COMMUNITY KOORAGANG ISLAND REPORT 2020

MANUFACTURING CENTRE MANAGER’S MESSAGE

Welcome to our 2020 community report. The purpose of this report is to provide you with a summary of Orica Kooragang Island’s activities and achievements over the last 12 months. Demand for our products in the Hunter Valley has remained strong and, for the fourth year running, our sales revenue increased. This reflects our position as a trusted partner of choice for our customers Paul Hastie as we continue to provide them with safe, secure and reliable supply. Manufacturing The site’s largest undertaking in 2019 was the turnaround for Centre Manager, Orica Kooragang Island the No.2 and No.3 nitric acid plants and the No.2 ammonium nitrate plant. The multimillion-dollar planned maintenance project involved the completion of more than 400 tasks including statutory inspections, testing of safety instrumented systems, overhauling relief valves and catalyst replacements. Major turnarounds for the nitrates plants are conducted every five years and provide an opportunity to carry out important works that will ensure the plants can continue to operate safely and efficiently. We maintained our focus on environmental and safety performance, reaching a major milestone with the completion of the arsenic remediation project. We also progressed our ammonia management improvement program and major hazards management program. During 2019 we supported 42 Newcastle-based groups with around $302,000 in funding to deliver important projects for the benefit of the region. We also continued to strengthen our relationship with the community through our many engagement activities including community reference group meetings, newsletters and site tours. Finally, last year we celebrated our 50th anniversary with more than 300 past and present employees attending a family open day at the site. The event was a huge success as old friends were reunited, new friends were made, and a story or two was told. It was a privilege to mark such a memorable occasion with so many people who have contributed to Orica’s success. COMMUNITY

Engagement Investment Orica Kooragang Island is committed Community investment and sponsorship to effective and targeted stakeholder activities are a central pillar of our engagement, which is essential to engagement approach. gaining the trust and support of our neighbours and the broader community. We aim to make a lasting and positive contribution to the community by supporting local initiatives We work with the community to understand the and events. Through our Community Investment needs, concerns and aspirations of individuals and Program we fund a range of projects that organisations. In 2019 our site carried out a number promote education and lifelong learning, improve of activities including: and protect the environment, and build strong communities. In 2019 we provided around • the production and distribution of a quarterly $133,000 worth of grants to 16 community groups. community newsletter delivered to residents in our neighbouring suburbs of Stockton, As well as providing grants through the Community Carrington, Tighes Hill, Mayfield East, Fern Bay Investment Program, we also provided around and Maryville $169,000 in funding for a range of other events, activities and organisations including: • regular Community Reference Group meetings • regular site tours for the general community as • Surfest’s Orica Team Challenge well as special interest groups • Harry’s House • employee attendance at community events to • Chuck Duck Breakfast Club answer questions and speak to people about • Hunter District Cycling Club our operations • Newcastle Society of Artists • emergency response briefings for industrial neighbours as well as nearby schools and aged • Soul Café care homes • Carrington Village Twilight Market • one-on-one conversations with community • Mentor Support Network stakeholders to help us improve our community • Newcastle All Blacks engagement. • Museum Express • Tea4TROG • Biggest Ever Blokes’ Lunch • Variety Children’s Charity • local sporting clubs.

Pictured: The Orica-sponsored 2019 summer series of Soul Café’s Friday Chill was held from January to March at Newcastle’s Pacific Park. More than 4,000 people attended the fun, family-friendly events which featured local musicians, food trucks and lots of relaxed vibes.

SPONSORSHIP SNAPSHOT

Carrington Public School Art Expression Museum Express In 2019, for the third year running, we sponsored Carrington Public School’s annual Art We continued our sponsorship of Museum Express, a local program that delivers high Expression competition. The competition’s theme was Identity, and all funds raised from the quality and engaging science shows to schools and other audiences across the Hunter event were donated to the Indigenous Literacy Foundation. and Central Coast regions. Since 2015, Orica has provided the program with more than $250,000 in funding.

