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Xstrata Copper North QueenslandSustainability Report 2007

Scope of this report

This report details the health, safety, environment and community (HSEC) performance of the Xstrata Copper North Queensland Division from 1 January 2007 to 31 December 2007. This includes the HSEC performance of Xstrata Mount Isa Mines copper operations, Ernest Henry Mining, Copper Refineries Pty Ltd, and Townsville port bulk handling facility.

This report is also available online at www.xstrata.com/corporate/commodities/copper/publications or as a hardcopy on request from late May 2008.

Please note all monetary values are expressed in Australian Dollars unless otherwise stated.

Our sustainability report is designed to share our progress with you and we welcome your feedback. Please email your comments to [email protected], or write to Community Relations, Private Mail Bag 6, Mount Isa, Queensland, 4825, Australia.

Contents

Xstrata at a glanceXstrata is a global diversified mining group, listed on the London and Zürich Stock Exchanges, with its headquarters in Zug, Switzerland. Xstrata’s businesses maintain a meaningful position in seven major international commodity markets: copper, coking coal, thermal coal, ferrochrome, nickel, vanadium and zinc, with recycling facilities, additional exposures to gold, cobalt, lead and silver and a suite of global technology products, many of which are industry leaders. The Group’s operations and projects span 18 countries: Argentina, Australia, Brazil, Canada, Chile, Colombia, the Dominican Republic, Germany, New Caledonia, Norway, Papua New Guinea, Peru, the Philippines, South Africa, Spain, Tanzania, the USA and the UK. Xstrata employs approximately 56,000 people, including contractors.

Xstrata Copper is headquartered in Brisbane, Australia, with regional offices in Santiago and Antofagasta, Chile; Lima and Arequipa, Peru; Buenos Aires, Argentina; and Toronto, Canada, and is one of the commodity business units within the major global diversified mining group Xstrata plc.

Xstrata Copper’s mining operations and projects span seven countries and include mines, mineral processing plants and port facilities in North Queensland, Australia; mining and processing operations and port facilities in Chile, Peru and Argentina in South America; and mining and processing plants in Canada. It also has a recycling business (Xstrata Recycling) with facilities in Canada, the United States and Asia.

Xstrata Copper is the fourth largest global copper producer, with an annual managed production of over one million tonnes.

2 Chief Executive’s message

4 Chief Operating Officer’s message

6 Our approach to sustainable development

8 Governance and management systems

10 Operations and economic contribution

12 Targets and scorecard

16 Caring for our people

16 Health and safety

17 Performing Safely

18 Crisis and emergency preparation

18 Occupational health

18 Managing lead

20 Copper Innovations

23 Employment

23 Employee training and education

25 Diversity and opportunity

25 Labour relations

26 Caring for our environment

26 Environmental compliance

27 Mount Isa Mines Limited Agreement Act

27 Materials

27 Energy and greenhouse

29 Water management

30 Biodiversity

30 Emissions

32 National Pollutant Inventory

33 Smelter Emissions Project

33 Waste

34 Mine closure planning

36 Caring for our community

36 Xstrata Community Partnership Program

37 Sponsorships and community donations

37 Indigenous peoples and cultural heritage

39 Stakeholder engagement and consultation

42 Valuing feedback

44 GRI index

IBC Glossary

SuSTAINABILITy REPORT 2007 1

Xstrata Copper’s North Queensland Division is headquartered in Mount Isa and comprises the Mount Isa

copper operations consisting of the Enterprise and X41 underground copper mines, the copper concentrator,

Mount Isa copper smelter, Ernest Henry Mining open cut copper mine, located in Cloncurry, the Townsville

Copper Refineries Pty Ltd (CRL), and Townsville port operation. Together, the Xstrata Copper North

Queensland Division employs more than 3,300 employees and contractors.

Xstrata Copper North Queensland

Map of Operations

QUEENSL AND

Townsville

Mount IsaCloncurry

AUSTRALIA

Brisbane

2007 Production Facts

Mount Isa Mines copper operations

Ore 6 million tonnes per annum of ore mined at two underground copper mines: Enterprise and X41

Copper in concentrate 172,552 tonnes of copper in concentrate produced

Copper in anode 217,907 tonnes of copper in anode produced at the smelter

Plants 1 concentrator – 7.2 million tonnes per annum capacity; 1 copper smelter – 300,000 tonnes per annum capacity

Ernest Henry Mining

Copper ore 11.54 million tonnes of ore mined 11.1 million tonnes of ore milled on-site

Copper in concentrate 95,846 tonnes of copper in concentrate

Gold in concentrate 123,305 ounces of gold in concentrate

Copper Refineries Pty Ltd

2007 production 231,959 tonnes of copper cathode

Townsville Port

2007 production 941,719 tonnes concentrate and 849,503 tonnes fertiliser

Bowen

2 XSTRATA COPPER NORTH QuEENSLAND

Chief Executive’s message2007 has been another successful year for Xstrata Copper’s business activities.

During the year we consolidated our position as the industry’s fourth largest

copper producer, having more than doubled in size in the second half of 2006.

