Sherritt International Corporation 2010 CORPORATE SOCIAL RESPONSIBILITY REPORT ABOUT SHERRITT Sherritt is a world leader in the mining and refining of nickel from lateritic ores with projects and operations in Canada, Cuba, Indonesia and Madagascar. The Corporation is the largest coal producer in Canada and is the largest independent energy producer in Cuba, with extensive oil and power operations across the island. Sherritt licences its proprietary technologies and provides metallurgical services to mining and refining operations throughout the world. The Corporation’s common shares are listed on the Toronto Stock Exchange under the symbol “S”. Products from Sherritt’s metal refinery are sold in international metal markets. The Corporation’s coal is sold directly to power plants in Canada for electrical generation and into international markets. Electricity and oil are produced in Cuba and sold locally. Other fossil fuel products are sold into local and international markets. HIGHLIGHTS 2010 2009 Revenue ($ millions) 1,771.1 1,474.9 EBITDA ($ millions) 632.0 495.4 Net earnings ($ millions) 214.0 85.7 Nickel produced (tonnes) 33,972 33,599 Cobalt produced (tonnes) 3,706 3,721 Coal produced (millions of tonnes) 38.6 39.3 Net oil production (boepd) 11,956 13,214 Electricity generation (GWh) 2,067 2,167 NOTE: All value figures are in Canadian dollars unless otherwise noted. All volume measurements represent 100% of operations. No adjustment is made to reflect joint venture ownerships. CONTENTS Sherritt’S CSR VISION ____________________1 ABOUT THIS REPORT _______________________2 MESSAGE TO STAKEHOLDERS ______________3 Sherritt’S APPROACH TO CSR AND GOVERNANCE ___________________4 ENVIRONMENT Land, Water, Air ___________________________8 COMMUNITY Economic Benefits, Community Investment _________________ 19 WORKFORCE Safety, Training _________________________ 25 APPENDIX A Figures A-1 to A-13 _____________________ 30 APPENDIX B Climate Change – Background __________ 36 GLOSSARY AND ACRONYMS ______________ 38 Cover photo: Reclaimed Gregg River mine site in Alberta, Canada SHErritt’S CSR VISION Sherritt maintains a long-term commitment to responsible practice by integrating environmental, safety and community considerations into decision-making and building lasting relationships with our workforce, communities and governments. We take a pragmatic and localized approach to sharing the benefits of our business, while minimizing the adverse impacts of development. SHERRItt’S COMMITMENT WORKFORCE: To consider the health, safety, well-being and professional development of our workforce in all decision-making; COMMUNITIES: To ensure local communities near our operations and offices benefit socially and economically from our business; GOVERNMENTS: To build and maintain meaningful and productive relationships with local, regional and national governments in jurisdictions where we operate; THE ENVIRONMENT: To practise responsible and forward-looking environmental stewardship at all operations; SHAREHOLDERS: To be a low-cost operator across all segments of our business and to grow through increased productivity and profitability; PARTNERS: To maintain an open relationship with all our partners and to share with them our success, expertise and experience; and CUSTOMERS: To provide the highest quality of products and the best services possible. Sherritt International Corporation Sherritt International Corporation 1 Forest area beside the Obed Mountain mine in Alberta, Canada ABOUT THIS REPORT Sherritt International’s Corporate Social Responsibility (CSR) Report provides an update on the progress made in the Corporation’s sustainability performance and achievements during the 2010 calendar year. The CSR Report focuses on key areas of interest for Sherritt’s stakeholders – the environment, communities and its workforce. The Report’s main focus is on the primary operations and projects of the Corporation during 2010. Data has generally been included for either all available years or for the 2006 to 2010 period. This Report reviews Sherritt’s performance as a socially responsible corporation. Sherritt has made, and will continue to make, adjustments to its reporting in response to regulatory changes and economic circumstances. Further, as a result of certain methodology changes or corrections, some of the comparative information from prior years has been updated. All material information contained in this Report has been compiled from publicly disclosed information derived from Sherritt’s ongoing, established information gathering processes. Sherritt collects such information internally for the purpose of the safe, efficient operation of its business, as well as for regulatory compliance. All data presented has been internally verified for accuracy and reliability. Some data, such as that produced for regulatory compliance, is both internally verified and reviewed by the appropriate government agency to ensure that our operations are in compliance with relevant regulations. Data on greenhouse gas (GHG) emissions from operations that are large final emitters of GHGs in Alberta has been externally verified by an independent third party as required by provincial regulation. The Corporation determines materiality of information, both tracked and reported, based on its commitment to observe the applicable laws and regulations governing its activities, and for the purpose of meeting its internal requirements for responsible operations. Information may change from one report to another as a reflection of changes in those requirements. Certain data presentations and comparisons may not meet all the direct needs of all stakeholders. Further reference should be made to the Corporation’s 2008 and 2009 CSR Reports or to Sherritt’s website at www.sherritt.com. Readers are encouraged to contact Sherritt at [email protected] with enquiries about the Corporation’s reporting. Sherritt International Corporation Sherritt International Corporation 2 MESSAGE TO STAKEHOLDERS In 2010, Sherritt continued its strong CSR performance. At Sherritt, that is our normal way of operating and it translates into ensuring that we do things the right way. It is simply good business and represents our pragmatic approach to operating our business in a responsible manner while sharing the benefits of its success. The right way at Sherritt is the safe, a lost time injury. These are major The resource industry is by nature responsible way that values our accomplishments and I congratulate a long-term investment for both the workforce, our communities and the all of our operations for continuing to company and its host communities. environment in which we operate. place safety as a priority in their work. Making the right start can make This attitude is reflected in our strong the difference between success and record for safety at our operations, Despite these good results and our failure. Our positive experiences in our long-term relationships with both best efforts, I regret to report that Madagascar will now be deployed governments and communities in we suffered a fatality in Madagascar in Indonesia where Sherritt is jurisdictions that host our operations when an employee of one of our undertaking work that would result and in the care with which we treat the subcontractors jumped from a moving in us acquiring a controlling position environment around those operations. vehicle while being transported home in the Sulawesi Nickel Project in that Sherritt has always operated in this from work. The investigation that country. Initial process development way and continues to do so at all our followed resulted in additional training and resource delineation has already projects and operations. and procedures for worker transport. started and will be coupled with a A single fatality is unacceptable to well-defined stakeholder engagement We demonstrate our commitment to Sherritt and redoubles our focus on process and environmental program. responsible operation in many ways. ensuring a safe operating environment We make sure that our workforce is in all our businesses. Sherritt is proud of its history of safe by ensuring that our operations sustainable operations and responsible have all appropriate safety procedures We work in our communities to ensure community relations. We will continue in place, that the equipment that they that the benefits of our operations are to reflect that history in our dynamic are asked to use is properly maintained shared fairly. The long-term nature of future opportunities and in established and that both the workforce and the our businesses means that we strive to operations wherever they are located. company are aware of possible hazards be responsible and respected members so they can be avoided. Sherritt is of the community. We consult with proud to again report exceptionally stakeholders, contribute to the low incidence of workplace injury in well-being of the communities and the 2010 at its operations. governments around us, and work to ensure that the physical and economic In 2010 the Genesee mine was again environment remains healthy. awarded the John T. Ryan award for safe operations. Also in 2010, Our care for the workforce, the Sherritt International Corporation Genesee passed its 22nd year with no communities and the environment 3 recordable lost time injuries. Genesee has been of critical importance as is not alone in reporting good safety we have moved forward to complete results. Sherritt’s other coal mines construction of the