ENVIRONMENTAL RESPONSIBILITY

Our responsibility to the future generations requires an efficient pro- gram for the minimisation of the impact of PJSC ALROSA activities on the environment. We believe that the resources available and the lessons learnt in the sphere of environmental protection help us to reach environmental goals. ENVIRONMENTAL POLICY IMPLEMENTATION

The key tasks of the Environmental Policy of PJSC ALROSA are to ensure rational use of water and energy resources, monitoring of emissions of greenhouse gas and other polluting substances, effective recycling and disposal of waste, technical and biological reclamation of disturbed lands.

Our approaches

Regulatory documents, compliance with requirements

Environmental activities of PJSC AL- hensive Environmental Protection ROSA are carried out in accordance Program of PJSC ALROSA for 2011– with the Constitution of the Russian 2018. Federation, Federal Laws On Envi- ronmental Protection, On Protec- The Environmental Policy of the tion of the Atmospheric Air and On Company is integrated into sever- Industrial and Housekeeping Waste, al strategic documents (Long-term Water Code of the Russian Federa- Development Program of ALROSA tion, regulations of the Russian Fed- Group until 2023, Policy on Sustain- eration and the Republic of Sakha able Development and Corporate (Yakutia). Social Responsibility of PJSC ALRO- SA, ALROSA ALLIANCE Guidelines) The key documents regulating envi- and is aimed at minimising the im- ronmental protection activities al- pact of PJSC ALROSA production ac- so include the Environmental Policy tivities on the environment. of PJSC ALROSA and the Compre-

Environmental Management System

The Environmental Management Sys- al standard. In 2015, the Company tem of PJSC ALROSA was introduced passed a supervisory audit, in which in 2013 and it conforms to the ISO the validity of certificates of conform- 14001:2004 international standard ance to ISO 14001:2004 was verified. and GOST R ISO 14001-2007 nation-

62 Social and Environmental Report of PJSC ALROSA 2015 Environmental responsibility Our priorities

• Technical upgrade of produc- • Transition to underground ore tion aimed toward mining machin- mining to reduce the area of dis- ery with high emission levels, which turbed lands. will result in reduction of emissions of polluting substances and green- • Renovation and putting into op- house gas in the atmosphere. eration the treatment facilities to reduce discharge of polluting sub- stances in water bodies.

Principles

In 2015, we continued to integrate the • control over safety of technolog- principles of environmental responsi- ical processes and monitoring of en- bility, as set out in the Policy for Sus- vironment in the mining districts; tainable Development and Corporate Social Responsibility of PJSC ALROSA, • environmentally safe disposal of in the Company’s activities. waste;

• presumption of potential negative • liability for environmental pollu- impact of mining activities on the en- tion and compensation for damage; vironment, quality of life and health; • emergencies prevention and mit- • strict compliance with the nation- igation of the consequences; al environmental protection and safe- ty legislation; • respect for interests of the local population and indigenous people • conducting of an environmental and dialogue with them concerning audit and introduction of an environ- any production operations affecting mental management system; their traditional places of residence and use of natural resources; • priority of preventive measures over the measures to mitigate neg- • free access to, and transparency ative environmental consequences; of, environmentally important infor- mation. • application of the mining tech- niques best in terms of safety;

Social and Environmental Report of PJSC ALROSA 2015 Environmental responsibility 63 Joining international and national environmental protection initiatives

In 2015, PJSC ALROSA together with Framework Convention on Climate other Russian companies joined the Change. Cooperation of business Climate Partnership of Russia initi- representatives of all countries in or- ative signing the Russian business der to prevent global climatic prob- statement on the negotiation pro- lems will make it possible to create cess and adoption of a new climate mechanisms of managing the exist- agreement at the 21st Conference ing situation in terms of an increase of the Parties to the United Nations in greenhouse gas emissions.

Environmental policy objectives implementation

Key objectives of the environmental policy

Introduction of environmental • The focus of production and business activities on rational and efficient use of natural protection administrative resources through introduction of new technologies and innovation projects. management systems • Adoption of documents and policies conforming to sustainable development principles and international environmental management standards.

Rational use of resources • Implementation of the Energy Saving and Energy Efficiency Program of PJSC ALROSA for 2014–2016

• Conformance to the Environmental Policy of PJSC ALROSA at all stages of the production process

Reduction of negative impact • Implementation of a package of environmental protection measures in development on local ecosystems of new deposits • In-process environmental monitoring in structural subdivisions of the Company.

Сохранение биоразнообразия • Implementation of the Comprehensive Environmental Protection Program of PJSC ALROSA for 2011–2018. • Implementation of current (now being implemented) environmental activities program in 2015

ENVIRONMENTAL RISK MANAGEMENT

Environmental risk management in ural ecosystems but also to prevent the Company is carried out through- possible negative impacts. Effective out the entire production cycle, which environmental risk management is makes it possible not only to reduce one of the key principles of the en- environmental damage caused to nat- vironmental policy of the Company.