By integrating our new Canadian and South American businesses into Xstrata Copper through the establishment of three new, regionally-based operating divisions and the development and implementation of common systems across our organisation, we have strengthened our business and culture and are now well positioned to continue to take advantage of further growth opportunities to achieve our objective of becoming the recognised leader in our industry sector.

In a dynamic global business environment characterised by increased demand for commodities, higher commodity prices, and industry consolidation, we remain focused on the core aspects of our business. We continue our drive to maximise value for our shareholders through our business initiatives, whilst approaching with discipline and vigour

our sustainable development goals related to maximising the talent development of our people, responsible management of the environment, establishment of mutually beneficial relationships with communities, governments and other stakeholders and above all ensuring the safety of our own people.

Tragically, despite significant overall improvements in many of our statistical safety performances, in 2007 we suffered two fatal accidents, one at the Kidd Mine in Canada and one at Alumbrera in Argentina, and in the early part of 2008, another at Tintaya in Peru. These fatalities shocked and deeply saddened all of us in Xstrata Copper. Following the deaths of Lyle Dufoe, Sergio Morales and Efraín Merma, we are even more determined to achieve our overall strategic objective of injury-free work environments and to realise further substantial improvements in our safety performance.

During the year we remained focused on maintaining and improving our reputation for excellence in environmental management and social responsibility. Key to this was the implementation of a new sustainable development framework, which is aligned with the International Council of Mining and Metals' (ICMM) Sustainable Development Principles.

Some of Xstrata Copper’s highlights for 2007 are listed below against the relevant goals that we had set for the year. More details about Xstrata Copper’s sustainability performance are provided in this report and in the other sustainability reports produced by our operating divisions and development projects.

Consolidating our operating performancesIn 2007 we consolidated our operating performances to achieve improvements including:

increases in ore processed at all of ■

our major open pit mining operations, including Alumbrera, Ernest Henry, Tintaya, Collahuasi and Antamina;

the expansion of smelting and refining ■

capacities in North Queensland, Australia;

real unit Cost savings of uSD68 million ■

across the operations;

a 26% increase in recycled material ■

processed at the Horne smelter in Canada;

the construction of a molybdenum ■

processing facility at Alumbrera in Argentina;

approvals of expansions at ■

Lomas Bayas mine and Altonorte smelter in North Chile.

Preparing for future growthXstrata Copper has six major copper projects in its development pipeline. In 2007 all six met their evaluation timeframes and advanced to the next stage of development. In early December Xstrata Copper and Bechtel, the world's leading engineering, procurement and construction management consultants in the copper industry, announced a 10-year strategic alliance that will facilitate the development of our projects.


Towards injury-free, safe work environmentsOur work to create and sustain injury-free, healthy work environments for our employees continued in 2007. In pursuit of our zero harm objective, we achieved a 14% reduction in the Total Recordable Injury Frequency Rate (TRIFR) across our operations. As a result of the integration of the former Falconbridge copper assets into Xstrata Copper, great improvements were made in the Canadian and North Chile divisions which achieved 34% and 46% reductions in TRIFR respectively.

In 2008 we will redouble our safety efforts with a goal to achieve zero fatalities and a further 25% reduction in the Total Recordable Injury Frequency Rate (TRIFR) to less than 8.4 (injuries per million hours worked).

Towards leadership in environmental performanceIn 2007 our worldwide emission improvement programs made significant steps towards bringing all of Xstrata Copper’s sites up to the best-in-class standards that are in place at our Kidd Metallurgical Site in Canada. These are delivering improvements in sulphur dioxide, arsenic and lead emissions management at the Altonorte smelter in North Chile, the Horne smelter in Canada and the Mount Isa smelter in North Queensland.

Environmental staff from our expanded global operations came together for an environmental forum during the year to examine risk and closure issues, and to progress the implementation of a common standard for environmental management systems across the business.

In 2008 we will aim to have this common standard in place and to introduce an agreed new framework and guidelines for managing site closure.

Reputation for social responsibilityIn 2007 our social responsibility activities were diverse: as examples, we helped to build medical clinics in Argentina; assisted children to become the first ones in their family to learn to read in the Philippines; and gave farmers who live near our Las Bambas project in Peru the training and equipment to revolutionise local farming methods and improve their families’ standard of living.

These programs and the many others we fund and manage in South America, Canada, Australia and the Philippines contribute to improving:

local and community government ■

capacity;

nutritional levels in communities; ■

local production capabilities; ■

health facilities and services; and ■

literacy and education facilities ■

and programs.

They also aim to assist communities in the efficient management of their own resources and natural resources.

In 2008 we will continue to refine and develop our social responsibility programs and further assess community relations activities and opportunities related to project development.

I hope this report provides you with useful information about our business activities as well as our performance for the past year and targets for the coming year in key sustainable development areas. I recommend it, and our other sustainability reports, to you as a record of Xstrata Copper’s commitment to sustainable development and of our plans for continual improvement in such vitally important areas as we continue on our growth trajectory.

Charlie Sartain Chief Executive Xstrata Copper

Xstrata Mount Isa Mines at sunset

Chief executive’s message


Chief Operating Officer’s messageAt Xstrata Copper, our commitment to the principles of sustainable development is based on our

belief that operating responsibly and to the highest standards mitigates risks, creates opportunities

and enhances our reputation and competitive position.