Biggest Ever Blokes’ Lunch John Hunter Children’s Hospital We sponsored Newcastle’s Biggest Ever Blokes’ Lunch. More than 250 people attended the We sponsored the 10 Days of Christmas program at the John Hunter Children’s Hospital. The inaugural event, which was aimed at raising awareness of prostate cancer and raising funds aim of the program was to provide kids in the hospital with special visits and surprises, as well for specialist nurses in the Hunter region. Guest speakers included medical experts, creative as raise money for much-needed equipment. artists and sporting identities. COMMUNITY INVESTMENT PROGRAM CASE STUDIES

Got Your Back Sista Hunter Christian School Conservation Volunteers The local charity used a $10,000 grant to provide weekly A $10,000 grant funded the Hunter Christian School’s The organisation used a $9,000 grant to increase organic meditation and mindfulness classes for women rebuilding new outdoor learning and play space, made entirely from fruit and vegetable production at the Kooragang community their lives after escaping domestic violence. reclaimed timber. garden, Ash Island, Hexham.

Hunter Multicultural Communities Stockton Tennis Club Royal Life Saving NSW A $10,000 grant enabled Hunter Multicultural Communities The club used a $6,500 grant to help fund the replacement Thanks to a $4,800 grant, the organisation delivered first aid to build a new information centre, upgrade garden planters of an old fence that divides the upper and lower courts. training to mums and carers in the Newcastle region. and install beehives at its Waratah location.

Every year two rounds of funding are offered. The first round opens on 1 APPLYING FOR A GRANT WITH THE March and the second round opens on 1 September. Application forms and COMMUNITY INVESTMENT PROGRAM supporting documentation are available on our website orica.com/kooragang 2019 KEY EVENTS OCT We supported one of the largest JUN Indigenous sporting A ship we use to events in Australia, the JAN transport ammonia from AUG Koori Knockout. We sponsored Soul our site to another Orica We conducted our Café’s Friday Chill events APR facility in Queensland, The Orica-sponsored annual joint emergency held at Newcastle’s the Wincanton, notched science outreach exercise with Fire Pacific Park. The Hunter Multicultural up its 200th voyage. program Museum and Rescue NSW. Communities Express celebrated We sponsored organisation in Waratah National Science Week MAR Newcastle’s inaugural unveiled its new at Bishop Tyrrell College. Biggest Ever Blokes’ FEB Two nitric acid plants information centre, NOV Lunch, which was We sponsored the The 7th Orica Team and one ammonium planters and beehives We completed a attended by more than annual Harry’s House Challenge, part of nitrate plant were which were funded by project to remediate 250 people and raised Charity Shield event at Newcastle’s Surfest, took temporarily shut down our grants program. arsenic-contaminated much-needed funds Lynn Oval, Stockton. place at Stockton Beach. to undergo planned soil and groundwater SafeWork NSW for specialist prostate maintenance. near the site’s north We set up a stall conducted its annual cancer nurses. western boundary. at the Sacred Tree The Hunter Christian major hazard facility SEP Night Markets, which School revealed its verification visit to review We hosted a visit from Fern Bay Public School were held at Griffith new outdoor learning our critical controls and the Orica Board’s JUL revealed its new Park, Stockton. and play space, safety systems. Safety Health and made possible with a We hosted a breakfast learning space designed Environment Committee. We celebrated turning Community Investment to congratulate recent to help integrate 50 with a special family Program grant. recipients of grants STEM subjects into the The site’s new boiler open day, which was MAY from our Community curriculum. The project became operational. We completed a project attended by more Investment Program. was funded with an to refurbish the stack on We sponsored the than 300 past and KO Classic surfing Orica grant. the No.1 nitric acid plant. The site held a series present employees. competition held at Bar of Integrity Forums for DEC Beach, which raised more engineers, technicians We joined forces with the than $20,000 for the and planners to share Medowie Lions Club to Calvary Mater Hospital. information on a range pack Christmas hampers of topics associated with for local families in need. operating equipment We sponsored the and its metallurgy. 10 days of Christmas We sponsored the fund-raising program Hunter District Cycling at the John Hunter Club’s Junior Tour. Children’s Hospital. IN 2019 WE...

