2015 Kumtor Environment and Sustainability Report
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ENVIRONMENT AND SUSTAINABILITY REPORT 2015 ABOUT KUMTOR MINE Kumtor Mine is the largest western-operated gold mine in Central Asia and has been operating since 1997, having produced approximately 10.42 million ounces of gold by the end of 2015. Kumtor Gold Company CJSC (KGC) is the license holder for the Kumtor deposit. About this Report This document is the Kumtor Annual Environment and Sustainability Report (AESR) for the 2015 financial year (ending December 31, 2015). This report is focused on the Kumtor Mine in the Kyrgyz Republic. Kumtor’s performance data include only Kumtor’s own operations, unless noted otherwise, although the policies of Centerra and Kumtor apply to both employees and contractors. Financial amounts are reported in US dollars (USD) unless The Kumtor open pit mine is located approximately 350 otherwise stated. kilometers southeast of the capital Bishkek and 60 kilometers north of the border with the People’s Republic of China. It is This report follows the format of the Global Reporting at an altitude of 4,000 meters above sea level in a partially Initiative (GRI), fourth generation (G4) Sustainability glaciated permafrost zone in the Central Tien Shan Mountains. Reporting Guidelines and GRI Mining and Metals Sector 2015 marked the nineteenth year of the Kumtor Mine operation Supplement (see www.globalreporting.org). and is in the Kyrgyz Republic, and the twelfth year under the parent written in accordance with the Core option. KGC has company Centerra Gold Inc. (Centerra). The estimated end of been reporting under GRI G3 standards from 2012. The the life of the Kumtor Mine is 2026. previous report of the Company was based on the 2014 financial/calendar year, was published in August 2015 and About Centerra is also available on our corporate website. In addition, this report also addresses the key reporting Centerra Gold Inc. is the parent company, which owns 100% requirements outlined in KGC’s Environmental of KGC. Centerra is a publicly listed, Canadian-based gold Management Action Plan. In determining the scope, mining company engaged in operating, developing, acquiring, content, and boundaries of this report, we considered and exploring gold properties in Asia, North America and other a materiality assessment process described in the markets worldwide. The Company is the largest Western-based Governance Section of this report. Please see our gold producer in Central Asia. Centerra has two producing gold Disclaimer Regarding Forward-Looking Statement also mines, one in the Kyrgyz Republic and the other in Mongolia. on the inside back cover. This report will also be available Centerra also owns 100% of the Gatsuurt development project in in the Russian and Kyrgyz languages. As we continue Mongolia and Öksüt Gold Project in Turkey, a 50% interest in the to further improve our systems and approaches, we Greenstone Gold Property (formerly the Trans-Canada Property) welcome your comments and suggestions on how we which includes the Hardrock Gold Project in north-western can further improve our annual environmental and social Ontario, Canada and has interests in exploration properties in reporting and practices. You can find contact details on Canada, Mexico, Mongolia, Nicaragua, Portugal and Turkey. the back cover of this report. Kyrgyzaltyn Open Joint Stock Company, a state owned entity, is Centerra’s largest shareholder, owning 77,401,766 common shares, representing 32% of the outstanding shares. Additional information on Centerra is available at SEDAR (www.sedar.com) and on the company website (www.centerragold.com). 2 G4-3, G4-4, G4-5, G4-6, G4-7, G4-8, G4-17, G4-28, G4-29, G4-30, G4-32 ENVIRONMENT AND SUSTAINABILITY REPORT 2015 CONTENTS About Kumtor mine 2 About this report 2 Message from the President 4 Operations Overview 8 Environmental and Sustainability Snapshot 10 4 ENVIRONMENT 4.1 Environmental Responsibility 40 4.2 Environmental Monitoring 42 4.3 Biodiversity 46 4.4 Energy Use and Carbon Emissions 49 1 GOVERNANCE 4.5 Air Emissions 52 4.6 Waste Management 56 1.1 Governance Model 12 4.7 Unprocessed Waste Rock 59 1.2 Sustainability Management 16 4.8 Tailings Management 60 1.3 Risk Management 16 4.9 Mine Closure 63 1.4 Materiality Assessment 17 1.5 Business Ethics 19 5 GLACIERS & WATER MANAGEMENT 2 ECONOMIC VALUE 5.1 Water Use and Treatment 66 5.2 Water Quality and Compliance 70 2.1 Economic Performance 20 5.3 Glacier Management 76 2.2 Local Procurement 22 6 SOCIAL RESPONSIBILITY 3 PEOPLE 6.1 Stakeholder Engagement 82 3.1 Workplace Practices 28 6.2 Community Investment Projects 90 3.2 Occupational Health and Safety 36 Glossary and Abbreviations 99 Performance Data 102 GRI Content Index 105 Appendix Environmental Monitoring Data 108 Disclaimer Regarding Forward Looking Information 124 ENVIRONMENT AND SUSTAINABILITY REPORT 2015 3 MESSAGE FROM THE PRESIDENT The Company’s key activities, accomplishments and challenges we faced in 2015 are described in this report. We beat our production guidance, moved into a new