In 2007, Xstrata Copper’s North Queensland Division continued to build on its strong safety, health, environment, and social performance track record to achieve solid improvements in all these key sustainable development areas.

It was also another exciting year for the division as we marked a number of operational milestones, including:

commissioning of our $38 million gas- ■

fired Xstrata Power Station at Mount Isa to help service the short-term needs of our expanding operations;

approval of a $26 million development ■

for an underground decline at the Ernest Henry open-pit copper-gold mine near Cloncurry; and

completion of the upgrades to the ■

Townsville copper refinery tankhouse to increase its capacity to 300,000 tonnes per annum.

Ensuring a safe workplaceOur focus on injury-free, healthy work environments resulted in further improvements in our safety performance in 2007. We aim to operate with ‘zero harm’ and believe that all work-related illness and injuries are preventable. I am particularly pleased to report that our Lost Time Injury Frequency Rate (LTIFR) decreased across all our north Queensland operations.

We also implemented the 5S system at our Mount Isa and Townsville sites. The 5S system is a process and a method for creating and maintaining an organised, clean, high performance workplace. The ‘sort, set in order, shine, standardise, and sustain’ system has led to a significant improvement of the sites’ housekeeping and hazard reduction activities. Ernest Henry Mining will implement 5S at their site during 2008.

Our site-based innovation awards program continued to generate a range of practical solutions to safety, health and operational issues across the North Queensland Division. The calibre of the 2007 submissions was impressive and I would like to thank all employees participating in the program for their commitment to creating a safer work environment.

These innovations complemented the work we undertook throughout the year to safeguard the health of our employees, such as the construction and commissioning of a new exhaust air vent rise which will improve ventilation to our underground Enterprise copper mine in Mount Isa.

The Townsville copper refinery’s development of a secondary mould pin lifter to automatically push up copper anodes during the casting process, to remove them from the casting moulds, has eliminated the requirement for our operators to physically place the wedge under the anode to keep it elevated. Innovations like these make a real difference to our safe work practices and help us achieve our goal of zero harm.

Committed to the highest standards of environmental practiceWe are committed to the highest standards of environmental management and we continued to make significant environmental improvements at all our north Queensland operations in 2007.

Through the efforts of our Energy Breakthrough team, we increased energy and greenhouse gas efficiencies across the division and identified further opportunities for improvement. The commissioning of our low-emission gas-fired power station at Mount Isa was a milestone event as it will enable us to increase our level of productivity while reducing our carbon footprint relative to other technologies. This year also marked the first full-year in which our Townsville copper refinery ran both its furnace and boilers on natural gas, contributing to our energy efficiencies.

Effective water management and conservation is critical to the long-term viability of our North Queensland operations and our focus is on minimising freshwater usage and maximising process water usage. To this end, throughout the year our division continued to use real-time monitoring of freshwater usage and explore alternative sources to freshwater including harvested stormwater, underground mine de-watering, recycled water from plant operations and tailings processing, and waste water from neighbouring operations.

2007 saw our Townsville operations continue their active membership with the Townsville Port users Group. As a member of the Environmental Working Group, we helped establish an environmental management strategy aimed at consistently addressing issues of dust, noise and potential contamination at the Townsville Port. We also progressed a long-term sustainable land use strategy for land Xstrata Copper owns located within the Townsville State Development Area, to help ensure land use, transport efficiencies, and particularly access to the Townsville Port are compatible with Local and State Government policy objectives.

In Cloncurry, Ernest Henry Mining completed a Social Impact Assessment to start addressing the socioeconomic considerations of mine completion. We also made significant advances in mine completion planning which included a long-term groundwater model as well as the installation of an instrumented field performance trial to test the long-term sustainability of proposed capping designs for our tailings dam.

As part of our proactive approach to managing emissions and our environmental impact, we commenced a Whole of Emissions Study into Land, Air and Water at Mount Isa. Conducted by world renowned toxicologist, Associate Professor Barry Noller, from the university of Queensland’s Centre for Mined Land Rehabilitation, this study will continue over the next three years and assess whether there are any non-natural forms of lead in the community. It will also examine potential pathways for lead to enter the community from our operations via land, air and water and any potential risk to human and ecological health these may pose.

In July 2007 we also established a Smelter Emissions Project team to assess opportunities to improve the capture and treatment of sulphur dioxide emissions to a target of 95% by 2012 at our Mount Isa copper smelter. This team will build on the substantial improvements we have already made in reducing emissions at Mount Isa since Xstrata acquired the operation in June 2003. Importantly, lead measured in airborne dust at all statutory monitoring stations in the Mount Isa community remained below World Health Organisation guidelines.

Caring for our communitiesXstrata Copper’s highest priority is the health and safety of our employees and the communities in which they live. Our corporate social involvement programs aim to enhance the health, education and other social capacity of our communities in North Queensland and our objective is to minimise any environmental impact of our operations on the community.

Xstrata continued to invest in a wide range of initiatives to benefit North Queensland in 2007 and we are proud to play an important role in growing and sustaining North Queensland’s economy and communities. In 2007 alone we contributed over $1.4 billion to the Queensland economy. In total we have committed almost $6 million to community initiatives in Mount Isa, Cloncurry and Townsville from 2007 to 2010, with $1.5 million committed in the past year.