COMPLETED CONTRIBUTED INVESTED CONDUCTED CONDUCTED AN ADDITIONAL $ BUSINESS WITH 3718 $ 302K 39 safety leadership 67M in community site tours 502 interactions to the local economy sponsorships, local suppliers grants and donations HOSTED PROVIDED SPENT SUPPORTED AN TO HELP 561 120 ADDITIONAL visitors $238M flu vaccinations 42 on goods and 866 beneficiaries services FTE jobs RAN PERFORMED 12% NSW SENT OUT 3 $28.7M PAID AROUND site-wide 66 emergency 15% Hunter periodic health EMPLOYEES response exercises $36.9M assessments $ 24K 31.6M newsletters HELD 20% Overseas HAD AND $50M PAID 4 55 CONTRACTORS community workers participate 6K 50th anniversary reference group in manual handling $ booklets meetings training 13.9M 53% Australia $132.2M INVESTED $39M in capital works ENVIRONMENT

At Orica Kooragang Island we ensure that responsible environmental management is integrated into all aspects of our activities.

We are always looking for opportunities to better our Ammonia Management Improvement environmental performance and during 2019 we progressed Over the past eight years we have invested around $100 and completed a range of projects. million to improve the way ammonia is managed at the site. Remediation The program of works has included: In 2019 we completed a project to remediate arsenic- • upgrades to ammonia storage vessels contaminated soil and groundwater near the site’s north • upgrades to ammonia detection and isolation systems western boundary, on time and on budget. The works • installation of three flaring systems designed to prevent involved the construction of a 12-metre deep, low- ammonia emissions and their associated odour permeability, below-ground wall to enclose the arsenic contamination. A cap was then constructed above ground • replacement of the ammonia pipeline between the to minimise rainwater entering the contained area. Ongoing site and Kooragang Berth 2 to ensure the ongoing groundwater monitoring will be undertaken to ensure the safe operation of the site’s ammonia import and system is operating effectively. export process. During 2019 the final project in the Ammonia Management The contamination is the result of an historical Improvement Program was commenced. Works included manufacturing process in which an arsenic-containing the installation of new infrastructure at the 12,000-tonne solution was used in the ammonia plant. The practice was ammonia storage tank in preparation for a new pump and ceased in 1994, before Orica took over ownership of the associated piping. site in 2003. Emissions’ Reduction A project to reduce PM2.5 ammonium nitrate emissions from the site’s prill tower was significantly progressed during 2019, with the completion of a feasibility assessment for the implementation of irrigated fibrebed scrubbing technology. The process included: • geotechnical and structural evaluation • consultation with suppliers • developing preliminary engineering drawings • estimating the cost and timeframe for implementing the technology. A report outlining the findings of the feasibility assessment has been submitted to the NSW Environment Protection Authority. MAJOR PROJECTS NITRATES 106,966 TURNAROUND Nitrates Turnaround hours worked NUMBER CRUNCH In March 2019 the No.2 nitric acid plant, No.2 ammonium nitrate plant and No.3 nitric acid plant were temporarily shut down to undergo planned maintenance. The multimillion- 1,025 dollar project, known as a turnaround, saw the completion permits issued of more than 400 tasks and involved around 200 extra workers on site. Some of the activities undertaken included: • statutory inspections of pressure vessels 214 • integrity inspections of piping and tanks statutory inspections • testing of safety instrumented systems completed • inspection, overhaul and setting of relief valves • catalyst replacements • replacement of ageing equipment 777 audits completed • machine overhauls and replacement. Major turnarounds for the nitrates plants are conducted every five years and provide an opportunity to undertake important works that will ensure the plants can continue to 220 operate safely and efficiently. extra people on site No.1 Nitric Acid Plant Stack The refurbishment of the No.1 nitric acid plant’s stack was 15 completed in 2019. The works involved repairs to columns, capital projects the installation of new steel bracing and beams, and painting. However, the longer-term plan for this asset is full completed replacement and preliminary design work for a new stack is underway. Boiler The site’s new boiler is now operational after construction and commissioning was completed towards the end of 2019. A boiler is required to supply pressurised steam to our operations. The site’s two original boilers were ageing, subject to frequent shutdowns, required a high level of maintenance and were less efficient than modern designs. The new boiler will improve energy efficiency and reduce gas consumption. HEALTH AND SAFETY

