Social Responsibility Report of 2010 Zijin Mining Group Co., Ltd. Introduction The thirdly published Zijin Mining Group Social Responsibility Report, in compliance with "Guidelines for Environmental Information Disclosure of Listed Companies" promulgated by the Shanghai Stock Exchange, focusing on strengthening cooperate social responsibilities‖, is complied based on Zijin Mining’s performance of its own. Scope of the Report Organizational scope of this report: Zijin Mining Group and all its subsidiaries Reporting Period: January 1, 2010 – December 31, 2010 The report is to give the public a clear and comprehensive understanding of our company’s performance of its social responsibilities. It describes what it has done in terms of improvements of employees’ living standards and community life level, upgrade of customer service, promotion of safety production and enhancement of environment protection. Release and Interpretation of the Report The PDF-formed report is released in 2010-year report. Suggestions are preferred. Department of Investment Securities of Zijin Mining Group Co., Ltd Xiamen, China Tel.: 0592-2933649 Code: 361016 Fax: 0592-2933580 E-mail: [email protected] Preface Chairman’ Statement: On behalf of the company, I would like to express my deepest apologies to the society for our company’s two major accidents happened on July 3 and September 21, 2010, which not only caused social dispute, but also tarnished our brand and damaged our reputation. We remember the painful lessons of 2010, and consider it as a warning in our future development. Therefore, to lay a solid foundation for the future, we will optimize internal management and social responsibilities mechanism. Corporate social responsibilities is an important soft power of the enterprise. Based on our belief of ―harmony helps making profits‖, we dedicate ourselves to creating a harmonious growing environment for the enterprise, the employees, and the community, and our values are embodied in the performance of social responsibilities; we realize that environment protection, safe production, stakeholder’s interest, society advancement and communities’ development are as important as industrial development and company growth. Otherwise, there will be many obstacles in the progress of our company, and thus do harm to the realization of company business objectives. We hope that people from all walks of life could point out our deficiencies. But meanwhile, when people criticize us, Zijin’s ―good deeds‖ shall also be known and felt. We want to make the public understand that the phylogeny of our company contains all that we have done for social responsibilities. Directors and top managements have reviewed the influence of the two major accidents on our company and faced the difficulties during the company development. Under new environment situation, we raise the awareness of unifying thoughts and enhancing confidence. Moreover, the Board has pointed out that development strategy should keep unchanged; environment protection must be given high priority; social responsibilities should be faithfully fulfilled; new round entrepreneurial activities must be unswervingly promoted; management of construction projects and infrastructure should be reinforced, and that innovation is the soul of our development, must be persisted. In the 12th five-year plan, we will adhere to developing Zijin Mining into a high technology-intensive profiting international mining cartel, sticking to our strategic objective, and persisting in internationalization.We do believe that we can be even more successful after we put through the accidents. Your suggestions on our social responsibilities would be appreciated. Sincerely yours Chen Jinghe Chairman of the Board Chapter 1 General Situation of Social responsibilities Management in Zijin Mining I. A Brief Introduction to the Company Zijin Mining Group Co., Ltd is located in Shanghang County, Fujian Province, China. It is a high-tech benefit-oriented super-large international mining group centered on exploration and development of gold and base metals. It was listed in Hong Kong Stock Exchange in December 2003 (Stock name: Zijin Mining, stock code: 2899) and had its Shanghai Stock Exchang A Share listing in April 2008 (Stock name: Zijin Mining, stock code: 601899). At present, its capital stock amounts to 14,541,309,100. With subsidiaries spreading over 20 provinces nationwide and 7 countries oveseas,Zijin is the largest gold producer, second cooper producer and the fifth largest zinc producer in China, as well as a Chinese enterprises with most maintenance if mineral resources. In 2010, the group achieved an income of RMB 28.54 billion, and a total profit of RMB 7.33 billion. By the end of 2010, the total assets of Zijin Mining Group were RMB 3.84 billion representing a double digital increase; net profits to parent Company were RMB 4827 million. By 31 December 2012, the total assets of Zijin Mining Group were RMB 111.65 billion, and the group becomes one of the largest listing companies in the global. At present, Zijin Mining is selected into the Shanhai Stock Exchange 180 Index, Shanhai Stock Exchange 50 Index and Shenzhen 300 Index. II. Strategy and Sustainable Development The overall goal of Zijin Mining Group is to become an international super lager-scale high-tech highly efficient mining group. According to the mid/long-term development plan, our company sets up a ―three-step development‖ strategy before 2020. Firstly, to achieve a leading position in domestic gold industry（realized in 2005） Secondly, to achieve a leading position in domestic mining industry（realized in 2009) Thirdly, to strive to be in a leading position in international mining industry in 2020 At present, the group has already been a leader in domestic mining industry, and it is being on the path toward ranking top in international mining industry. With the rapid development of world economy, Environmental and natural resources problems have been the spotlight and become the bottleneck that restricts further development of economy and society. Being a resource-based company, Zijin Mining attaches great importance to the environment protection, and take local economic development and environment protection as its social responsibilities during its development and construction. To get communities support and to achieve harmonious development with them, which will bring the company immediate and long-term interests, is also the necessary condition for the company to achieve sustainable development. III. Corporate Society Responsibility System Zijin Mining with modern enterprise management has built internal management and control system that enables shareholders, directors, supervisors, and administrators to work appropriately in making decisions. To enhance our social responsibilities, in November 2009, we established ―Department of Key Project & Social Responsibilities‖, which takes charge of prophase key project, coordinating social responsibilities activities, and presides over the establishment and improvement of social responsibilities system. It is also responsible for setting up annual social responsibilities plans, assessing subsidiaries’ social responsibilities performances. The department also evolves in dealing with public and periphery relations, implementing donation plans and organizing charity activities. In February 2010, The Board ironed out ―Social responsibilities Policy of Zijin‖ that guides our work on social responsibilities. In 2010 A special meeting minutes about ―our development and strategy implementation‖ points out that we will attaché great importance to community work, write social responsibilities plan yearly. In order to ensure develop harmoniously with the region where our project company located, we will promote regional economic development, strengthen communication with the locals, and set up correct propagandas for the Group. To promote social responsibilities work, responsibility plan will become part of production and business operating plans of all subsidiaries after 2010. Chapter 2 Shareholders (Investors) and Creditors Rights Protection I. Management of Relationships with Investors and Information Disclose Zijin Mining attaches great importance to maintain good relationships with investors, and formulates policy to manage the relationships. The Department of Investment Securities stages road show and reverses roadshow, presents investor meetings, and investor reception to develop good relations with them. In 2010 alone, more than 100 investors visit our headquarter, Zijinshan Gold & Copper Mine smelter, northwest branch mine, etc. In November 2010, five ministries and commissions including China Securities Regulatory Commission issued ―Opinions On Preventing And Cracking Down Insider Trading In Capital Market‖ (National Office (2010) No.55 Document) which gives a comprehensive planning in terms of insider trading prevention. In respond to government call, the company sets a Securities regulations column in web homepage educate employees. We deeply regret for the information disclose deficiencies, which not only damages our good image of integrity and transparency in stock markets, but leads to investigation by china security regulatory commission in March and July 2010. To ensure normal operation, we will reexamine problem in information disclose, reinforce security regulation trainings, improve cooperate governance, and perfect internal control and management system. II. Key Economic Indicators Key ec onomic indicators (see