What is gold’s value? Letter from the CEO

We at Argor-Heraeus have always given equal value to sustainability and the materials we process. A value that is reflected in the way we all work every day, and that we have now decided to make official in this document. What led us to this decision? Time has shown that we have taken the right path: we are a mature Company, assuming our responsibilities for our economic, social, and environmental impact. Nevertheless, to be socially responsible for all purposes and effects we have understood that it is essential to go beyond the limits of our organisation and that of our business partners. We must transmit our commitment to institutions, to the public, and to the media, i.e., to everyone for which Argor-Heraeus’s commitment to sustainability may have value.

Therefore, this first Sustainability Report stems from our desire to offer society at large a presentation made of words, numbers, and images that explain our social-environmental commitment and provide a trans- parent assessment of whether our annual goals for improvement have been achieved. With this important promise, we all pledge to improve the sustainability and efficiency of a market on which we have operated for sixty years.

2 3 ARGOR-HERAEUS SA Overview Via Moree 14 Guide to the report 6 CH-6850 Tel. +41 91 640 53 53 Our history 8 Fax +41 91 646 80 82 Our shareholders 10 [email protected] The Group 11 Corporate governance 12 Our operations 13 Accreditations and recognitions 14 Our stakeholders 16 Our approach to sustainability 20

Economic responsibility Distribution of added value 22 Suppliers of services and accessory products 24 Our customers 26 Environmental responsibility Water consumption 28 Chemical consumption 32 Energy consumption 36 Emissions 40 Waste material, packing materials, noise 42 Social responsibility Composition of personnel 44 Health and safety at the workplace 48 Training 50

Activities with our stakeholders 52

4 5 Guide to the report

Scope. In this Sustainability Report, The value of the report’s contents is completeness: we selected indicators This report is organised in two macro - The annual report, organised by first edition, we have chosen for reasons the first such report by the Argor-Heraeus ensured by a careful preliminary that provide a complete picture of sections: the first is descriptive, and subject matter (for example: water con- of completeness to report particularly Group, we have decided to concentrate analysis, which led to selection of the the economic, social, and environmental offers a brief profile of the Company sumption, use of chemicals, etc.), first significant events in terms of social- on Argor-Heraeus SA. performance indicators most represen- impacts generated by our Company; (from historical outline to corporate provide quantitative data in absolute environmental impact, even if occurring We believe that the exclusion of our tative of the Company’s impacts on significance: for many years, Argor- governance) and a general picture of terms for an overall view of the impact outside such three-year horizon. affiliates Argor-Heraeus Deutschland, economic, social, and environmental Heraeus has compiled an enormous its stakeholders, with emphasis on of our business. Then (where possible) Argor-Heraeus Italia, and Argor-Aljba systems. Specifically, these indicators amount of information concerning the impacts that Company operations we have tried to relate such values will not compromise the completeness comply with the following criteria: the processes it performs. In order to have on such parties and how Argor- to a parameter (for example: production) of the report, given that our headquarters provide a full but concise description Heraeus manages relations with them. able to measure the efficiency of in employs almost 90% to our stakeholders, we selected The second regards the Company’s our performance trend. As a rule, such of our personnel and processes all of the indicators we consider the most annual report, with details of economic, quantitative data cover a three-year the Group’s precious metals. significant and indispensable for social, and environmental results period; this horizon will be maintained Nevertheless, we intend to include all of forming an opinion/assessment of achieved in the reference period. in future reports. Because this is the our affiliates in subsequent editions. performance in each area; measurability: quantitative indicators will be comparable from year to year.

6 7 Our history 1951 1973 1986 1988 1999 2002 2004 2005 2006 2010 Argor SA is UBS acquires UBS and Heraeus The new Heraeus Entrance of Münze A representative office Argor-Aljba Argor-Heraeus Approval and formed in , 100% of Group (Germany) headquarters and Management Österreich to in Chile is opened; is formed in Italia is formed expansion of Mendrisio, Switzerland the Company form a joint venture, in Mendrisio, acquire 100%; complete the new Argor-Heraeus Deutsch - Mendrisio, Switzerland facility creating Switzerland entrance shareholder structure land is formed Switzerland Argor-Heraeus SA is inaugurated of Commerzbank with Heraeus, International Commerzbank, and Management

