Sustainability is at the heart of Alumina Limited’s purpose to ensure long-term shareholder value from our 40 per cent investment in AWAC, our global joint venture with operating partner Alcoa.
Sustainability is a core business issue and a long-term strategy in maintaining AWAC’s competitive edge and safeguarding its license to operate and grow. Irrespective of market highs and lows, our aim is for AWAC to remain sustainable on economic, social and environmental parameters.
Alumina Limited’s Sustainability Report for 2010 – our first report that consolidates information about AWAC’s sustainability performance and explains our own sustainability framework –meets our commitment for high-level transparency and non-financial reporting.
This web-based report addresses the interests of our main stakeholder group – the investment community –in AWAC’s alumina and bauxite assets. It supports Alcoa’s detailed and much respected sustainability report.
Importantly, this report reflects the different roles that Alumina Limited and Alcoa take in the AWAC joint venture. Alcoa, who owns the remaining 60 per cent of AWAC, is responsible for managing its operations.
This has been a long-standing partnership dating back to the 1950s with the discovery of bauxite in the Darling Range in Western Australia, which seeded the origins of AWAC Its success lies in its quality assets, the strength of the joint venture partnership, Alcoa’s management expertise and the commitment to ongoing improvement.
Alcoa is an industry leader in natural resources management and is also independently recognised as a world leader in sustainability. (In 2010 Alcoa was named in the Dow Jones Sustainability Index for the ninth year in a row and recognized by Bloomberg-Maplecroft as among the top three companies in climate-related innovation and carbon management).
From a sustainability perspective these qualities are evident in the drive to increase energy efficiency and reduce greenhouse gas (GHG) emissions - two material issues facing the industry and AWAC.
AWAC’s energy intensity dropped 0.8 per cent over the year to 15.05 kilowatt hours (kWh) of electrical energy for every aluminium kilogram in 2010. In terms of emissions, there has been a continued improvement on a CO2 intensity basis (metric tons of CO2e per tonne of production) with intensity dropping by 12 per cent for the smelting operations and 17.5 per cent for the Australian refineries over the past eight years.
These are long-term challenges and in 2010, Alcoa set ambitious goals for 2020 and 2030 to decrease energy intensity and greenhouse gas emissions, allowing for technology developments, investment and operational decisions to be put in place so targets can be met.
Also of material interest to Alumina Limited has been the passing of the Clean Energy Future legislation by the Australia Federal Parliament in November 2011, which will result in a carbon tax from July 2012. 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 aluminium industry.
We will review the legislation, focussing on the carbon tax’s long-term impact on the competitive position of AWAC’s operations. They are currently among the most efficient in the world and compete in a global marketplace where, in the main, other producers are not subject to carbon pricing.
AWAC’s seven bauxite mines across the globe present a substantial physical footprint that requires responsible and expert management. Bauxite mining disturbs the land and disrupts its biodiversity. Alcoa’s policy is to restore those lands we do impact to the most productive use possible, including, where feasible, re-establishing pre-operating conditions. To do so it has taken a best practice approach in developing and modifying rehabilitation practices.
Mine rehabilitation has been particularly successful in AWAC’s operations in Western Australia and these practices are being applied to the expanding AWAC operations in Juruti, near the Amazon basin in Brazil.
Operating in a region home to indigenous communities and highly bio-diverse environments requires sophisticated sustainability management. So it was significant that Alcoa was named the sustainable company of 2010 by Brazil’s leading business magazine, Exame.
Despite such recognition, maintaining AWAC’s license to operate requires constant vigilance on how its operations affect communities and environments. AWAC’s operations cover seven countries with governments working in different political systems, economies at different stages of development and communities with different cultures and needs.
Rightfully there are increasing expectations and scrutiny from the international community about how multinationals work in such areas.
Sustainability reporting is one way we can provide this scrutiny stakeholders require of our performance on social, as well as environmental and economic parameters.
As this is our first report we welcome your thoughts on how it can be developed as an increasingly meaningful and useful vehicle for understanding AWAC operations and Alumina Limited's business.
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John Bevan Chief Executive Officer
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John Pizzey Chairman |
