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Welcome to Alumina Limited’s 2011 Sustainability update.
Alumina Limited’s sole business is its 40 per cent investment in AWAC, the world’s largest bauxite and alumina business with operations is 7 countries. Mining bauxite and refining the ore into alumina requires a significant amount of energy and natural resources. With the business comes responsibility to exercise good stewardship over the resources used, the social responsibilities of ensuring the safety and wellbeing of employees and respect for and engaging with communities in which AWAC operates. Prudent management of those matters underpin AWAC’s licence to operate its long-life operations.
Alumina Limited is committed to sustainable development and a sustainability plan that is integrated into business strategy. Alumina Limited’s partner in the AWAC enterprise, Alcoa, is responsible for the day-today management of AWAC’s assets including the development and implementation of sustainability strategy, practice and procedures.
Alumina Limited strongly supports Alcoa’s sustainability management. Included in the Dow Jones Sustainability Index for ten consecutive years and named in the Carbon Disclosure Project’s Disclosure Index, Alcoa is recognised within the industry and by sustainability analysts as a leader in sustainability management practices.
This 2011 Sustainability Update utilises the Global Reporting Initiative (GRI) template and is designed to provide clarity and transparency in relation to our sustainability philosophy, governance, and identification of sustainability issues that are material to the company and our stakeholders. Also addressed are sustainability targets and progress made to meeting those targets. Our report supports Alcoa’s comprehensive and widely acknowledged sustainability report.
At Alumina Limited, we believe that sustainability is about the business of working more effectively and efficiently to improve environmental outcomes, improving the quality of life of people impacted by our operations and driving business performance and long-term stakeholder value.
In 2011, under an Alcoa initiative, Sustainability Scorecards (means to integrate sustainability targets with business strategy) and roadmaps (longer term sustainability goals) were rolled out to AWAC sites. These initiatives will place a greater business focus on achieving sustainability goals and will also facilitate improved reporting on progress to meet targets.
Also in 2011, Alcoa amended their 2020 and 2030 sustainability targets for greenhouse gas intensity improvement and freshwater intensity target after successfully exceeding their original 2020 goals. They set a challenging goal of reaching the former 2030 target of 30 per cent improvement in GHG intensity by 2020 and creating a new target of 35 per cent improvement by 2030 from a 2005 baseline. Similarly, the 2030 target of 25 per cent improvement in freshwater-use intensity was brought forward to 2020 and 30 per cent target introduced for 2030. Although these targets apply to Alcoa’s total organisation, they impact on the AWAC operations.
The outworking of Alcoa’s 2011 sustainability initiatives have resulted in improved energy efficiency, reduction in the intensity of GHG emission, improved management of and a reduction in bauxite residue and improvement in employee safety measures. Those results have a beneficial flow on to the physical environment, a positive impact on the communities in which AWAC operates and employee welfare.
AWAC’s alumina production increased by 3.5 per cent compared to 2010 however its total energy usage increased by the lesser percentage of 2.8. Likewise, the percentage increase in absolute terms of GHG emissions rose by 2.62 per cent relative to the 3.5 per cent increase in production levels. Also, the energy intensity to produce 1 tonne of alumina reduced by 1.3 per cent year-on-year.
Health and safety of employees is a key element of AWAC’s sustainability focus. The two main safety metrics of Lost Workdays (LWD) Incident Rates and Total Recordable Incident (TRI) Rates improved through 2011. AWAC’s TRI rates decreased from 2.4 to 1.90 and LWD rates declined to 0.19 compared to 0.31 in 2010 as the organisation strove to meet the goal of zero work-related injuries and illnesses. Elimination of fatality risks is key objective and significant improvements in safety metrics resulted in no employee fatalities registered in 2011. Sadly however, a contractor fatality occurred at the San Ciprian alumina refinery in Spain.
AWAC operates under various jurisdictions. Increasingly governments are seeking legislative change to tackle climate change matters. In 2011 the Australian Federal Government passed the Clean Energy Future legislation that introduced a carbon tax from July 2012. Our focus is on the carbon tax’s long-term impact on the competitive position of these local industries, which are currently among the most efficient in the world, competing in a global marketplace where other producers are largely not subject to a carbon price.
While we support an economy-wide response to the challenge of climate change that incentivises improvements, it is vital to preserve the international competitiveness of the Australian industry.
Also, AWAC's alumina refinery in Spain will be included in Phase 3 of the EU Emissions Trading Scheme in 2013.
In the pursuit to reduce AWAC’s environmental footprint, Alcoa are involved in developing and implementing new technology, part of doing business more effectively and efficiently. Treatment of bauxite residue is an example. Bauxite residue from the alumina refining process is significant; approximately 1.5 tonnes of residue is for every tonne of alumina produced. Residue is being treated to produce materials that can be used in building materials and road construction. Waste CO2 is also utilised to treat the residue correcting alkalinity and making the residue benign for storage and reuse.
We are very aware that AWAC’s sustainability performance, respect for the environment, employee welfare and the communities in which it operates, make it accountable for its licence to operate. At Alumina we support and join with our partner Alcoa in continuing sustainable development.
We welcome your feedback on how our report can be improved.
Chief Executive Officer