Roadmap for Sustainable Growth
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Roadmap for Sustainable Growth Corporate Social Responsibility Report 2018 A Roadmap projects for Sustainable NUMBER30 OF PROJECTS CARRIED OUT UNDER THE MASTER PLAN (2018) Growth INTRODUCTION LTIFR: Welcome to the corporate social responsibility (CSR) report 0.45 for KATCO, a Kazakh uranium miner and the largest in situ recovery uranium operator in the world. KATCO is a highly successful joint venture between two of the world’s leading nuclear operators, France’s Orano (formerly AREVA) and Kazakhstan’s TRIFR: Kazatomprom, employing nearly 1,200 people at the end of 2018. LOST-TIME AND0.67 TOTAL RECORDABLE Over more than two decades, KATCO has built a business INJURY FREQUENCY RATE (HSE 2018) based on international best practices in health, safety and environment (HSE) stewardship. The Company adheres to the transparency reporting principles of the global Extractive Industries Transparency Initiative (EITI), of which Kazakhstan is a member, and practices of the International Council on Mining and Metals (ICMM). In 2018, KATCO continued to deliver on its key performance indicators (KPIs ) measuring CSR commitments to its stakeholders, not least ensuring stable production for its customers and providing tax and budget revenues to the local and national governments. The Company provided over 37,000 hours of HSE training and continued to reduce lost-time incidents while fostering a safety-first culture. KATCO has also invested consistently in local communities, including KZT1.3 billion (US$3.8 million) in community-based bln social development projects since 2010, of which KZT125 million (US$362,623) was spent in 2018.* KATCO is also a model kzt for sustainable business and co-hosted a pavilion on World 15.85 Nuclear Energy at Kazakhstan’s International Expo-2017, a major TOTAL SPENDING ON LOCAL global showcase for sustainable energy. PURCHASES (2018) 1 Key performance indicators are a vital tool used to set targets for, and evaluate the ongoing success of, an organisation in the activity in which it engages. * Converted with 2018 average exchange rate of 344.71 KZT / US$, source: https://nationalbank.kz/?docid=364&switch=english 125 mln kzt SOCIAL SPENDING ON COMMUNITIES (2018) KATCO’S CSR KEY PERFORMANCE INDICATORS, 2018 RESULTS mln kzt 29TOTAL SOCIAL PAYMENTS TO EMPLOYEES (2018) 1,191 NUMBER OF EMPLOYEES AT YEAR-END (2018) 1.3 bln kzt TOTAL SOCIAL SPENDING ON COMMUNITIES SINCE 2010 39,004 HOURS OF MANDATORY SAFETY AND PROFESSIONAL TRAINING HELD FOR M&P AND NON-M&P PERSONNEL (2018) SOCIAL75 STABILITY RATING % (2018) CONTENTS About KATCO 2 near France and Kazakhstan in Partnership 6 misses General Director’s Statement 8 106NEAR MISSES REGISTERED Stakeholder Accountability 10 (HSE 2018) CSR System 14 CSR pillar 1: Health and Radiation Protection 18 CSR pillar 2: Occupational Safety 22 CSR pillar 3: Environment 26 CSR pillar 4: Social Involvement 30 tons CSR pillar 5: Commitment to Employees 34 3,212 CSR pillar 6: Innovation 40 TOTAL PRODUCTION OF URANIUM (2018) Reporting and Methodology 44 ABOUT KATCO Established in 1996 to mine the Muyunkum and Tortkuduk KATCO’s annual output grew from 3,000 tons in 2009 to the level deposits in Kazakhstan’s Turkistan region, KATCO Kazakh- of 4,000 tons during the period of 2013-16, then subsided French Joint Venture LLP (KATCO) draws on the international to roughly 3,500 tons in 2017 due to pre-licencing work experience and expertise of the joint venture participants, Orano at the South Tortkuduk project. Going forward, the Company and Kazatomprom, to develop its uranium production activities. projects output levels of around 3,200 tons a year until South Orano owns 51 % of the joint venture and Kazatomprom 49 %. Tortkuduk comes online, after which it expects to return to annual KATCO is headquartered in Nur-Sultan. production levels of 4,000 tons throughout the project’s useful life. Kazakhstan accounts for approximately 40 % of total worldwide In the beginning of 2019, Expert Online2 ranked KATCO uranium production. In 2009, KATCO became the world’s largest 34th among the 100 largest companies in Kazakhstan. in situ recovery (ISR) miner. The Company produced its 40,000th In December 2018, KATCO was recognised as number two ton of uranium in 2019 and accounts for around 7 % of annual in terms of Corporate Social Responsibility in Kazakhstan global output. in the Paryz-2018 competition held by the Kazakhstan Ministry of Labour and Social Protection. In 2017, Orano and Kazatomprom strengthened their historic cooperation by signing a strategic agreement to develop Of the workforce of 1,191 employees at the end of 2018, more the South Tortkuduk project, which is located near KATCO’s than 53 % come from Sozak district, where KATCO’s mining sites existing operations, thereby securing the Company’s production are located, and KATCO recruits from the communities where for the next two decades. it operates. Some 20 % are from the wider Turkistan region, 9 % are from Almaty, 7 % are from the capital city of Nur-Sultan In