64 Social and Environmental Report of PJSC ALROSA 2015 Environmental responsibility Potential environmental risk management mechanisms

Risk description Major risk factors Measures for preventing risk development

Environmental accident risk • Natural and climatic conditions • Control of all stages of the production • Human factor process • Analytical monitoring

Risk of non-compliance with • Tightening of the environmental • Control over all stages of the production requirements of Russian environmental protection legislation process, informational monitoring of legislation • Acquisition of facilities (subsidiaries changes in the national legal framework and affiliates) causing substantial • Application in the Company structural damage to the environment units of changes in the legislation • Proximity of the production sites to specially protected natural areas (wildlife reserves).

MAIN ENVIRONMENTAL PROJECTS AND INITIATIVES OF PJSC ALROSA IN 2015

At the end of 2015, PJSC ALROSA announced results of the first large-scale project, Green Facets of a Diamond, a green initiatives contest. PJSC ALROSA together with the Ministry of Environmental Protection of the Republic of Sakha (Yakutia) and municipal and regional authorities proposed conducting of the Green Facets of a Diamond contest. The organising committee headed by the Chief Engineer of PJSC ALROSA considered projects submitted by 27 authoring teams in seven priority categories: Production Ecology. Innovative Eco- Efficient Technologies, Waste Management, Vegetation Conservation, Biodiversity Conservation, Water Bodies Protection, Sustainable Development of Populated Localities, Ecological Education and Awareness Development. Children’s Ecological Projects. All the contest applications were reviewed at a meeting of the Scientific and Technical Council of Yakutniproalmaz Institute of PJSC ALROSA. The best creative projects reached the final stage of the contest where winners and runners- up were announced. Seven projects were nominated for cash prizes. The contest winners were authors of two projects, recognised by the organising committee as having best taken into account applicability and had carried out the most careful examination of all details: “Development of a technological approach to reclamation of the first and second stage tailing dumps of PJSC ALROSA” and “Reclamation of disturbed lands in the flood basin of the Irelyakh River”. All finalists of the contest were awarded diplomas of merit.

Social and Environmental Report of PJSC ALROSA 2015 Environmental responsibility 65 In 2015, the following works were Udachny, and the settlement of Ai- performed: khal;

• comprehensive ecological mon- • introduction of new technolo- itoring of the environment (atmos- gies for recycling and disposal of phere, hydrosphere, lithosphere, used oils; flora and fauna) in the areas of PJSC ALROSA production activities; • search for and introduction of in- novative technologies in the sphere • continuation of renovation and of handling waste production and construction of sewage treatment consumption. facilities in the towns of Mirny and

Dialogues on ecological issues at the project design stage

In 2015, PJSC ALROSA started pre- Wild reindeer autumn migration In 2007 ALROSA paratory works aimed at devel- routes are located in the vicinity discovered opment of Verkhne-Munskoe, a of the construction site location, Verkhne- new diamond deposit located in so measures were taken to pre- Munskoe diamond Olenyoksky Evenki National District, vent the technological process of deposit located 170 km from the town of Udachny. ore transportation from negatively in Olenyoksky For several years, specialists of the impacting the reindeer. In the rein- District of the Company calculated and verified deer migration zone, low-angle road Sakha (Yakutia) an environmentally-friendly meth- slopes and a special regime for the Republic. od of developing Verkhne-Munskoe personnel going outside bounda- ore field, being aware of the impor- ries of the enterprise will be intro- In 2015 tance of preserving the unique en- duced. Posts with light-reflecting ALROSA started vironment, considered an asset of mirrors and an imposed speed lim- preparatory the Olenyoksky District, where the it will become a mandatory require- works aimed at population is engaged in reindeer ment for drivers at certain sections development of husbandry, hunting and fishing as of the road. Animals cross the road the field. traditional subsistence activities for site between September 20 and Oc- inhabitants in northern territories. tober 16 and at this time there will be no traffic at all. A ban on cull- In order to minimise the potential ing wild reindeer is imposed. Migra- adverse impact on the fragile en- tion of animals in the vicinity of the vironment it was decided that con- road is monitored using radio track- struction of processing facilities at ing collars. Verkhne-Munskoe deposit would be halted and the ore processed at pro- The planned subsoil and environ- cessing plant No. 12 of the Udachny mental protection activities include Mining and Processing Division where open pit mine space optimisation it will be transported on road trains through maximum utilisation of along the all-season road. the rock strength properties, opti-

66 Social and Environmental Report of PJSC ALROSA 2015 Environmental responsibility misation of the procedure for and tion of a mining enterprise at Ver- At the beginning time schedule of the stripping and khne-Munskoe deposit was held. of 2016, a mining works, optimisation of the Based on results of the hearing, it public hearing overburden piling parameters with was decided that development of concerning parallel rehabilitation of the sur- Verkhne-Munskoe deposit will have assessment face of the filled up overburden no significant negative impact on of impact on piles and utilisation of the over- the environment. environment in burden for construction and main- construction tenance of temporary roads and as The public hearing took place in the of a mining the bedding for facilities under con- settlement of Olenyok as a part of enterprise at struction. the Days of Mirny district celebra- Verkhne-Munskoe tion in the Olenyoksky ulus, with deposit was held. At the beginning of 2016, a public participation of representatives of hearing concerning assessment of regional and local authorities, PJSC impact on environment in construc- ALROSA and the district population.