The Xstrata Community Partnership Program North Queensland is now well established and, together with the sponsorship and donations program we fund and manage in the region, helps improve local government and community capacity; health facilities and services; and education facilities and programs. These corporate social involvement programs were also guided in 2007 by the results of our biennial Community Attitudes Survey undertaken in June in our North Queensland communities.

Living with Lead in Mount IsaOur state-of-the-art environmental air quality monitoring system measures levels of sulphur dioxide, heavy metals and dust throughout the city to ensure we operate within acceptable limits. Because Mount Isa is also situated in a highly mineralised region with high levels of naturally occurring lead, we work with State and local government partners to ensure people are aware of the measures they can take to minimise their exposure to lead. We have also provided free blood lead testing to community members for the past 15 years.

In December 2007, Queensland Health achieved its target of testing 400 children aged 1 to 4 through the Get Bled for Lead screening program, launched in September 2006. Xstrata promoted this campaign in the workplace and in the broader community throughout the year. Initial findings from the study indicate that 11% of children tested were found to have blood lead levels in excess of 10 micrograms per decilitre. These children are being case-managed by Queensland Health. Two children tested with blood lead levels in excess of Queensland Health’s medical intervention level of 20 micrograms per decilitre and have been referred to a paediatrician. We look forward to the publication of the full report by Queensland Health in May 2008.

I also joined the Living with Lead Alliance in March 2008 as a result of regular meetings during 2007 with key community leaders, and as Xstrata Mount Isa Mines’ official representative. The Alliance seeks to provide the Mount Isa community with information to help to minimise their exposure to naturally occurring and non-natural sources of lead. The Alliance also formalises our strong track record of working with key stakeholders to raise the awareness of living with lead. The second Panel Assessment’s Community Perceptions Survey on air emissions was also completed during the year.

Looking forward, our key priorities for the coming year in this area are to complete the Leichhardt River Remediation Project, progress the Whole of Emissions Study into the sources of lead in the community, and to publicly release the results of the Community Perceptions Survey on air emissions in May. At the same time, we will continue to identify and implement improvements to emissions capture and treatment to achieve our target of world-leading standards and work together with government, the local council and other community members through the Living with Lead Alliance to help Mount Isa residents minimise their exposure to lead.

Going forwardXstrata Copper remains committed to the communities of North Queensland and to continuing our leadership role in sustainable development in the region. This report details the efforts our people have made over the last year to improve our operations and to reach our sustainability goals. I recommend it to you as a record of our commitment to sustainable development and of Xstrata Copper’s plans for continual improvement in these vitally important areas as we continue on our path of growth.

I hope you find our report both interesting and informative. We have an exciting future ahead of us and I look forward to keeping you updated on our progress.

Steve de Kruijff Chief Operating Officer Xstrata Copper, North Queensland Division



Our approach to sustainable developmentXstrata Copper invests for the long-term in mining and processing operations and projects that

provide the basic materials for social and economic development. Although the lifespan of our

activities is finite, we aim to invest in skills, social development and economic benefits that outlive

these activities in any particular region.

We aspire to the highest standards of business conduct, set out in Xstrata’s Statement of Business Principles to protect and enhance our corporate reputation and ensure ongoing access to mineral resources.

We aim to create value for our stakeholders and contribute to a sustainable environment through investments in our businesses to improve their performance efficiency, to ensure the efficient use of resources such as water and energy and to maintain safe and healthy workplaces.

To ensure harmonious relationships with our stakeholders, minimise risk and secure an ongoing licence to operate we aim to create mutual benefits for stakeholders, working in partnership with the various parties who have an interest in or are affected by our business.

Xstrata Copper’s Sustainable Development Policy, strategy and management framework During 2007 Xstrata Copper revised its approach to Sustainable Development. Our new approach is aligned with the International Council of Mining and Metals’ (ICMM) Sustainable Development Principles (see http://www.icmm.com/icmm_principles.php). It encompasses a systematic approach of setting targets, monitoring performance and reporting (both internally and publicly) against our targets in each of the key sustainability areas. This is consistent with how we were already operating across most of our businesses.

We are confident these new sustainability strategies will allow us to more effectively implement our Strategic Objectives and demonstrate commitment to our Values, while operating our business in a way that is consistent with our Definition of Purpose.

Xstrata Copper’s definition of purposeWe will maximise value for shareholders by successfully growing and managing an industry-leading portfolio of copper assets that deliver superior returns.

We will achieve this in a safe, environmentally and socially responsible way, in open partnerships between our people and with communities, governments and other stakeholders.

Jade Munari, Copper Mine Planning Engineer, prepares to go underground


Our approach to sustainable development

The Global Reporting Initiative (GRI) This report has been prepared in accordance with the Global Reporting Initiative’s (GRI) Sustainability Reporting G3 Guidelines. As the world’s most widely used sustainability reporting framework, these guidelines set out the principles and indicators for organisations to measure and report their economic, environmental, and social performance.