January 2018, KATCO was granted a mining licence for a new (formerly Astana, where KATCO’s headquarters are located) plot of the Muyunkum uranium field. The Company’s geologists and around 9 % are from other regions of the country. Just under discovered this plot with high resource potential a few years 2 % are expatriates. ago, close to the two mining sites that it already operates. These new reserves recorded in 2017 will cover more than KATCO is committed to providing unlimited growth potential 10 years of production for KATCO. The South Tortkuduk project for talented employees and manages its human resources team is continuing development work on the deposit to begin pipeline by developing partnerships between Kazakhstan’s commissioning and production at the site by 2020. technical schools and universities and higher education institutions in France, as well as internally through Orano’s corporate university programme. OUR MISSION OUR VALUES To be a uranium mining benchmark, in a safe and sustainable manner, Sense of duty for customers worldwide, relying on our people and expertise. Taking care of each other OUR VISION Openness to change To ensure our future with successful innovation and new production Enjoy and have fun projects. Reliability and integrity Orano and Kazatomprom Construction of pilot Muyunkum South processing sign agreement to increase production plant at Muyunkum plant goes into operation KATCO production 1996 2000 2004 2006 2007 2008 Creation of КATCO Launch of industrial Launch of processing joint venture production complex at Tortkuduk 2 http://expert.ru/ratings/rejting-krupnejshih-kompanij-kazahstana-po-ob_emu-realizatsii-produktsii_0/ URANIUM INDUSTRY Uranium is a commodity and therefore subject to a cyclical Overall, there are around 150 new reactors currently on order demand cycle. Today, the market is recovering from a period or planned, with another 300 proposed. Today, an important of pricing volatility while the demand drivers for the next decade demand driver is the international fight against climate change, are becoming clear. In recent years, this has led some uranium where nuclear power is viewed as one means of reducing producers to reduce supply in expectation of future improvements carbon emissions as a replacement for coal and natural-gas in the marketplace. Key consumers of nuclear material burning plants, especially in the rapidly growing markets of China include electric utilities, military submarine fleets and medical and India. users of uranium. Kazakhstan remains the largest uranium producer in the world, According to the World Nuclear Association’s World Nuclear accounting for two-fifths of global production in 2018 despite Performance Report 2018, there are currently around 450 nuclear committing to a 20 % reduction in output to help harmonise power reactors operating worldwide, with a combined capacity the supply-demand balance in response to falling prices of roughly 400 GWe, which provided more than 10 % of the world’s on international markets. In terms of uranium reserves, electric power in 2017. Another 50 power reactors are currently Kazakhstan has an estimated 2 million tons, ranking it second under construction, most notably in China, India, Russia after Australia. According to official statistics, Kazakhstan produced and the United Arab Emirates. 21,699 tons of uranium in 2018, compared with 23,390 tons in 2017. About ISR The in situ recovery (ISR) method was created in the early 1960s and became widespread in uranium mining in the 1990s. In recent years, the process has accounted for almost half of uranium extraction worldwide. The ISR principle consists of injecting a leaching solution through shafts into the uranium deposit. The solution (dilute acid and water) dissolves the uranium as it passes through the deposit and is pumped to the surface. The solution loaded with uranium is then transported by pipeline to the plant where the uranium is extracted and fixed on ion exchange resins. The solutions are enriched with acid and re-injected into the wells, continuing the closed-circuit process. ISR technology has evolved with tight operational and regulatory controls. It causes little surface disturbance, does not generate tailings or waste rock, and requires less investment than conventional mining. However, this technique is put into use only when the ore is located between impervious soil layers such as in Kazakhstan and Mongolia. Expansion of processing KATCO produces 30,000th ton KATCO produces 40,000th ton capacity at Tortkuduk of uranium of uranium 2009 2010 2013 2016 2017 2019 KATCO becomes world’s KATCO reaches 4,000 tons Kazatomprom and Orano largest ISR operator per year annual output sign agreement for further development of KATCO 3 BUSINESS MODEL KATCO’s business model is designed to leverage the Company’s unique value propositions of implementing innovative technologies and effi cient cost structure to deliver on behalf of customers, while taking advantage of a skilled and competitive human resource base, delivering a globally competitive cost of production.