STRUCTURE OF MANAGEMENT IN THE SPHERE OF ENVIRONMENTAL PROTECTION

The First Vice President, Executive Di- environment makes it possible to There is an rector of PJSC ALROSA, is responsible monitor changes over time of the environmental for successful management of envi- operation-specific data concerning protection section ronmental activities, the Chief En- environmental aspects. in each structural gineer of the Company coordinates subdivision of the environmental works and the Occu- Each area of daily environmental Company pational Health and Safety Depart- activities is monitored by govern- ment, whose structure includes the ment agencies of federal or region- Environmental Protection Division, al level. The supervisory authorities provides day-to-day management. exercising control over compliance with the Water Code of the Russian In each structural subdivision of the Federation are the Lena River Ba- Company there is an environmen- sin Water Directorate of the Federal tal protection section (designated Water Resources Agency, the Water specialist) responsible for monitor- Relations Department of the Rus- ing compliance with requirements sian Federation and the Federal Ser- of the legislations, regulations and vice for the Supervision of Natural corporate standards in the sphere of Resource Usage. environmental protection as well as implementation of the environmen- Environmental impact assessment tal policy of the Company. covering toxicity of the waste stored at production sites of the Company The annual analytical report on as- is carried out by specialists of the sessment of the impact that pro- water toxicology laboratory at the duction activities of the Company Institute of Biology of Irkutsk State structural subdivisions had on the University.

Social and Environmental Report of PJSC ALROSA 2015 Environmental responsibility 67 The Company has in place an effi- al ecology sphere. RUB 5.972 mn ciency assessment system for each were allocated for these purposes 5.972 area of environmental activities that in 2015. Our specialists attend semi- mn RUB were is based on the established activity nars and specialised courses and are allocated to assessment criteria goals. trained in matters of environmen- professional tal safety in the workplace and en- development Annually, we invest in profession- vironmental protection, I–IV hazard and training of al development and training of the class waste handling and utilisation. the employees employees working in the industri- working in the industrial ecology sphere.

The high level of preparedness of the Company units responsible for environmental wellbeing was evidenced by the accident at the tailing dump of plant No. 5 in the town of Mirny

In November 2015, a landslide of backfill the landslide material in sand and clay occurred near the the tailing dump and determine tailing dump of plant No. 5 (the town toxicity of the waste. Based on of Mirny). PJSC ALROSA established the investigation results, the an emergency response centre to possibility of adverse impact on the mitigate the consequences of the environment was excluded and the accident. All the necessary units analysis confirmed that the tailings and specialists were engaged in the fall under V hazard class and are not emergency response operations, a toxic. The damage by PJSC ALROSA bypass road along Anabar road was to the ecosystem is considered to created, works were carried out to be minimal.

68 Social and Environmental Report of PJSC ALROSA 2015 Environmental responsibility KEY PERFORMANCE INDICATORS 2015

3, 442.5 mn RUB Current environmental expenses

2,588.7 mn RUB Investment in the fixed capital allocated for environment protection and rational use of natural resources

21.4 thousand GJ Electrical energy conservation

3.3% Reduction of specific energy consumption for mining one carat

In 2015, ALROSA joined the “Climate partnership of Russia” initiative

Social and Environmental Report of PJSC ALROSA 2015 Environmental responsibility 69 FUNDING OF ENVIRONMENTAL PROTECTION ACTIVITIES 6 PJSC ALROSA believes that environ- ed to RUB 6,031.1 mn, which is 1.2% bn RUB were mental expenses are investments more than in 2014, while the cur- invested in in life and wellbeing of future gen- rent (operating) expenses increased environmental erations and annually invests sig- by 12.1% compared to 2014 and in- protection nificant funds in environmental vestments in the fixed capital de- actitivies in 2015 activities. In 2015, investments in creased by 10.9%. environmental protection amount-

Breakdown of environmental expenses in 2011–2015, RUB mn

Expenditure item 2011 2012 2013 2014 2015 2011–2015 Current (operating) expenses 2,135.2 2,630.9 2,637.3 2,844.0 3,187.3 13,434.7 Payment for environmental protection services – 86.2 64.1 164.0 178.6 492.9 Costs of major repairs of fixed assets intended for nature 48.4 4.9 70.9 47.6 76.6 248.4 protection purposes Current environmental expenses, total 2,183.7 2,722.0 2,772.3 3,055,7 3,442.5 14,176.2 Investment in the fixed capital 506.1 655.1 3,904.3 2,904.8 2,588.7 10,559.0 TOTAL 2,689.7 3,377.1 6,676.6 5,960.5 6,031.1 24,735.0