At Orica, safety is our priority, always. This value underpins our commitment to the health and wellbeing of our people, our visitors and the community.

Safety Health At Orica Kooragang Island we have an uncompromising Orica Kooragang Island has an on-site medical centre, focus on hazard identification, risk assessment and which is staffed during business hours by an occupational risk management across all our work. Important safety health nurse and visited by a doctor for three hours a week. achievements and activities for the year included: This ensures that we not only look after the safety of our employees but also their health and wellbeing. During 2019 • completing 3718 safety leadership interactions to ensure the medical centre conducted periodic health assessments, that risks were understood by all personnel and hazards skin checks, flu vaccinations, and drug and alcohol testing. were properly controlled Other achievements included: • first aid, work in confined spaces and confined space rescue training for operators and maintainers • free on-site psychology services and counselling available every fortnight • manual handling training for 55 personnel • drug and alcohol education sessions for all personnel. • firefighting training for operators at the Mines Rescue facility. Emergency Response Exercises Major Hazards Management Undertaking site-wide emergency response exercises ensures that we regularly practice and review our emergency Major Hazards Management, a global Orica program response procedures. Throughout 2019 we conducted three taking place across 475 sites, is designed to ensure that such exercises, one of which was a joint exercise with Fire everyone returns home safely at the end of each day. and Rescue NSW and other agencies. This allows emergency The key purpose of the program is to increase employee services personnel to familiarise themselves with our site awareness of hazards in the workplace and to ensure there and products. are effective controls in place to manage them. During 2019 we significantly progressed this initiative at Kooragang An additional seven desktop emergency exercises were also Island, verifying 207 key controls. Nearly every worker on site undertaken throughout the year. has been involved in this comprehensive process, which is scheduled to continue through 2020. PEOPLE

Our employees are critical to the ongoing success of our business.

Orica Kooragang Island is a significant employer that retains manufacturing capacity and skills in the Hunter region. In 2019 we employed 154 people in a wide variety of roles. Around 90 per cent of our staff live in the Newcastle, Lake Macquarie, Port Stephens and Maitland local government areas. Many of our employees are active members of the local community and last year participated in a variety of events such as City2Surf, Beanie for Brain Cancer and the Biggest Morning Tea to help raise funds for charities. Many of our employees also volunteer for non-profit organisations such as Engineers Australia, Scouts and surf clubs, with one employee gaining a nomination for Volunteer of the Year. In addition, we have volunteer fire fighters and student mentors among the ranks. Our graduate engineers belong to a regional sustainability committee that both organises and takes part in a range of activities for the benefit of the wider community. In 2019 the graduates participated in Sleep out for Soul, raising more than $3,500 for Newcastle’s Soul Café. They won the annual World Environment Day tree-planting challenge, where a team of four planted 160 trees in just two hours. The committee also visited Ronald McDonald House twice to cook for the resident families and sponsored the Lake Macquarie Running Festival, raising $1,750 for the John Hunter Children’s Hospital. The highlight of the 2019 year for our employees was undoubtedly the 50th anniversary celebrations, which took place over two events. The first was a dinner attended by more than 100 past and present employees, as well as community members and elected officials. The second event was a family open day at the site attended by more than 300 past and present employees. 13% 87% 89 3 employees154 female male contractors graduates Both at and outside of work, employees and contractors at Orica Kooragang Island show their commitment to the company’s values. & where they live Safety is our priority. Always. We respect and value all. 2% 3% 3% 9% 10% 33% 38% Together we succeed. We act with integrity. We are committed to excellence. LAKE PORT OTHER DUNGOG STEPHENS STEPHENS MAITLAND CESSNOCK MACQUARIE NEWCASTLE PRODUCTS

