверке the main Публичного registration number: годового 11606052374. отчета АО The «Атомредметзоло team of specialistsто performing» вошли the compliance option. компетентныеaudit of the Public сотрудники Annual Report ООО of «Нексиа JSC Atomredmetzoloto Пачоли», прошедшие included the специальную competent employees подготовку of Nexia по Pacioli, We note that the requirements of the GRI standards regarding the indicators, such as 102-22, 405-1, 301-1 and РуководствуLLC, who passed GRI, the special стандартам training concerning серии AA1000, the GRI Standards, стандарту AA1000 ISO and26000:2010, ISO 26000:2010, имеющие and had many years of the experience in rendering consultation services related to the public non-financial reporting, as well 306-1, are not fully considered (partial disclosure), explanations on the disclosure of indicators (305-2, 305-3 многолетний опыт оказания консультационных услуг в области публичной нефинансовой and 305-5) also do not fully comply with the requirements of the GRI standards (do not contain plans and terms as the certification in accordance with ISAE 3000. The person responsible for the performance of the audit shall отчетноalways сти,have заверенияa single Qualification в соответствии Certificate с ISAE of the 3000. Auditor. Руководитель проверки имеет единый for the full disclosure). квалификационный аттестат аудитора. Inherent Limitations Without changing our opinion, we pay our attention to the presence of limitations inherent in the certification associated with the selective nature of the verification. As a result, there is a possibility that unfair actions, ГенеральныйDirector General директор S.I. С.И.Romanova Романова mistakes or violations may not be found. May 28, 2019
The certification was performed on the basis of the data for 2018. The certification was not performed in « 28» мая 2019 года respect of forward-looking statements, statements expressing opinions, beliefs and intentions.
The on-site audit procedures were limited to the visit to the Headquarter of JSC Atomredmetzoloto. The certification was exclusively performed in relation to the version of the Public Annual Report for 2018 represented in Russian and MS Word format. We were not able to certify the fact that the Public Annual Report was publicly available, including all Annexes, including the conclusion on the public certification, in its final form, because the signing of such conclusion preceded it. For a similar reason, we did not have the opportunity to certify the fact of the inclusion of the conclusion on the public certification of the Public Annual Report in the Report. Recommendations Disclosure of indicators is advisable to be performed in relation to the target values and plans for the future. Increase in the degree of the disclosure of indicators, which are not fully covered by the requirements for the GRI indicators.
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114 JSC Atomredmetzoloto Annual Report 2018 115 GRI 202-2 List of Abbreviations and Terms Contact details
BIM Building Information Modeling CT Critical Tasks Full company name Atomredmetzoloto, Joint-Stock Company Earnings Before Interest, Taxes, Depreciation and EIA Environmental Impact Analysis Abbreviated name JSC Atomredmetzoloto EBITDA Amortization NIF Negative Impact Facilities Headquarters (HQ) location and mailing address 109004, Moscow, Bolshoi Drovyanoi Lane, 22 GRI 102-3 GRI Global Reporting Initiative EP Environmental Protection Telephone/fax +7 (495) 508-88-08 / 508-88-10 FIFR Fatal Injury Frequency Rate PW Pilot Works [email protected] LTIFR Lost Time Injury Frequency Rate E-mail PP Pilot Plant innovative technology for managing a complex Name of the registering authority, Registration Moscow Registration Chamber, No. 004.997 dated 2/22/1995 Multi-D industrial facility GMS General Meeting of Shareholders number and date Automated Information and Measurement System PW Pilot Works PSRN/TIN/CRR 1027700043645/7706016076/770901001,997550001 AIIS TUE for Technical Electric Power Accounting PP Pilot Plant http://www.armz.ru NPP Nuclear Power Plant Website ETW experimental technological works LT Lead Time Independent Registrar Company R.O.S.T., Joint-Stock Company UUP LLC United Uranium Plants Top Management – Director Generals, Deputy Registrar details: TM Director Generals VSF Vibrating Screen Feeder Registrar information PSRN 1027739216757, TIN 7726030449. GGE FAI Glavgosexpertiza of Russia Underground Mining Method UMM Address and location: Moscow, Stromynka Street, 18, bld. 13 LP Leach Plant Load-Haul-Dump Machines LHD Telephone/fax +7 (495) 771-73-36 MPW Mining and Processing Works DEW Design and Exploration Work ICA Independent Contractor Agreement FOMC The First Ore Mining Company GEC Geological Exploration Crew PMCW Priargunsky Mining and Chemical Works ICD Internal Control Directorate SS Substation SC Subsidiary Companies RPS ROSATOM Production System UHRS Unified Harmonized Remuneration System RAW Radioactive Waste RWS railway shop RRA Repair and Recovery Activities NFC LC Nuclear Fuel Cycle’s Life Cycle RIA Results of Intellectual Activity PNNL Pulsed Neutron-Neutron Logging RMP Repair and Mechanical Plant LMIS Logistics Management Information System EM Exploratory Mine HL Heap Leaching SE Social Expenses ССС Cluster Computer Centre SLF Synthetic Liquid Fuel Ivan Krupyanko Victoria Dolina GRI 102-53 CGT Consolidated Group of Taxpayers MM Mass Media Head of Corporate Communications Department, Head of CSR and Non-Financial Reporting, JSC Atomredmetzoloto JSC Atomredmetzoloto Logging by the Method of Instantaneous Fission DISL Drillhole In-Situ Leaching LIFN Neutrons 22 Bolshoi Drovyanoi Lane, 109004, Moscow, Russia 22 Bolshoi Drovyanoi Lane, 109004, Moscow, Russia USSR Union of Soviet Socialist Republics STF Sewage Treatment Facilities ASN average staff number Tel.: +7-495-508-88-08, ext. 177, Tel.: +7-495-508-88-08, ext.146, LDR Lost Day Rate Fax: +7-495-508-88-10, Fax: +7-495-508-88-10, RMS Risk Management System ODR Occupational Disease Rate E-mail: [email protected] E-mail: [email protected] Priority Social and Economic Development Area KPI Key Performance Indicators PSEDA Corporate Social Responsibility CSR DP Decision Point Switchgear and Control Gear SWCG FS Feasibility Study Local Sorption Unit LSU CHPP Combined Heat and Power Plant Mineral Resource Base MRB Central Laboratory of Instrumentation and CLIA R&D Research and Development Automation NPO Non-Profit Organizations CPS Central Production Site uPVC Unplasticized Polyvinyl Chloride MCD Mine Construction Department NSPP Non-State Pension Provision NFC Nuclear Fuel Cycle NSPF Non-State Pension Fund NEC Nuclear Energy Centre FE NFC Front-End of the Nuclear Fuel Cycle BCO Biochemical consumption of oxygen STI Scientific and Technical Information
116 JSC Atomredmetzoloto Annual Report 2018 117 118 JSC Atomredmetzoloto Annual Report 2018