In 2015, funding of the Compre- terprise of PJSC ALROSA, which will Operating hensive Environmental Protection constitute the basis for establish- expenses in Program of PJSC ALROSA for 2011– ing a subsidiary company. Further environmental 2018 totalled RUB 2,890.4 mn, most on, the treatment facilities, as non- protection of the funds (RUB 1,437.2 mn) were core asset of the housing and utili- increased by allocated to construction of envi- ty complex, will be handed over to ronmental protection facilities and municipalities in accordance with an 12.1% completion of renovation and con- order of the President of the Repub- in 2015 struction of sewage treatment fa- lic of Sakha (Yakutia). Taking into cilities in the towns of Lensk and account our approach to responsi- Udachny and the settlement of Ai- ble conduct of business and taking khal (RUB 1,157.4 mn). care of the population of the regions where the Company operates and Currently the sewage treatment fa- its personnel, PJSC ALROSA volun- cilities are handed over by struc- tarily incurs capital expenditures on tural subdivisions of the Company the facilities that will not be oper- to the heat and water supply en- ated by the Company in the future.

70 Social and Environmental Report of PJSC ALROSA 2015 Environmental responsibility Breakdown of the current (operating) expenses associated with environmental activities in 2011–2015, based on the type of environmental activity, RUB mn.

Measures 2011 2012 2013 2014 2015 2011–2015 TOTAL 2,135.2 2,630.9 2,637.3 2,844.0 3,187.3 13,434.7 Protection of atmospheric air and climate change 350.6 122.1 126.7 86.9 84.8 771.1 prevention Sewage collection and treatment 1,406.1 1,599.0 701.6 908.3 989.3 5,604.3 Waste handling 338.1 155.4 324.6 352.4 382.7 1,553.2 Land, surface and underground water protection and 40.4 714.3 1,429.9 1,456.3 1,680.5 5,321.4 rehabilitation Protection of the environment against noise, vibration – 0.036 0.382 0.351 0.546 1.315 and other physical pollution Radiation safety of the environment – 0.08 – – 0.012 0.092 Biodiversity conservation and protection of natural areas – – – 0.372 0.705 1.077 Research and development activities and projects – 39.6 44.8 27.6 15.5 127.5 to reduce negative anthropogenic impact on the environment Other environmental activities – 0.418 9.3 11.9 33.1 54.718

INVESTMENT IN ENVIRONMENTAL PROTECTION

PJSC ALROSA continues investing • renovation of sewage treat- in environmental activities and en- ment facilities in the towns of Mirny, vironmental protection projects. Udachny and Lensk and the settle- The total amount of the Company’s ment of Aikhal; own funds spent on environmental protection activities in 2011–2015 • construction of injection wells in amounted to RUB 10,558.9 mn. the quarry and drain water reinjec- tion system (Internatsionalny and Ai- In 2015, investments in environ- khal underground mines); mental activities amounting to RUB 2,588.7 mn made it possible to im- • renovation of the mine and plement the following projects: drain water injection system at Lev- oberezhny prospect; • construction of a drainage unit and pumping station at Internatsion- • expansion of dry tailings dump alny and Mir underground mines; of plant No. 16 of Nyurba MPD.

Social and Environmental Report of PJSC ALROSA 2015 Environmental responsibility 71 Payments for emissions (discharges) of polluting substances and disposal of production and housekeeping waste in 2011–2015

35.9 34.2 23.6 53.7 128.9

78.9 64.0 85.9 70.1 77.4

64.1 65.8 76.4 36.0 46.3

2011 2012 2013 2014 2015

Admissable payments, % Above-level payments, % Total payments, RUB mn

ENVIRONMENTAL PAYMENTS

In 2015, environmental payments of industrial and household waste for allowable emissions (discharges) compared to 2014 amounted to of polluting substances and the 44.1%, which is connected, in the emissions (discharges) exceeding first place, with revision of the the permitted level and disposal of previously effective hazardous production and housekeeping waste industrial and household waste amounted to RUB 85.9 mn, which certificates, based on regulations of is 33.4% less that in the previous the Government and the Ministry of year. Reduction of payments for the Natural Resources and Environment emissions (discharges) exceeding of the Russian Federation which the permitted level and disposal came into effect on 01.08.2014.