8 9 Our shareholders The Group

Heraeus (26,5%) is a German multi- Commerzbank (26,5%)is a large pri- Münze Österreich (24,3%)%), the fa- national with over 12'000 employees vate German bank with almost 60'000 mous Austrian mint since the 12th and has operated in the precious met- employees, more than 14 million pri- century, is 100% controlled by the Na- als and hi-tech sector for 160 years. vate customers, and a million busi- tional Bank. Its shareholding provides ARGOR-HERAEUS SA Its shareholding provides important ness customers worldwide. As the Group well-established marketing synergies at the industrial level and in shareholder, it provides the Group fi- and commercial know-how, with spe- terms of research and development. nancial know-how and services. cific reference to creating synergies in distribution channels. ARGOR-HERAEUS Deutschland 100% Management (22,7%) Fully paid-up share capital ARGOR-HERAEUS Italia 100% CHF 6'369'000 ARGOR-ALJBA 50%

10 11 Corporate governance Our operations

For Argor-Heraeus, We have a lean structure, organised into profit centres: bank products and mining corporate governance (refining and foundry), industrial products (mechanics and semi-finished products), Refining Transformation into finished Alloys and semi-finished products and precious metal services (trading and other services). All of these profit centres are - gold products for the watch industry is an essential tool served by a single financial, control and compliance, personnel, and IT department. - silver - bank ingots (cast and minted) for ensuring correct The application of rules and procedures is guaranteed by: - platinum - Kinebar® Precious Metal Services - palladium - Iridor® products - a dedicated control body, managed by an engineer responsible for safety at management by - coins and medals Diamond-Like-Coatings the workplace, which conducts social-environmental audits of all Company dialong® and dianoir® means of transparent departments. The audits refer to three areas: environmental protection, safety functioning of the at the workplace, and precious metals security, each directly supervised; Company’s directive -a Compliance office, which supervises correct application of laws and of internal rules enacted by management; bodies and internal -a Risk Audit Committee, formed within the Board of Directors, devoted control systems. to controlling risks deriving from the Company’s operations in order to prevent and limit the consequences of unexpected results and to identify and exploit growth opportunities; - internal Due Diligence procedures.

12 13 Accreditations and recognitions

Argor-Heraeus is: - a recognised LBMA (London - holder of the Trade, Melter and - accredited by the Swiss Accredi- - a member of the Responsible - a member of the Association - recognised as a Professional Bullion Market Association) Good Assayer License rissued by tation Service (SAS) as a testing Jewellery Council (RJC); Suisse des Fabricants Training Company by the Canton. Delivery Producer and, along the Swiss Central Office for Precious laboratory for analyses of precious et Commerçants des Métaux with only four other companies world- Metals Control; metal alloys; Précieux (ASFCMP); wide, a referee for the control - authorised by the Swiss Financial - a certified and voluntary participant of quality standards of the LBMA Market Supervisory Authority in the Swiss CO emissions Good Delivery List members; ² (FINMA) to operate as a financial reduction programme; broker. This means that the Company - a recognised operator on LME complies with all Swiss anti-money (London), TOCOM (Tokyo), laundering regulations and that COMEX/NYMEX (New York), DMCC it is regularly audited in this regard; (Dubai);

STS 423

14 15 Stakeholders Goals 2010 participation instruments

As part of its commitment to sustainability, Argor-Heraeus con- Greater confidence in management stantly interacts and dialogues with its internal and external part- Periodic communication in line with the shareholder’s infor- Common strategy and vision ners. This proactive approach began years ago and, thanks to the mation needs (example: monthly data, newsletter) Business development support Sustainability Report, has become an annual means of communi- Shareholders Transparent communication and continuous dialogue Shareholder satisfaction cation and dialogue with all parties involved. Annual Report Shareholding stability The following chart provides a clear and complete picture of the Increased industrial synergies various stakeholder categories and of the participation activities conducted in 2010 in order to achieve precise social, environmen- Personnel policy and incentives tal, and economic goals. Shared growth and business strategy Monthly information meetings Management Long-term satisfaction and relations Development and sharing of crisis communication plan Identification and commitment Annual Report Code of conduct

Sharing of mission and vision Personnel policy and incentives Low turnover Periodic information High satisfaction Employees Code of conduct Our stakeholders Identification and commitment Sports and recreation group Support for Company image and reputation

Development of customer loyalty Know your customer assessment procedures Commercial information (products/services) Targeted personalised information Customers Sharing of values Trade fairs Being perceived as a reliable and qualified partner Commercial activities (example: targeted visits) Know your customer policy Code of conduct