camp at the mine site, and became more efficient and cost conscious. We are looking forward to continue our improvements in all aspects of our operations. Contribution to the Kyrgyz Largest Private Sector Economy Employer KGC continues to contribute significantly to the economy KGC is the largest taxpayer and the largest employer of the Kyrgyz Republic. In 2015, our production accounted in Kyrgyzstan’s private sector. By the end of 2015, for 22.5% of Kyrgyzstan’s overall industrial output and we employed 3,741 Kyrgyz citizens - 97% of the full- 6.8% of GDP. In 2015, payments made within the Kyrgyz time workforce. In 2015 we continued to decrease Republic totaled $256 million making a total of $2.9 billion the number of expat employees, trying to promote since 1994. local professionals. Payments made within the Kyrgyz Republic in 2015 include more than $105 million in employee and contractor wages and benefits. 4 G4-1, G4-9 ENVIRONMENT AND SUSTAINABILITY REPORT 2015 We continue to promote and support local business, and in 2015, our company spent almost $59 million on local procurement. Many of the projects described in this report have Increasing Local Procurement brought together communities, other partners, We believe that the strategic approach to local international aid communities and government officials. procurement issues will not only benefit our company but We continue to make additional efforts to mobilize and also contribute to the development of local communities promote local entrepreneurs and business in the region. by creating more jobs and boosting the economy across the Issyk-Kul region. We continue to promote and support In 2015 we launched the Kumtor Ambassadors local business and in 2015, our company spent almost program to promote volunteering among employees $59 million on local procurement. and contractors thereby engaging one of our largest internal stakeholder group – our workers – into social projects within the Republic. We have volunteered more Stakeholder Engagement than 2,000 hours to social work and took part in more than 40 charity, volunteering and mentorship activities. The company continues to deepen its cooperation Some of other employees represented the Company in with all stakeholders. Our cooperation with local the Supervisory Boards of the community investment communities is being carried out through four regional programs, supported by the company and became information centres, located in Balykchy, Bokonbaev, mentors for students of local universities. Barskoon, and Kyzyl Suu. Kyzyl Suu Centre is the second centre in Jety-Oguz district. It was opened in 2015 in the district centre for the convenience of Community Investments local communities. The immediate purpose of these centres is to provide information relating to Kumtor Given that KGC is a key employer, taxpayer and operations, including details about social programs consumer of local goods and services in Kyrgyzstan, and community investments, employment procedures, the eventual closure of the mine is predicted to have human resources policies and vacancies. Regional negative effects on the Issyk-Kul region and national liaison employees visit local social events, monitor economy. To minimize such detrimental effects, our KGC-sponsored development projects and serve as a local community investment strategy is built on the link connecting the company with local communities. promotion and development of a diversified economy that would not be heavily dependent on Kumtor alone. In addition to the above structured activities, senior This approach is thought to help minimize negative management takes part in the regular meetings with effects of the Kumtor Mine’s decommissioning. It is representatives of local communities to discuss important for us that the various local companies which cooperation, inform about company’s plans, as well as currently supply goods to KGC, become sustainable to listen and address concerns raised by communities, businesses after the closure of the mine. represented by community and youth leaders, local authorities as well as representatives of small business We have launched a number of programs aimed at the and private farms. integrated development of the Issyk-Kul province. ENVIRONMENT AND SUSTAINABILITY REPORT 2015 G4-1 5 These are centered on the following four components: development of the agricultural sector; promotion of Health and Safety small and medium-sized business growth and diversity; We maintain our policy that no job is so important that collaboration with young people; and promotion of it cannot be done safely. In 2015, we spent more than educational and environmental initiatives. In 2015, we 71,628 hours on the promotion of health and safety contributed voluntarily a further $2 million in sponsorships training programs. Our statistics, such as reportable and community development programs. This report injury frequency rate, which was 0.21 in 2015, reflect the describes some of the programs we have voluntarily importance we attach to health and safety measures initiated and results we have achieved.