72 Social and Environmental Report of PJSC ALROSA 2015 Экологическая ответственность ENVIRONMENTAL PROTECTION GOALS ACHIEVEMENT

WATER AND RATIONAL USE OF WATER RESOURCES

Rough diamond production and pro- In the reporting year, fresh wa- In 2015 the cessing volumes of PJSC ALROSA in- ter extraction from natural sourc- water usage level volve a significant volume of water es amounted to 21.07 mn cub. m, decreased by usage. High levels of achievement which is 26.8% less than 28.77 mn and the Company’s status as leader cub. m of the allowable water ex- 10.5% of the global diamond mining indus- traction in 2015, and is related to compared to 2014 try engender greater responsibility the change in the initial water use figures for water resource conservation, re- (withdrawal from the Heating and duction of water extraction, multiple Water Supply Company and creation scale water usage in technological of a limited liability company). processes. The water usage level of PJSC ALRO- Water extraction sources are surface SA in 2015 amounted to 19.33 mn cub. (99.8%) and underground (0.2%) wa- m, decreasing by 10.5% compared to ter bodies. In 2015, water extraction 2014, due to reduction in the level of for structural units of the Company water usage for production (8.5%) and located in the Republic of Sakha (Ya- housekeeping (0.6%) needs. kutia) was performed at the Irelyakh, Malaya Botuobiya, Lena, Olenyok, Vi- Reduction of water use compared to lyuy, Taas-Yuryakh, Bolshaya Botuobi- water extraction volume is achieved ya, Ongkhoi and Sokhsolookh rivers, through recycling water supply and Irelyakhskoe and Sytykanskoe wa- water reuse. Compared to 2014, re- ter reservoirs, water reservoirs at the cycling water supply volume in 2015 Markha River and the left tributary increased by 3.1% and amounted to of the Khannya River, Oyuur-Yurege 140.42 mn cub. m, while water reuse Creek and lake Sordonnookh as well increased by 7.5%, amounting to 77.63 as at underground artesian wells. mn cub. m. Recycled and reused water volume amounted to 218.05 mn cub. m per year, which 11.3 times exceeds the total water extraction volume.

Specific volume of water consumption (production needs) to produce one carat in 2011–2015, cub. m/carat

0.60 Efficient production is the basis of en- 0.53 0.48 0.46 vironmentally responsible use of wa- 0.42 0.40 ter resources. 0.40 In 2011-2015, specific water con- sumption for production needs de- 0.20 creased by 24.5%.

0.00 2011 2012 2013 2014 2015

Social and Environmental Report of PJSC ALROSA 2015 Environmental responsibility 73 DISCHARGES AND WASTE

In 2015, we continued renovation Over a half of water discharge of sewage treatment facilities in volume (51.7%) was discharged the towns of Mirny, Udachny and underground, 42.1% to surface Lensk and the settlement of Aikhal. water bodies and 6.2% to headers, Water disposal by the Company tailing dumps and tailing ponds. in 2015 totalled 30.1 mn cub. m.

Discharge of waste water and polluting substances into surface water bodies in 2011–2015

20.0 In 2011-2015, discharge 16.7 16.8 15.4 of polluting 16.0 14.5 substances 12.7 contained 12.0 in waste water in surface water bodies decreased 8.0 by 26.2%. 6.5 6.0 5.6 4.6 4.8 4.0

0.0 2011 2012 2013 2014 2015

Discharge of waste water into surface Discharge of pollution agents into surface water bodies (mn cub. m) water bodies (thousand tons)

In handling production and house- throughout the Company totalled keeping waste, the Company aims 82,639,358.8 tons. at reducing volumes and using new technologies for neutralisation and Most waste (99.998%) is IV and V disposal to minimise negative im- hazard class waste (barren rock and pact on the environment. tailings) posing little threat to the environment. Structural units of PJSC ALRO- SA generated 95 types of waste In the reporting year we used in 2015. Waste generation during 22,745,656.1 tons of V hazard class 2015 decreased compared to 2014 waste for construction of roads by 8,080,003.7 tons (8.9%) and (road bedding), sites and dams as

74 Social and Environmental Report of PJSC ALROSA 2015 Environmental responsibility well as for preparation of the fill for The proportion of used and neutral- reclamation of the northern bank of ised in-house production and con- Udachny open pit mine, the site for sumption waste amounted to 28% the КСА plant, and for technical rec- of the waste generated in 2015. lamation of abandoned sections of Irelyakhskaya placer.

Disposal and utilisation of production and housekeeping waste

Hazard class Waste Disposal and utilisation

I, II, III hazard class Mercury-containing waste and fluo- Part of the waste is transferred to a specialised enter- (0.002%) rescent lamps, waste batteries, elec- prise – Ecologiya Prom Service CJSC, for subsequent trolyte waste (sulphuric acid), oil neutralisation and disposal. product waste (waste oils of differ- Part of the waste is neutralised at internal enterprises: ent grades), laboratory waste. used petroleum products are utilised as a fuel for boiler houses, for lubrication of road construction equipment and pumping equipment, in bitumen-concrete mixture production; waste oils, sludge, oil and other petrole- um-contaminated filters are disposed using Forsazh-2M modern mobile units.

IV hazard class Scrap tires and air tubes, wood scrap, Part of the waste is utilised at the Company’s own en- (0.126%) weld slag, ash and slag waste from terprises: tires are used for reinforcing side slopes of coal combustion, waste from me- roads, arranging lawns; wood scrap is stored and used chanical and biological waste water for housekeeping needs, ash and slag waste is spread treatment, other housekeeping waste on roads and car testing tracks in winter. (sweepings). Subject to an agreement, some parts of tires and air tubes are transferred to CJSC Ecologiya PromService for disposal; solid housekeeping waste and other mu- nicipal waste is moved to an authorised waste landfill.