Respect of the company’s quality standards Assessment procedures Suppliers Sharing of values Code of conduct Being perceived as a reliable and qualified partner

Competitors Cooperation on shared concerns (example: safety Participation in workshops at the workplace, environmental protection)

16 17 Stakeholders Goals 2010 participation instruments

Visit to production facility and roundtable discussion with DFE (Department of Finance and Economy), Office of Eco- Cooperation and support nomic Development, Chamber of Commerce, AITI ( Association of Manufacturers), Municipality Institutions Being perceived as reliable partners Periodic targeted information Opening of a preferential information channel SUPSI (University of Applied Sciences and Arts of Southern Switzerland) open days Being perceived as sensitive to local needs Institution of SUPSI Award for the best engineering diploma Sticker for training company with 5 apprentices accepted

Regular exercises during the year Being perceived as a reliable and qualified partner Public services Periodic targeted information Collaborative spirit and relationship of mutual trust Continuous collaboration

AITI, Chamber of Commerce affiliation Renown and reputation Visit to production facility and roundtable discussion with AITI and DFE Industry associations Being perceived as reliable partners Continuous collaboration on a variety of matters Opening of a preferential information channel Member of Responsible Jewellery Council (RJC) Member of Association Suisse des Fabricants et Commerçants des Métaux Précieux (ASFCMP)

Support of local non-profit associations Non-governmental Support and collaborative spirit Assessment of involvement in non-profit projects linked to fair trade Exchange of information organisations (NGOs) Participation in conferences

Creation of a reference for media relations Being perceived as reliable partners Involvement of the media in SUPSI open days Mass media Opening of a preferential information channel Creation of a company press office

18 19 Our approach to sustainability

Over the years, it has become increasingly clear that our so- A difficult task that requires us to assess an enormous amount Observance of the law is the first important step in this While observance of the law is indispensable, our commit- cial responsibility must go beyond the limits of our Company of information whose reliability cannot always be verified. direction. Argor-Heraeus is subject to strict Swiss regulations ment to society goes well beyond: to face the challenges of and expand to include our partners. Compliance with the law, To this we add caution, a principle which demands that we regarding environmental protection, the safeguarding of the gold industry, we have voluntarily applied a series constant efforts to achieve greater efficiency, unbiased refrain from working in politically unstable countries or with workers’ rights, and the trading and processing of precious of obligations, such as a code of conduct and the know personnel policies, and containment of environmental impact potential partners shown to be unreliable. We have achieved metals. your customer principle, presented below in the section are no longer sufficient. Integration in the production chain impressive results by applying our sustainability strategy. To this we add observance of all laws and provisions that are devoted to our social commitment. means sharing responsibility with the partners that precede But despite our efforts, the finishing line is still far off, and binding at the international and supranational level, foreign and follow us. Therefore, our challenge is to identify and work much remains to be done. trade regulations, and prohibitions on importing and exporting. with partners that guarantee compliance with regulations, This situation does not discourage us. On the contrary: transparency, and traceability of the origin and destination it stimulates us to continue on this difficult path in order to of metals. guarantee fair and transparent management and to improve sustainability in the industry.

20 21 Distribution of added value

A complete description of Argor-Heraeus’s economic impact cannot be limited to an assessment of annual results, but must also consider the wealth generated for the region and for its stakeholders in general. Therefore, we measure our economic responsibility based on the net global added value generated for those who interact with our Company, either internally or externally. In 2010, over one third of the value our Company generated was allocated to our employees in the form of remuneration, while another third was ploughed back into the Company in order to ensure long-term stability and growth. In addition to the benefits generated indirectly by jobs and salaries, institutions received approximately 11% of the value created in Argor-Heraeus in the form of taxes.

reinvested or earmarked Company 34% in Company distributed to our Shareholders 19% shareholders