In line with Xstrata’s sustainability reporting, Xstrata Copper is using the G3 Guidelines to enable readers of our sustainability reports to benchmark our HSEC performance with respect to laws, norms, codes, performance standards and voluntary initiatives; and to compare our HSEC performance over time.

A GRI index detailing how we have addressed the G3 Guidelines can be found on page 44 of this report.

Quality assuranceThe numerical data in this report has been verified both within the Xstrata Copper commodity business and the Xstrata Group. The data management and reporting systems in place for the collation and aggregation of data are subject to an annual assurance by an independent verifier.

Much of the qualitative, text-based data in this report was gathered via an Xstrata-wide sustainability survey. This data is reviewed by an independent external verifier as part of Xstrata’s Corporate HSEC Assurance Program.

Xstrata Copper North Queensland also adheres to a number of international certifications including AS-4801 – Occupational Health and Safety Systems, ISO-14001 – Environmental Management Systems, ISO-9001 – Quality Assurance Systems, and OHSAS-180001 Occupational Health and Safety Management Systems.

Our strategic objectives

injury-free, safe work ■

environments;

recognised leadership in ■

environmental performance;

reputation for social responsibility; ■

realisation of the full potential ■

of our people;

achievement of the full capacity ■

of our physical assets;

cost competitiveness through ■

the cycles;

value creation through dynamic ■

growth and continuous improvement; and

effective implementation ■

of common key systems and strategies.

Our values Our decisions and actions will demonstrate the following values:

honesty; ■

dependability; ■

respect; ■

confidence; ■

ingenuity; ■

courage; and ■

passion. ■

Precautionary approach Xstrata Copper takes a precautionary approach to the environmental management of its global activities. We, therefore, use a comprehensive risk-based approach to manage the potential detrimental impacts of our activities. This approach means that even in the absence of evidence that environmental degradation is occurring or will occur, we take action to mitigate the possibility that it will.

Principal MembershipsXstrata Copper is a member of the Queensland Resources Council (QRC), the Minerals Council of Australia (MCA), Australian Institute of Mining and Metallurgy (AusIMM), the Mining Industry Skills Centre, skills DMC – National Industry Skills Council, the Australian Institute of Occupational Hygienists (AIOH), and the Queensland Minerals and Energy Academy (QMEA).

AwardsXstrata Copper and Xstrata Zinc made a joint submission into a number of categories of the The Premier of Queensland’s Export Awards 2007 for our respective operations at Xstrata Mount Isa Mines. In 2007 we won the:

Townsville Region ‘Minerals and ■

Energy Award’;

Queensland Japan Chamber of Commerce ■

and Industry’s ‘Large Advanced Manufacturer Award’; and

the Queensland ‘Minerals and Energy ■

Award’, which qualified us to be a finalist in the Minerals and Energy category of the Australian Export Awards 2007.

Xstrata Copper’s Ernest Henry Mining received a commendation for its Women in mining submission to the Queensland Resources Council’s Resources Award for Women – ‘Best Company Initiative’. Our Townsville operations did not nominate for any awards in 2007.

Environmental Advisor, Patrick Windsor, overseeing

preparation for the rehabilitation process at Ernest Henry Mining


Xstrata Copper operates within the structure of Xstrata’s global policies and HSEC management standards. This approach is supplemented by Xstrata Copper’s own common systems and policies in the areas of safety and heath, environment, community, risk management, human resources and sustainable development.

Xstrata Copper’s performance against our HSEC systems, policies and standards is monitored and evaluated by the Xstrata Copper HSEC Committee. The HSEC Committee meets monthly to review the HSEC performance and issues throughout the Business unit’s operations and projects. Through the Xstrata Copper Board, the Business unit’s HSEC performance is reported to the Xstrata Executive Committee.

Xstrata Copper’s North Queensland Division does not have a specific governance committee, however, HSEC Committees operated at all of its site operations.

Human RightsXstrata’s Business Principles contain our endorsement of the principles set out in the uN universal Declaration of Human Rights and the International Labour Organisation Conventions.

For Xstrata, the main areas of focus are protecting the rights of our employees and contractors to work for equal pay, to associate freely, to a safe and healthy work environment, to non-discrimination and fair treatment and to legal rights. We also support the rights of employees, community members and other stakeholders to be treated with dignity in a manner that respects cultural heritage, traditions and norms.

In areas where we employ security personnel (either directly or as contractors) to protect our people and assets, we ensure that appropriate human rights training has taken place and monitor compliance with our Business Principles, HSEC policy and standards, in line with Xstrata’s management standard for suppliers, contractor and partners.

The Xstrata Copper North Queensland Division ensures that 100% of its Human Resources employees are trained in Human Rights. In 2007 100% of our security staff trained on Human Rights policies. In 2008, we are looking to extend this training to other key employees throughout our operations.

Governance and management systemsXstrata is committed to the highest standards of health, safety and environmental performance,

community cooperation and to the principles of sustainable development. The Xstrata HSEC

standards and policies were developed around the ICMM principles of sustainable development

and global leading practice management systems.

Mount Isa Copper Operations N3500 C Crew discuss safety issues at the PASS meeting prior to the start of shift


Governance and management systems

Child and forced labourXstrata’s Business Principles uphold the elimination of all forms of forced or compulsory labour and stipulate that no form of child or forced labour will be tolerated. All Xstrata operations report the age of their youngest employee or contractor on an annual basis and are audited through the internal audit risk management program.