V hazard class Rubber-metal waste, black metal Some waste is stored at production sites in specifically (99.872%) scrap, overburden rock, tailings, paper designated locations, some is given to other enterpris- and cardboard waste from clerical and es, some is used in production activities: overburden record keeping activities, kitchen and and tailings are used for arrangement of dams and earth catering waste, wood scrap, non- fills for dredges, construction works, technical reclama- contaminated broken glass, other tion of disturbed lands, road bedding and maintenance. waste from the mining facilities

Social and Environmental Report of PJSC ALROSA 2015 Environmental responsibility 75 Specific volume of waste generation to produce one carat in 2011–2015, t/carat

3,100 3,055 99.9 % 3,000 of waste generated by structural 2,879 2,900 subdivisions of PJSC ALROSA is IV 2,800 and V hazard class 2,748 wastes (saline and non-saline 2,700 2,663 barren rock and 2,608 2,600 tailings) that do not significantly impact on natural 2,500 ecosystems.

2,400

2,300 2011 2012 2013 2014 2015

EMISSIONS

PJSC ALROSA strives to reduce neg- At the first stage of the Concept ative impact on the environment implementation an NGV refill sta- from emissions of polluting sub- tion was constructed. The Company stances in the atmosphere. started conversion of vehicles, min- ing and road construction machin- The Company developed and, in ery to gas fuel; natural gas vehicles 2015, adopted the Concept of in- were purchased under the technical troducing an action plan on cars, upgrade program. mobile vehicles and diesel power plants switching to liquefied natural During the reporting period, emis- gas (hereinafter referred to as the sions of polluting substances in the Concept), which will reduce emis- atmosphere from stationary sourc- sions of harmful substances into the es amounted to 9.4 thousand tons, atmosphere and noise impact on the which is 104% compared to 2014, environment. while emissions from stationary sources in the fuel and energy sec- tor was 88% compared to 2014.

76 Social and Environmental Report of PJSC ALROSA 2015 Environmental responsibility Emissions of polluting substances Specific volume of polluting in the atmosphere in 2011–2015, substances emissions in the thousand tons atmosphere per mining of one carat in 2011–2015, thousand tons/carat

10.0 0.30 0.30 0.30 7.0 0.28 0.27 6.3 6.6 5.6 0.26 8.0 5.5

0.20 6.0

4.0 0.10 3.0 2.6 2.4 2.4 2.4 2.0

0.0 0.00 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015

Gaseous and liquid substances Solid substances

The Company implements short and • reduction in the number of die- long-term activities aimed at reduc- sel and petrol internal combustion tion of negative impact: engines through conversion of ve- hicles to compressed and liquefied • reduction in the use of non-re- natural gas; newable energy sources through the use of vacuum solar collectors, in- • reduction in energy consumption troduction of solar lighting system, (oil, coal, diesel fuel) for processing installation of solar panels for gen- and housekeeping needs through erating electricity; replacement of the fuel used by boiler plants with natural gas.

Social and Environmental Report of PJSC ALROSA 2015 Environmental responsibility 77 GREENHOUSE GAS EMISSIONS

Climate change is a global problem, the Action Plan on Development of the solving of which should involve the Legal and Regulatory Framework. all industrial enterprises that have In 2013, PJSC ALROSA reaffirmed an impact on the atmosphere its ongoing commitment to the along with both global and state problem of climate change by participation developing the Guidelines for In September 2013, the President Calculating the Volume of Carbon of the Russian Federation signed a Dioxide Emissions from Stationary Decree On Reduction of Greenhouse and Mobile Sources of PJSC ALROSA Gas Emissions and the Government Enterprises (hereinafter referred to issued an executive order approving as the Guidelines).

The Guidelines are aimed at ensur- Among the measures taken that led ing measurement and recording of to reduction of direct emissions of greenhouse gas emissions from the СО2, it is worth mentioning the fol- technological equipment, processes lowing: and production activities of structur- al subdivisions of the Company, which • upgrade of the heavy vehicles will contribute to further develop- fleet at the Lensk production site, ment of the corporate greenhouse gas which led to reduction of diesel fu- emissions management system. After el consumption; the end of the 2014 calendar year, trial calculations of greenhouse emissions • reduction in fuel consumption from structural units of PJSC ALROSA due to reduction in the number of were made. vehicles rented by the heating and water supply enterprise; In 2015, greenhouse emissions sources were inventoried and the • decommissioning of the boiler calculation of greenhouse emissions house at the airport in the town of for 2014 was adjusted. Mirny;

Based on the Company performance • handover of the portable auto- results in 2015, greenhouse gas matic boiler (town of Lensk) from emissions calculated in accordance the balance sheet of Mirny Automo- with the Guidelines totalled 905.5 bile Roads Division (structural sub- thousand tons (100.2% compared divisions of the Company) to new to 2014 and 74.1% compared to the ownership under the Lensk Town base year), of which: Heating and Electric Networks En- terprise LLC; • 853.8 thousand tons of direct greenhouse gas emissions; • reduction in consumption of nat- ural gas at Mirny Mining and Pro- • 51.8 thousand tons of other cessing Division, which is due to greenhouse gases (methane, nitro- natural and climatic conditions. gen oxide) in CO2 equivalent.