Employees personnel 36% costs

Institutions taxes paid 11% at local, district, and federal level

22 23 Suppliers of services and accessory products

Argor-Heraeus selects suppliers Nevertheless, we believe the supply policies of a Company In 2010, Argor-Heraeus worked with almost 650 suppliers In absolute terms, this means that last year Argor-Heraeus such as ours must include another fundamental factor: a tie for a very wide range of services, from stationery articles to spent almost 5 million Swiss Francs to purchase products or of materials, services, and products with the region. Despite the fact that our business is global, the disposal of sludge generated from purification of water services in Canton Ticino. based on the principles of quality, we are convinced that our Company can continue to grow and to be recycled in copper production. 76% of our expenditure Our policy of giving preference to local suppliers also gener- conformity to high standards stay competitive only if the region in which it is based grows for suppliers was allocated to Swiss companies, almost half ates an important ecological value: by limiting movements and develops with it. of which are based in Canton Ticino. of goods and people, we indirectly contribute to reducing CO² of transparency, and sustainability. For this reason, when we choose suppliers of chemicals, fuels, emissions produced by means of transport. security services, disposal services, etc., we try to give priority to companies that operate in our local and regional economic system, i.e., in Mendrisio and in Canton Ticino. Distribution of suppliers by region When it is impossible to choose a supplier from these geo- graphic areas, we try to give preference to “Swiss Made” products. Canton Ticino 30% Rest of Switzerland 46% European Union 19% Extra UE 5%

24 25 Widening our gaze to the entire Forming relations based on trust Transparency, documentability, chain with our industrial customers and selection of transactions Our We are aware of the impact that mining The key to ascertaining our partners’ Argor-Heraeus is a leading trader on operations can have on local populations, sustainability is establishing transparent, the international bullion market thanks on the environment, and on the land- long-term business relations in which to the large quantities of materials it scape. This is why we always know our we know our customers personally. handles and processes. customers partners and the standards they adopt, As financial intermediaries, we are reg- Trust, checks, personal relations, visit their headquarters and, when istered with FINMA, the Swiss authority knowledge: our commitment involves Customer satisfaction is the cornerstone of every busi- Therefore, we must know our partners very well to be certain possible, go to their mines to verify that supervises financial transactions. a variety of equally important aspects, ness – including ours. that the precious metals we process are not the result compliance with work safety regulations All of our transactions are completely each necessary so that we may consider In our sector, customers and suppliers of raw materials of exploited labour and/or harm to the environment, and that and environmental protocols. traceable, and we do not do business a customer responsible. are often one and the same, given that customers they will not finance illegal or ethically questionable agendas. with retailers or conduct transactions In addition, we constantly monitor the generally retain ownership of precious metals through- that we deem less than transparent. quality and quantity of material received out processing. “Know your customer” is the philosophy that encompasses These principles are fundamental for from each site in order to take prompt a series of procedures Argor-Heraeus adopts to select its being considered responsible. action in the event of discrepancies partners, whether they be mines, industrial customers, Argor-Heraeus does not speculate on the that may indicate that previously veri- or organizations operating on financial markets. Because for market: all of our trading operations are fied conditions are no longer respected. our Company, being socially responsible also means evaluat- strictly linked to our physical business. ing whether our customers are sustainable for us.

26 27 Water consumption Total water consumption in m3

2008 96'305

2009 51'269

2010 60'786

In 2010, total water consumption was This is true for two reasons: first, cooling 60'786 m3, approximately 18% more water for machines is used regardless Given Argor-Heraeus’s industrial nature, water is an than in the previous year. The sharp drop of production speed and at an almost important part of our production process. in consumption from 2008 to 2009 constant rate once the machines are It is used for two main purposes: first, as a cooling liquid (-47%) is mainly attributable to the trans- started. Second, consumption of normal for a number of machines and in fine metal smelting opera- fer of Argor-Aljba to a separate and and demineralised water for chemical tions; second, it is essential in chemical and electrolytic independent facility, where closed- and electrolytic processes varies refining processes and in the washing of finished products. 30% 10% 54% 6% circuit systems were installed, achieving greatly, depending on the type of metal Chemical Cooling towers Cooling water Other a considerable reduction in water being treated. and electrolytic consumption by the Group’s innovative treatments joint venture. In addition, Argor-Heraeus installed thermostatic valves for much greater rationalisation of water use. Our constant efforts for greater water efficiency cannot be translated numeri- cally into an indicator that expresses consumption based on production.

28 29 Safety and About 20% of this water (11'725 m3 in Almost 65% of consumption consists the environment 2010) is pre-treated, and requires special of cooling water, and we are constantly attention before it is conveyed to the seeking ways to limit its use. For All of the water used at Argor-Heraeus Mendrisio plant. example, we recently installed devices flows into the purification plant of the This means that in addition to neutralis- that increase the efficiency of cooling Mendrisio Water Purification Consortium. ing all process solutions, the water water and reduce its consumption. is systematically treated to completely remove any and all heavy metal residues. Moreover, before leaving Argor-Heraeus, all waste water is analysed to check its conformity to strict legal limits.