Orica Kooragang Island supplies critical products to the mining, infrastructure, agriculture, water supply, food, dairy and medical sectors across the state.

Ammonia Ammonium Nitrate Kooragang Island’s ammonia plant uses natural gas Approximately 430,000 tonnes of industrial grade (methane) to produce up to 385,000 tonnes of ammonia ammonium nitrate (AN) are produced at the site each year. It each year. More than 90 per cent of this ammonia is used is manufactured through the reaction of ammonia and nitric within the company for the manufacture of nitric acid and acid. Most of this AN is used at Hunter Valley mine sites to ammonium nitrate. make explosives. In fact, we supply 85 per cent of the Hunter region’s mines. The AN is also used across New South Wales Approximately 23,000 tonnes of ammonia are sold across in the quarrying and construction industries. Australia and Asia for other uses, including: Ammonium nitrate product is supplied either as a solid or • as an agricultural fertiliser, where it is applied as a liquid in solution form. Ammonium nitrate solution, a mixture of directly into the soil for grain and cotton crops AN and water, is sent off site for use in the manufacture of • as a refrigerant in commercial refrigeration systems emulsions, which are used to make explosives at mines. • to provide longer lasting disinfection of drinking water Ammonium nitrate is also sold to the medical industry • to assist in reducing nitrogen oxide (NOx) levels in air for the manufacture of nitrous oxide (laughing gas), an emissions from power stations. anaesthetic and pain relief gas. Nitric Acid Carbon Dioxide Three nitric acid plants operate at the site, converting You might be surprised to learn that our site supplies 50 per ammonia into around 330,000 tonnes of nitric acid each cent of the New South Wales carbon dioxide market. Each year. Ninety-nine percent of the nitric acid is used on site in year approximately 53,000 tonnes of carbon dioxide, which the manufacture of ammonium nitrate, while approximately is produced during the manufacture of ammonia, are sold 850 tonnes per annum are sold to the dairy sector for use as for use in carbonated drinks and light beer. It’s also used as a cleaning agent. a medical gas during invasive surgery such as laparoscopy and arthroscopy, and to manufacture dry ice, which is predominantly used as a coolant in food transportation. ECONOMIC

Orica Kooragang Island is a strategically and commercially critical business, which makes a significant contribution to the local economy.

Over the last five years market conditions in the coal sector have strengthened, and our sales revenue has steadily increased. Despite the challenges presented by rising energy costs, the Kooragang Island site remains reliable and sustainable, and future demand for our products appears strong. Our local spend continues to be substantial. In 2019 we spent $37 million procuring goods and services from more than 500 local businesses, paid more than $45 million in wages to 243 employees and contractors, and invested around $39 million in capital and related works. In terms of added value, it is estimated that the site contributed an additional $67 million in economic activity and supported an additional 866 full-time equivalent jobs in the Hunter region. At a state level, Orica Kooragang Island created an additional $53 million in economic activity and supported an additional 673 jobs. Capital and related works provided a further $7.6 million stimulus in the Hunter region and $5.9 million in NSW. For every $1 million investment by Orica Kooragang Island, an indicative $170,000 in additional activity occurs and 15 additional jobs are supported in the broader economy.

Economic information based on Orica’s financial year 1 October 2018 to 30 September 2019. e

orica.com/kooragang 1800 789 044 [email protected]