CorruptionXstrata’s Business Principles state that we do not offer, solicit or accept any form of inducement or bribe. Xstrata’s internal audit function, supported by KPMG, takes into account identified fraud and compliance risks associated with our key business activities, including the ethical performance expectations contained in our Statement of Business Principles.

In addition, Xstrata Copper’s Fraud Policy explicitly states that the organisation will not tolerate any incidence of fraud committed by employees or others, either from within or outside the organisation and will take immediate and serious action against those persons committing a fraud, irrespective of length of service or position. It outlines the channels available for employees or others to safely and confidentially report fraud or other unethical behaviour that is contrary to the Xstrata Business Principles.

The risk of corruption is analysed throughout the entire Xstrata Copper North Queensland Division. Our risk is considered low and no incidents of corruption were recorded at our operations in 2007.

We ensure that all employees use the Delegated Authorities Manual that sets out the framework and controls for key decisions to be made. Further, the Internal Audit Function regularly tests the adequacy of these controls particularly in relation to the procurement of goods and services. This ensures that business dealings are always conducted in a competitive environment.

Public policy participation and political contributions Xstrata’s Corporate Social Involvement Policy prohibits political contributions of any kind. Xstrata plays an active role in a number of significant international and national industry organisations and multi-stakeholder groups, through membership, funding, provision of expertise and participation in committees and working groups.

Xstrata Copper plays a similar role in organisations that are copper-specific and those that are unique to geographical areas where Xstrata Copper is the only Xstrata commodity business in operation.

Key activities among Xstrata’s global public policy participation commitments are our membership of the International Council of Mining and Metals (ICMM), and our support of the Extractive Industries Transparency Initiative (EITI).

In 2007 the Xstrata Copper North Queensland Division did not make any financial or in-kind contributions to political parties or individuals.

Discrimination policyAs outlined in Xstrata’s Business Principles, we value the contribution made by employees, and our policies and practices respect their personal dignity and rights. We do not tolerate any form of workplace discrimination, harassment or physical assault. In 2007, Xstrata Copper did not record any incidents of discrimination at its North Queensland operations.

“Xstrata Copper’s North Queensland Division does not have a specific governance committee, however, HSEC Committees operated at all of its site operations.”

Denise Gibson, first year electrical apprentice, wires a simulated

domestic installation at the Xstrata Skills Centre in Mount Isa


Operations and economic contribution Xstrata Copper’s North Queensland Division continues to generate employment opportunities,

support local businesses, fund community projects and contribute to government taxes and charges.

In doing so, we clearly bring substantial benefits to the communities in which we operate.

oxygen plants also continued with completion scheduled for mid-2008. The slag cleaning furnace project is being further evaluated and was placed on hold.

The slag milling copper recovery project was under construction in 2007. Copper is recovered from our slag product through the processes of grinding and flotation. Completion and commissioning of this project is scheduled for mid 2008. Also during the year, we continued the ongoing development and production from the Northern 3500 orebody.

Mount Isa Mines commissioned its $38 million 30 megawatt gas fired, low emission Xstrata Power Station (XPS) in November. The XPS will help meet the short-term needs of our expanding operations in Mount Isa. It will also supplement our short-term energy requirements over and above what can be reliably and cost-effectively supplied from the nearby Mica Creek Power Station owned by CS Energy.

Ernest Henry Mining

The Ernest Henry copper-gold deposit, located 38 kilometres north-east of Cloncurry, is the third largest copper deposit in Australia. In 2007, 40.4 million tonnes of

material was mined, producing 11.5 million tonnes of copper ore and 95,846 tonnes of copper in concentrate. In addition to copper, more than 123,305 ounces of gold in concentrate was produced in 2007.

The Ernest Henry mine copper concentrator is a single line plant using contemporary equipment, designed to treat 9 million tonnes of ore a year which equates to treating nominally 1,200 tonnes per hour. Tailings are pumped to an engineered tailings storage facility for long-term containment. The concentrate is either transported by road to Mount Isa, where it is smelted before being sent to the Townsville copper refinery to be refined, or the concentrate is exported to overseas markets through our Townsville port operation.

In 2007, Ernest Henry Mining’s copper head grades were 4.5% higher than in 2006 in line with the mine plan developing through the higher grade ore of the orebody. The softer ores associated with the higher copper grades and mine-to-mill improvements resulted in a 7.9% increase in ore milled on-site and a 14.2% increase in copper-in-concentrate production compared to 2006. Gold production increased in 2007 by almost 17% due to the higher head grades and ore milled on-site.

A $26 million allocation to conduct a feasibility study into developing an underground decline was approved for Ernest Henry Mining in 2007. This project will have the potential to extend the life of the operations for an additional 10 years.

Townsville operations

Xstrata Copper’s Townsville copper refinery and port operation form a major part of the North Queensland Division. CRL refines Mount Isa produced anodes (99.7% pure copper) to copper cathode for domestic and international sale as ISA brand 99.995% pure copper. In 2007, CRL produced 231,959 tonnes of saleable cathode.