30 31 Chemical consumption and production

Chemical consumption 3000 160%

140% 2500

120%

2000 100%

1500 80%

60% 1000

40%

500 20%

0 Production 2008 = 100%

Tonnes 0% Hydrochloric acid, nitric acid, and caustic soda represent Large quantities of the two acids are employed in the metal 90% of the chemicals used by our Company. We also use refining processes: solutions used to refine gold contain hy- 2008 2009 2010 other chemicals in much smaller amounts. drochloric acid, while those used to refine silver contain nitric acid. The acidic solutions are neutralised with caustic soda, Hydrochloric acid Nitric acid Caustic soda Other chemicals Production which is also used for some chemical treatments.

In 2010, 2'719'601 kilos of chemicals were used in refining In absolute terms, this increase is completely attributable to processes. greater production in the year, and if we relate chemical consumption to the quantity of metals refined, we see that 27% 26% 37% 10% Compared to 2009, almost 25% more of the two principal consumption was essentially unchanged. acids and caustic soda were used. Hydrochloric Nitric acid Caustic soda Other acid chemicals

32 33 Maximum hourly gas emissions in mg/m3 and OIAt limits, 2009

Nitrogen oxides 250

Organic compounds 150

Measured value 30 Inorganic compounds OIAt limit

Secure infrastructure Safety and the environment Waste water deriving from the neutralisation of process solu- While reducing the environmental impact of precious metal tions contain salt residues and traces of metallic elements. processing is part of our daily mission, Argor-Heraeus is also The use of chemicals is the aspect of our business that could Substitution of potentially harmful chemicals These components are kept well below legal limits thanks ready to manage unexpected events. Preparing for emer- potentially have the most significant impact on the environ- The best way to limit the impact of a harmful chemical is to complex pre-treatments and, before being sent to the gencies means working constantly on people and on infra- ment, and for this reason we give it maximum attention. to stop using it. Therefore, from 2007 to 2009 we eliminated purification plant, are meticulously analysed to ensure full structure. Our commitment is three-fold: the substitution (where possible) the use of two gases (chlorine and sulphur dioxide) for compliance with regulations concerning their discharge into All of our employees who come into contact with chemicals of potentially harmful chemicals, careful management of the chemical treatment of precious metals, reducing risks of serious sewers. are carefully trained, know and regularly practice emergency products of chemical reactions, and a secure infrastructure. accidents as well as hazards linked to their storage. The third and final product of chemical reactions consists of procedures, and undergo frequent medical checkups. gases such as nitrogen oxide and other organic and inorganic Our Mendrisio production facility was designed so that the Waste management compounds. In 2009, measurements taken by the Environ- basement (where waste from departments that use chemicals One of the cornerstones of our environmental policy is the mental Protection Department of Canton Ticino revealed that is conveyed and treated) can act as a containment tank disposal of residues from chemical reactions that occur the highest point of residual concentrations of such sub- to prevent possible leaking into the environment. Moreover, during precious metal processing. These residues are divided stances was well below the legal limits set by the Ordinance in emergency situations, all chemical reactions are immediately into three categories: sludge, salts dissolved in waste water, on Air Pollution (OIAt). interrupted to prevent toxic fumes from escaping into the and residual gases. atmosphere. Sludge from metal residues (copper oxides), the majority of waste product deriving from chemical processes, originates in the non-noble metal component of the material being processed. Consequently, the amount to be recycled depends on the type and amount of the material being processed. All of the 257 tonnes of sludge collected in 2010 were deliv- ered for treatment to authorised companies specialising in the recycling of metals.