78 Social and Environmental Report of PJSC ALROSA 2015 Environmental responsibility Groups of PJSC ALROSA structural subdivisions and processes generating the most significant volumes of carbon dioxide emissions, 2014–2015

Groups of structurals by emissions generation, %

5.7 1.2 0.5 5.8 0.8 0.4 7.9 6.5 38.2 41.5

2014 2015

46.5 45.4

Termal power Mining Transportation Geological Other Capital entrerprises and processing and procurement survey expeditions Construction plants division Division

Emissions generating processes, %

0.6 3.4 1.0 5.1

33.6 31.3 2014 2015 65.1 62.6

Stationary fuel Fuel combustion Mining activities Methane emission combustion for vehicles when excavating

Social and Environmental Report of PJSC ALROSA 2015 Environmental responsibility 79 ENERGY CONSERVATION

The Energy conservation and energy efficiency improvement program of PJSC 149,358 ALROSA for 2014–2016, in conditions of large-scale energy resource consumption, thousand RUB allows us to achieve sustainable and effective use of these resources, as well as were allocated to minimise the possible negative impact on the environment. to energy The Concept of energy conservation and increased energy efficiency of PJSC conservation and ALROSA for 2013–2021 allows us to set the long-term objectives in the field of energy efficiency sustainable energy consumption. improvement activities

The Federal Law On Energy Con- • introduction of innovative SO- servation and Energy Efficiency LATUBE solar lighting system at the Improvement, the State Program design stage of a new construction of the Russian Federation Ener- facility; gy Conservation and Energy Effi- ciency Improvement for the Period • gradual replacement of motor up to 2020, as well as the devel- fuels by natural gas (the goal of oped internal regulatory documents this project, on which activity com- are conceptual for the Company in menced in 2014, is the transfer to terms of implementation of key ini- use of natural gas in mining, engi- tiatives aimed at rational use of nat- neering, public transport and pow- ural resources. er engineering facilities which are involved in production activities at The Company is striving to conserve Mirny, Udachny, Aikhal, Lensk and energy resources through imple- Verkhne-Munskoe production sites); mentation and introduction of in- novative methods and technologies. • connection to the Orto-Nakhara village (Lensk District) centralised Priority activities of PJCS ALROSA energy supply. aimed at energy conservation are as follows: In 2015, we significantly increased funding for energy conservation • use of high-voltage switchgears and energy efficiency improve- with SF6 gas insulation; ment, the sum of financial invest- ments amounted to RUB 149,358 • introduction of energy conser- thousand, from which RUB 12,273 vation equipment at all production thousand were allotted toward ful- sites; filment of organisational measures and RUB 137,085 thousand went to- • use of energy efficient light ward technical initiatives. sources and LED technologies;

80 Social and Environmental Report of PJSC ALROSA 2015 Environmental responsibility Specific energy consumption for the mining of one carat, 2011–2015, G J/carat

0.34 0.334 In 2015, specific 0.33 0.323 0.323 energy resources 0.32 0.317 consumption to 0.31 produce one carat 0.30 0.298 decreased by 3.3% 0.29 0.28 2011 2012 2013 2014 2015

Implementation of technical measures for energy conservation and improvement of energy efficiency in 2011–2015

Areas Measures 2011 2012 2013 2014 2015 Electric energy • Installation of variable frequency drives, infrared 57.2 37.1 21.9 7.1 21.4 conservation heaters, motion sensors, energy-efficient lamps and starting thousand thousand thousand thousand thousand regulators GJ GJ GJ GJ GJ • Installation of line-conditioning filters, optimisation of power equipment operations, regulation of lighting systems, thermal screens, and supply-exhaust ventilation • Replacement of worn pumps, ventilators, drying furnaces, and energy-efficient compressors Thermal energy • Installation of thermal power consumption meters 23.6 13.8 19.8 1.3 13.5 conservation • Automation of heating station performance monitoring thousand thousand thousand thousand thousand GJ GJ GJ GJ GJ Fuel saving • Installation of fuel consumption meters, installation of 39.3 8.3 14.5 21.5 12.8 ovens and spent machine oil-fired boilers thousand thousand thousand thousand thousand GJ GJ GJ GJ GJ Water saving • Introduction of new technologies and equipment – – 14.5 7.7 238.6 (KÄRCHER car wash stations, non-contact tap and shower thousand thousand thousand panels) cub. m cub. m cub. m • Optimisation of water supply configuration

PROTECTION OF LAND RESOURCES

As part of the Comprehensive Program of Measures for Environmental Protec- tion aimed at the restoration of disturbed land and technical and biological recultivation, the Company invested RUB 61.3 mn in 2015. Reclamation of land was carried out in Olenyok, Mirny, Suntar and Nyurba districts.