Anode casting, Townsville copper refinery

Our operationsXstrata Copper’s North Queensland Division consists of:

Mount Isa copper operations, ■

metallurgical operations including the Mount Isa copper smelter, and administration and services;

Ernest Henry Mining open cut copper ■

mine near Cloncurry;

Copper Refineries Pty Ltd (CRL) ■

in Townsville; and

Townsville port operation. ■

Mount Isa Mines

In 2007 Mount Isa Mines copper operations produced 6 million tonnes of ore, 172,552 tonnes of copper in concentrate, and 217,907 tonnes of copper in anode using state-of-the-art mining and processing technologies. The copper concentrator and copper smelter have a 7.2 million and 300,000 tonnes per annum throughput capacity respectively.

In 2007, the expansion of the copper smelter continued. The slag and revert crushing and screening plant was completed in May and placed into service. Construction of the new


Operations and economic contribution

The Townsville port operation handles mineral concentrates in and out of the port, and fertiliser out of the port. In 2007, the port operation shipped a total of almost 1.8 million tonnes of product comprising 973,550 tonnes of concentrates and 849,503 tonnes of fertiliser.

MarketsXstrata Copper’s product is road freighted from Ernest Henry Mining to Xstrata Mount Isa Mines for smelting. Any copper concentrates, including those from Ernest Henry, that are surplus to smelting requirements at Mount Isa are delivered into the export market. The main export market is China and some concentrates are also exported to India.

From Mount Isa the copper anodes are transported by road and rail to our copper refinery in Townsville where they are refined into copper cathodes. Approximately one third of our copper cathode production is placed into the Australian domestic market. The remaining material is exported to markets in North Asia and South Asia including Taiwan, South Korea, China, Vietnam, Malaysia and Thailand.

Local suppliersXstrata Copper’s North Queensland Division supports local businesses by consciously sourcing goods and services from local suppliers wherever possible. Our policy is to source local suppliers who provide value for money and quality. We also assess businesses based on their involvement in community support programs or local social initiatives. All suppliers and contractors are provided with a copy of Xstrata’s Business Principles so they are aware of our core values. In 2007 approximately 25% of our expenditure on goods and services was through local suppliers in North Queensland. A new tool was developed in late-2007 to more accurately monitor and report on our local supplier expenditure, therefore, we anticipate that this percentage will significantly increase in 2008.

Local employmentWe are committed to employing local residents from the communities in which we operate. The significant majority of Xstrata Copper’s North Queensland Division workforce is employed on a permanent basis.

However, the current boom in the resources sector coupled with the national skills shortage has meant a small proportion of employees were recruited from outside Australia in 2007. Approximately 1% of our employees are foreign nationals who do not have permanent residence in Australia.

Infrastructure for public benefitXstrata Copper’s North Queensland Division invested in social infrastructure in 2007 to provide a public benefit for the residents in the communities in which we operate. Where possible, we leveraged our investment through matched support from local, state and federal governments.

In 2007 a number of social infrastructure projects were completed in Mount Isa, Townsville and Cloncurry as part of the Xstrata Community Partnership Program North Queensland. Further details can be found in our site sustainability reports.

In December 2007, Xstrata Copper announced its commitment to provide $1 million towards funding The Cancer Council Queensland’s $6.5 million Townsville Hospice and Palliative Care Centre. This facility will allow residents of North Queensland suffering from terminal illnesses to spend their final days with their loved ones in a supportive home-like environment, with respect and dignity, while they receive additional medical care and pain management.

In partnership with the Mount Isa City Council and the state and federal governments, Xstrata also helped establish a world-class major venue for staging rodeos and exhibitions in Mount Isa, the rodeo capital of Australia.

Meeting our objective Xstrata Copper’s North Queensland Division contributes to the Queensland economy through:

Employment of 3,322 people, ■

including 2,602 employees and 720 contractors in North Queensland;

an annual wages bill in excess ■

of $383 million;

apprenticeship and youth ■

training opportunities of almost $9 million;

$772 million spent purchasing ■

goods and services within Queensland, with almost 25% spent on local suppliers in North Queensland;

$3.3 million paid in annual rates ■

to local councils;

annual corporate social ■

involvement contributions of more than $1.5 million directed to community partnerships, sponsorships, donations and community programs;

$211 million in rail, power and ■

water charges; and

$52 million paid to governments ■

in taxes and charges.

62% Xstrata Mount Isa Mines (2,046)

12% Ernest Henry Mining (388)

5% Townsville operations (168)

Employment break down

Employees

13% Xstrata Mount Isa Mines (445)

6.5% Ernest Henry Mining (225)

1.5% Townsville operations (50)

Contractors

Townsville Port operations


Safety 2007 Target Performance 2008 Target

Xstrata Copper North Queensland Division

Zero fatalities (0) Zero fatalities

LTIFR < 1 (0.95) < 0.5

DIFR < 4 (6.8) < 12

TRIFR < 13 (16.4) < 15

DISR < 150 (112.6) < 133

Mount Isa copper operations


LTIFR < 1 (0.6) < 0.5

DIFR < 4 (7.5) < 3.5

TRIFR < 13 (19.5) < 12

DISR < 100 (62) < 50

100% of identified catastrophic hazards with risk management plans developed

> 90% of high risk safety tasks/actions completed

> 75% compliance to mandatory training

Ernest Henry Mining


TRIFR < 12 (9.3) TRIFR < 9

Achieve self sufficiency in Positive Attitude Safety System (PASS)

