Chairman and CEO’s overview

Chairman and CEO’s overview

Thank you for reviewing Alumina Limited’s 2012 Sustainability Update.

The update has been prepared to provide readers with an understanding of the governance structures, sustainability ideals and outcomes of Alumina Limited and its sole business; it’s 40 per cent interest in the enterprise called Alcoa World Alumina and Chemicals (AWAC).


AWAC is the world’s largest single bauxite and alumina producer with interests’ in operations in Australia, Brazil, Jamaica, Suriname, Spain and Texas in the USA. AWAC also has minority interests in an alumina refinery and mine in Saudi Arabia and mining activities located in Guinea and Brazil. AWAC’s 60 per cent majority owner Alcoa, is the manager/operator of the joint venture and is responsible for the development and implementation of AWAC’s sustainability strategies.


Sustainability is a core business commitment shared by Alumina Limited and Alcoa. Put into action, that commitment enables the business to operate more effectively, efficiently and safely, generating benefits to shareholders, employees, the environment and communities in which AWAC operates. That commitment is reflected in key sustainability targets that drive business activity towards improved productivity and results and improved environmental and social outcomes.


AWAC’s sustainability targets and efforts are not focussed on simply achieving short-term benefits or gains, rather they are developed and directed to result in enduring benefits.


Alcoa has developed a process framework of business roadmaps to achieve long-term sustainability goals and sustainability scorecards to integrate sustainability concepts into business process.


The roadmap charts the processes, business decisions and technical improvement to meet long-term objectives. The scorecards concentrate on short-term sustainability goals and their integration into business strategy. The scorecards are also a mechanism to measure progress against shorter-term sustainability goals.


The health and safety of employees is a priority. AWAC’s alumina refineries, mines and smelters are large industrial sites with scope for accidents and environmental incidents to occur. Success is measured through monitoring recordable injury rates, lost work days and the incidence of fatalities. During 2012 there were no fatalities at AWAC sites. Also, AWAC’s total recordable injury rate continued to decline although a year-on-year rise in lost work days was recorded.


Sustainability management also involves the management of material business risks.


In regards to carbon dioxide (CO2) emissions, AWAC’s total 2012 emissions were approximately 1 per cent less than the previous year, relative to decrease in annual production of alumina. Total energy intensity (energy per tonne of production) improved 1.0 per cent compared to 2011 reflecting energy management initiatives in 2012 including transitioning AWAC’s San Ciprian alumina refinery in Spain from a reliance on fuel oil to cleaner more efficient natural gas.


Commencing in July 2012, AWAC’s operations in Australia became subject to the Australian Federal Governments Carbon Tax. The financial impact of the tax on AWAC and Alumina Limited in 2012 was immaterial due to the initial level of assistance afforded by free permits allocated by the Federal Government to energy intensive and trade exposed activities such as the aluminium industry. In the future AWAC will continue to focus on productivity improvements to further reduce its CO2 emissions.


In 2012 AWAC continued to press sustainability improvements in the management of water which witnessed a significant reduction in the withdrawal of freshwater compared to 2011 resulting from improvements that reduce evaporation of production process water and the increased reuse of waste water and fit-for-purpose lower quality water. Improved rainfall patterns and water collection efficiency also contributed to the improvement.


Management of bauxite residue in 2012 resulted in further improvement in the efficiency of storage including a 3 per cent improvement compared to the 2011 result and an almost 12 per cent improvement compared to the baseline year of 2005.


AWAC also made progress during the year to rehabilitate mined land. In 2012 minimum mine footprints were established with the aim to reduce the size of active mined areas. Rehabilitated mine areas exceeded the area disturbed in 2012. The goal is to progressively achieve an overall neutral mining position whereby in 2030 the area rehabilitated annually is equal to the area disturbed. AWAC’s Willowdale mine in Western Australia is effectively operating at that target ratio.


We are very conscious of our responsibility to create positive outcomes for our shareholders, employees, communities in which we operate and the environment. Alcoa through AWAC continues to work on innovative solutions to improve sustainability and ultimately business outcomes.


We trust that you find our report to be an informative and clear account of Alumina Limited and AWAC’s sustainability approach and outcomes and, to assist analysis, the report has been prepared applying the Global Reporting Initiative (GRI) template.


We would appreciate your comments and thoughts on our and AWAC’s sustainability efforts and welcome any feedback you may have in regards to improving our Sustainability Reporting.

We welcome your feedback on how our report can be improved.

 

 

 

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John Bevan

Chief Executive Officer

 

 

 

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John Pizzey

Chairman