34 35 Energy consumption and production

50'000 160%

45'000 Energy consumption 140% 40'000 120% 35'000

100% 30'000

25'000 80%

20'000 60%

15'000 40% 10'000 20% 5'000 Production 2008 = 100% Energy consumption (MJ/a) 0 0% 2008 2009 2010

Fuel oil Methane Electricity Propane Production

The 31'247 MJ/a of electricity Electricity drives the machines that mechanically process Considering all of the various sources, even if, as with water, it is very difficult the quantity of metal processed, but the metal, the induction smelting furnaces, systems for we consumed a total of 43’002 MJ in to define a numerical indicator for this also on the type of metal, because consumed in 2010 are the electrolytic refining, as well as all of the equipment utilised 2010, +12.4% compared to 2009. relation for two fundamental reasons: different metals, or metals with different primary source of energy for to provide services. As was the case for water and chemi- first, the Company uses energy for levels of purity, are subjected to cals, this increase was closely linked many purposes other than the precious specific processes with different energy Argor-Heraeus’s production. Methane and fuel oil are used principally to heat the rooms to higher production (+13.5% in 2010), metal processing; second, energy requirements. and to generate steam, which supplies heat for a number consumptions do not depend solely on of chemical processes. Propane is used as a protective gas in smelting processes.

4% 19% 73% 4% Fuel oil Methane Electricity Propane

36 37 Safety and Environmental ethics and attention to the environment costs stimulate us to constantly search for greater efficiency in electrical In recent years, our Company has consumption as well. For example, implemented radical changes to its en- various minor actions conducted in ergy policy, especially with regard the last two years, such as upgrading The Company’s use of fuels complies Propane gas is stored in an external As an additional guarantee, we have to the use of fossil fuels. In 2006, we of production and support systems, with all safety regulations applicable underground cylinder; filling operations decided to install sensors in our facility decided to use methane gas supplied reduced electrical consumption by to supply and storage operations, and are conducted in conformity to an in- in order to detect the presence of by the city mains. Today, two of our more than 250 MJ in 2010 (correspond- its two fuel oil tanks are subject ternal procedure defined in compliance gas in the air and to immediately monitor three boilers run on methane, and only ing to the average annual consumption to the regular checks and inspections with the law. any leaks. one on fuel oil. This decision, based of 15-20 Swiss households). required by law. on ecological concerns, has produced positive results in economic terms and with regard to the diversification of energy sources.

38 39 Emissions CO2 emissions and production

Production CO2 emissions Argor-Heraeus fully shares these goals, and has therefore 800 150% The main consequence of the use of fossil fuels such as fuel decided participate actively in AEnEc (Agency for Energy 600 CO2 emissions 2 100% oil, propane, and methane is the production and emission and the Economy) and in the “reduced CO2” programme to 400 of carbon dioxide. With the law on CO2, Switzerland made a cut emissions. 200 50% pledge to the international community to reduce emissions In recent years, this formal commitment has been translated Production 2008 = 100% Tonnes of CO Tonnes 0 0% by an average of 10% in the period 2008-2012. into concrete measures to improve our energy efficiency. 2004 2005 2006 2007 2008 2009 2010 This improvement is based on measures voluntarily adopted In terms of impact, the principal measure was the above- by companies and individuals and, secondarily, on incentives mentioned partial substitution of fuel oil (the primary cause of If we analyse the data on tonnes of CO emitted by Argor- Dust emissions such as the CO tax. carbon dioxide production in the Company) with natural gas. 2 2 Heraeus since 2004, we see that total emissions have not The principal cause of dust emissions into the air is the increased significantly over the last seven years. Considering smelting of material received, especially when such material this data from the point of view of efficiency, very satisfactory contains a low percentage of precious metal. This very fine result have been achieved: against continuous growth in dust consists essentially of zinc oxide and lead oxide. production, emissions have not increased proportionally, and We constantly monitor these emissions to guarantee that the have even decreased in some periods. quantity of dust does not exceed the limit of 20 mg/m³

In short, while 2.1 tonnes of CO2 were emitted for each tonne set by the Ordinance on Air Pollution (OIAt). The Environmental produced in 2004, only 0.9 tonnes of CO2 were emitted for Protection Department of Canton Ticino conducts periodic the same amount produced in 2010. measurements to check conformity to such parameter. The most recent measurement at Argor-Heraeus, conducted in 2009, revealed a maximum concentration of 0.8 mg/m³, one twenty-fifth of legal limit.