The total area of disturbed and reclaimed land, 2011–2015., ha

3,000.0 In 2011-2015, 2,438.3 2,853.0 2,500.0 2,394.3 reclaimed lands 2,000.0 1,932.5 1,570.9 area totaled 1,500.0 1,343.9 1,307.2 1,443.4 1,414.3 1,132.3 8,373.9 ha 1,000.0 500.0 0.0 2011 2012 2013 2014 2015

Area of disturbed lands, ha Area of reclaimed lands, ha

Social and Environmental Report of PJSC ALROSA 2015 Environmental responsibility 81 BIODIVERSITY PRESERVATION

PJSC ALROSA developed a set of mental Protection for 2011–2018, measures to provide the most fa- in 2015 financial support for biodi- vourable conditions for preservation versity preservation was RUB 6.6 of biological diversity in the territo- mn. These funds were distributed ry of the primary region where the as follows: RUB 3.9 mn toward the Company operates – in the Repub- running of the Living Diamonds of lic of Sakha (Yakutia). Yakutia nature park and RUB 2.7 mn toward reservoir fish stocking. The Company does not operate in the territories with special conserva- The Living Diamonds of Yakutia tion area status at either a federal or nature park is a unique large-scale regional level, and it complies with project created in 2009 with the fi- the legal requirements for environ- nancial support of PJSC ALROSA in mental conservation and compen- partnership with the Ministry of Na- satory measures at the plant design ture Protection. The park is inhab- and facility construction stages. ited by: musk oxen, yaks, red deer, spotted deer, bears, peacocks and As part of the implementation of rabbits. Recently the park acquired the PJSC ALROSA Comprehensive four reindeer which were brought Program of Measures for Environ- from the Olenyok district.

82 Social and Environmental Report of PJSC ALROSA 2015 Экологическая ответственность ENVIRONMENTAL ACTIVITY OF SUBSIDIARIES OF PJSC ALROSA

Key Activities and Environmental Performance Indicators of PJSC ALROSA Subsidiaries in 2015

PJSC SEVERALMAZ PJSC ALROSA-Nyurba JSC ALMAZY ANABARA

• RUB 12.9 mn were assigned toward the • In 2015, expenses for environmental • The environmental management sys- implementation of environmental pro- conservation measures, including pay- tem in accordance with ISO 14001:2004 tection activities. ments for emissions and disposal of in- and GOST R ISO 14001-2007 Rus- • The payments for emissions, discharg- dustrial waste amounted to RUB 13.1 mn, sian national standard was implement- es and industrial and household waste which exceeded the figure from the pre- ed, non-profit organisation certificates disposal amounted to RUB 22.6 mn, the vious year by 1.85 times. were issued by the National Certifica- majority of which went towards payment • during 2015, a survey and creation of a tion Chamber. for industrial waste disposal (overburden pilot plant reinjection site for mineralised • Implementation of the Environmental equating to hazard class V waste). brines of Nyurba and Botuobinsky open Measures Program of JSC Almazy Anabara • An inspection of the environmental pit mines were carried out. Following a for 2013–2016. management system at PJSC Several- state-expert-conducted review, project • Implementation of the Program for En- maz was carried out. documentation for the construction and vironmental Baseline Assessment Study • Public consultations with the local res- production of the reinjection site will be and Environmental Monitoring in the Ar- idents of Primorsky District and the state developed. ea Affected by Mining Industries. environmental expertise on the project • In 2015, an up-to-date biological waste • Industrial waste disposal (transport for development of sand and Shocha treatment station – the ЛКОУ-600 (local and forwarding, construction and min- sand-and-gravel mix deposits. sewage treatment plant) model with an ing waste) at the special-purpose facili- • Operational environmental monitor- estimated cost of RUB 211 mn, was put ty, taking into account types of waste and ing in the form of natural ecosystems ob- into operation at the Nakyn crew camp. storage methods, and the use of waste in servations: air, water and land resources • In 2015, the state environmental ex- enterprise construction works. monitoring was carried out. pert review of the Engineering project • The carrying out of biological reculti- ALROSA-Nyurba Diamond Mining En- vation of disturbed land. terprise was carried out. Botuobinskaya pipe. Open pit mining up to a depth of –330 m; received positive feedback from the state committee of environ- mental experts (approved by Order No. 749 dated 01.09.2015 of Administration of Rosprirodnadzor (Federal Service for Supervision of Natural Resource Usage) for the Republic of Sakha (Yakutia)). • The work on monitoring and geologi- cal environment protection (groundwa- ter monitoring) was continued in order to study the mode, dynamics, groundwater resources characteristics and the condi- tion of the geological environment.

Social and Environmental Report of PJSC ALROSA 2015 Environmental responsibility 83