Fine dust emissions in mg/m3 and OIAt limits, 2009 measurement

Measured level Dust 20 OIAt limit

40 41 Waste material, packing materials, noise

Waste material Environmentally more problematic due to accidental spills, two gates Packing materials used, our objective for the near future Noise Our industrial activity produces various materials, such as solvents used to wash were installed on the clean water and Our Company uses a wide variety of is to define measurements and indica- We are very careful with regard to our types of waste, such as paper/card- parts in mechanical processing opera- waste water pipes to immediately materials to pack its products, such tors that may enable us to make im- employees’ exposure to noise generated board and wood from crates of incoming tions and oils used to lubricate block discharges in case of emergency. as plastic, wood, or cardboard according provements in this area. by the machines operated in our facility. material, as well as plastic and metals. machinery, are disposed of as special to the type and configuration of the The absence of precise quantitative The use of protective ear wear is All of such waste is disposed by means waste in compliance with law. metal processed. data does not mean that we do not mandatory in departments where work- of authorised disposal companies. While we do not systematically compile make investments aimed at increasing ers are exposed to a potential risk Clean water from Company land and data on quantities of packing materials the efficiency of this aspect of our to their hearing (such as the foundry). from the roof is discharged into the activity and reducing its environmental In addition, every employee is given Moree River. In 2008, to prevent possi- impact. For example, by the end a medical check-up by SUVA (the Swiss ble contamination of the water supply of 2011 we will install a new system provider of mandatory accident insur- to pack minted ingots with recyclable ance) every five years. PET, eliminating the use of PVC.

42 43 Composition of personnel

Thanks to increased production, our Company has grown In addition to its permanent employees, Argor-Heraeus avails considerably in recent years. At the end of 2010, we had itself of temporary workers in light of the significant fluctuations 198 permanent employees (22 more than in 2009). In just to which our markets are subject. These workers, managed ten years, Argor-Heraeus has created over 100 new jobs. by two carefully selected agencies specialising in temporary work, vary in number and in duration of employment. In recent years, their contribution has been equal to that of approximately 30 permanent full-time employees.

Employees and temporary personnel

2008 173 34 Even in a technologically avant-garde Company such as ours, Our personnel policy focuses on people: guaranteeing our employees play a fundamental role: the people who a good pension, adequate insurance coverage, a workplace come to work every day are Argor-Heraeus, and allow us to accessible to employees with reduced motor skills, and 2009 176 30 grow, compete, and create value for our stakeholders. apprenticeships for young people are simple but concrete examples of our efforts. We also try to provide moments of recreation and relaxation: 2010 198 33 the sports group and events devoted to retired employees help strengthen a sense of belonging to the Argor-Heraeus Employees family. Temporary personnel (FTE)

44 45 Employees’ education, 2010

University 11% degree Employee turnover rate Average stay in Company

Distribution of employees Professional trade school 14% 2008 11.2% < 5 years 48% by gender, 2010

M Professional training complete 39% 2009 4.6% 5 to 9 years 20% 73% with apprenticeship

F 27% In house training 36% 2010 3,4% 10+ years 32%

Almost 30% of our workers are women, 58% of our workers come from the The use of hi-tech machines demands Identification with Company values, the number of employees who have left and 32% for more than 10. Considering and this percentage is practically Italian side of the border, much lower qualified personnel. Over 10% of our trust, and experience in handling the Company to the total number that Argor-Heraeus had 89 employees the same for management, since women than the average percentage for manu- employees have a university degree, precious materials are closely linked of employees). Our goal for the future at the end of 2000, this means that hold 6 out of 22 positions at that level. facturing companies in the Mendrisio and almost 55% more have a diploma with a low turnover of employees. is to keep turnover at the low levels 70% of them have remained with us area, where historically the border- from professional trade schools. For this reason, we are extremely achieved in 2010. the entire time. worker component in industry is very Workers involved in the production pleased by the considerable drop in Data on the average number of years at significant. process who do not have specific the turnover rate (i.e., the ratio of the Company is even more encouraging: professional training receive technical over 50% of our employees have training in-house. been with us for more than 5 years,

46 47 Magnitude Index – LTIF

1.00 3.5 3.0 0.80 2.5 0.60 2.0 Health and safety at the 0.40 1.5 1.0 0.20 0.5 MI 0.00 0.0 LTIF workplace 2008 2009 2010

Argor-Heraeus is composed of people, not simply Increasing our employees’ awareness of safety rules, proce- We evaluate two aspects when monitoring worker safety: The Magnitude Index (MI) measures the number of days lost workers, and safety at the workplace is our uncondi- dures, and principles by means of training sessions, exercises, the frequency and magnitude of accidents. due to accidents at the workplace every 1'000 days. In the tional priority. signs, and warnings is part of our daily commitment. To this The Lost Time Injury Frequency (LTIF) index expresses the last three years, this indicator rose sharply due to two cases we add formal documents, such as the personnel rules and number of accidents recorded for every 100'000 hours of accidents (not directly connected to production activities) Above all, safety derives from our infrastructure, processes, code of conduct, that every employee is required to know worked. 2010 was an especially positive year in this sense: that required extremely long recovery times. and observance of regulations, and we are convinced that an and respect. the index decreased 62% compared to the previous year. Even if the accidents occurring at Argor-Heraeus may be orderly, calm work environment helps eliminate risks. At Argor-Heraeus, we have a safety engineer who devotes considered minor, we have renewed our commitment But all of these factors would be ineffective without the contri- 100% of his time to monitoring and instructing our personnel to reducing of any indicator attesting to an accident suffered bution and commitment of the people who work here. on the importance of a safe workplace. by an employee.

48 49 Hours of safety training

2008 400 170

2009 136 408

Training 2010 304 296

Developing the Company’s know-how, providing employees These courses and activities included: Given the heterogeneity and extent of training activities External training a path for professional growth, and guaranteeing a safe conducted during the year, we are unable to reliably estimate Internal training - technical-professional training (including courses in workplace are just a few of the goals that could not be achieved the Company’s total commitment in terms of expenses and metallurgy, assayer certification, CAD) for supervisors of without a constant commitment to training. paid working hours devoted to training. In terms of numbers, there were 600 hours of safety training electrical plants, as well as seminars on specific topics. In 2010, we organised training courses and activities (both A quantitative assessment may be provided only with regard in 2010.The increase compared to 2009 is attributable the in-house and with outside specialists) that involved department - continuous training in safety and instruction for adminis- to the aspect that we deem the most important and imperative: larger number of employees, in addition to our commitment personnel and different levels, with awareness that every tration; training to ensure employee safety. to increased investment in an area of fundamental impor- employee must contribute to increasing skills in the Company. All of our employees – including apprentices and temporary tance to our Company. - instruction on the code of conduct and on the Company’s personnel – devote their first day of work to safety training. ethical and professional values; In addition, internal or external courses are held during - language courses (German, English, French) fundamental the year concerning specific aspects of safety in each job for our global operations; performed at the Company. - meetings and seminars for executives and managers, often held on dedicated weekends, with the aim of develop- ing management and strategic skills such as conflict management, leadership, evaluation, and enhancement.

50 51 Activities with our stakeholders

Even though Argor-Heraeus is a global Company with customers, suppliers, and competitors throughout the world, we have always given utmost importance to ties with our region and its stakeholders, and believe that cooperation is essential for long-term, sustainable growth. Corporate culture, ethics, business style, and human relations among workers are closely linked to our Company’s history and location. In February, State Councillor Laura Sadis, In November, a 3'000 Swiss Francs award was presented Also in November, the doors to our production area were Director of the DFE (Department of to a SUPSI student (Department of Innovative Technologies) opened to third-year engineering students at SUPSI, Finance and Economy), Arnoldo Coduri, for the best diploma earned after three years of study. The who met and spoke with our engineers who once attended Director of the Economics Division, award is part of our policy to support and stimulate technical the same school. economic promotion managers, and repre- training. sentatives of top management of AITI were welcomed for an important meeting between the Company and institutions.

52 53 Argor-Heraeus supports the Fondazione Those who once worked at Argor- Constantly increasing traffic and the Provvida Madre in , devoted Heraeus are always welcome: in 2010, consequent rise in pollution are topics to helping disabled minors and adults, our retired employees were invited that concern our region and, therefore, the Istituto Torriani in Mendrisio, to visit the offices and production areas Argor-Heraeus as well. Thanks to our which provides after-school tutoring for where they previously worked and to join collaboration with Infovel, consultants minors, and the Istituto Canisio in Riva us at our Christmas dinner. for sustainable mobility, we have San Vitale, which provides special brought these problems to the attention education services to young people and of everyone in the Company, and have adults. In addition, our Company promoted sustainable mobility solutions supports a number of associations in aimed at discouraging the use of the Mendrisio area and, more generally, cars and promoting alternate means of in Canton Ticino, involved in cultural, transportation. ecological, and sports activities.

It is essential that Argor-Heraeus employees work in a To achieve this, we offer our employees and their families positive and stimulating environment in which each person the opportunity to participate in gatherings and recreational feels part of a common mission. activities, including a winter ski-trip and summer sports tournaments.

54 55