10% minimum number of PASS champions per department

Complete orientation and induction process upgrade

Align emergency response systems with Xstrata NQ Emergency Management Framework

LTIFR < 0

DIFR < 2

Risk management training S1, S2, S3 100% leadership team


CRL* Zero fatalities (0) Zero fatalities

TRIFR < 15 (8.76) < 6

DIFR < 10 (5.84) < 3

Develop HAZOP study for tankhouse circulation

action to be incorporated into BowTie schedule

Complete workplace observations roll out training completed and observations commenced

Complete bow-tie risk assessments for top ten risks

7 bow-tie assessments completed; Action ongoing

3 bow-tie assessments to be completed in 2008

Implement gap audit findings to further align with AS4801

significant achievements in setting of objectives and targets

> 85% safety training compliance


Targets and scorecard

Achieved Not achieved Action continues into 2008


Environment 2007 Target Performance 2008 Target


Revise Greenhouse agreement to include the Xstrata Power Station

Amend Greenhouse agreement to include the Xstrata Power Station


Complete community health and perceptions study

survey of 500 community members completed in November 2007

Land, air and water components of the Whole of Emissions Study to commence as a PhD project

Complete external EMS audit to demonstrate compliance with ISO14001

audit conducted during December 2007

Establish budget forecasts and KPIs for carbon intensity and carbon footprint

Implement Lawlex Compliance Management System into operations

alternative compliance system implemented

Review and refine National Pollutant Inventory data collection processes and estimation techniques

estimation techniques reviewed and a Reporting Procedure developed

Remove disused copper concentrator crusher building

demolition work completed safely

Establish Xstrata Smelter Emissions Project Team

project Manager recruited. Baseline studies commenced

Xstrata Smelter Emissions Project Team to complete baseline studies

Progress towards 95% capture of sulphur dioxide in the copper smelter*

installation of converter hoods complete.

Complete ‘whole of emissions’ study to differentiate between natural forms of lead and those derived from smelting operations in the environment, and assess potential health risk

overview summary of Emissions to Land presented to key stakeholders.

Continue ‘whole of emissions’ study during 2008

Establish field trials for final capping of waste rock dumps

final modelling report received and instrumentation purchased.

Install field trials for final capping of waste rock dumps

Develop an Environmental Awareness Handbook

Develop an Environmental Awareness Handbook



* This target now migrates into the Xstrata Smelter Emissions Project. Please refer to page 33 for further information.

* New targets introduced for Xstrata Copper in 2008

Health* 2007 Target Performance 2008 Target


> 90% compliance to pre-employment health assessments

> 70% compliance to periodic health assessments

> 70% of occupational hygiene hazards and controls will be audited


> 90% compliance to internal blood lead testing

No lead in blood removals over the national limit of 50 micrograms per decilitre

CRL* Complete implementation of periodic health assessments

> 95% of employees assessed

Townsville Port

Complete implementation of periodic health assessments

100% of employees assessed

Safety 2007 Target Performance 2008 Target

Townsville Port


TRIFR < 8 (0) Zero

DIFR < 2 (0) Zero

Compliance with safety training > 90% (66%) Due to staff turnover > 85%

Implement the actions from the 2006 HSEC audit

various actions have been completed including changes to resourcing and planning procedures and the development of a closure plan



Environment 2007 Target Performance 2008 Target

Ernest Henry Mining

Continue tailings dam trial until completion tailing field trial established

Maintain tailing underflow densities at 65% solids

(65%) Maintain tailing underflow densities at 65% solids

Raw water consumption < 520 litres per tonne of ore treated

(436 l/t) Raw water consumption < 430 litres per tonne of ore treated

Re-use > 85% of pit and bore water (64%) Re-use > 75% of pit and bore water

Rehabilitate 60 hectares on south waste rock dump

(79.6 ha) Rehabilitate 32 hectares on the north waste rock dump

Maintain or improve EPA Category 2 performance rating

Review groundwater drawdown model model complete

Raise the northern and southern tailings dam to provide additional 20 million tones of capacity

completed

Establish budget forecast and KPI for carbon intensity and carbon footprint

CRL* Further develop site completion plan plan is now fully costed and established for annual review

Implement gap audit findings to further align with ISO14001

aspects and impacts registers now in place

Develop biodiversity management plan including pest management plan

completed the biodiversity standard and pest management plan

Zero level 3 incidents (0)

Zero Category 2 and 3 environmental incidents

Zero non-compliances with license conditions

Zero regulatory actions or fines

Townsville Port

Refurbish surface of eastern rail area and construct stormwater sump

completed refinement of the engineering design and costed project

Investigate automation of the stormwater treatment system

trial treatment completed

Zero Category 2 and 3 environmental incidents

Zero non-compliances with license conditions

Zero regulatory actions or fines


Social Responsibility 2007 Target Performance 2008 Target


Publish site sustainability reports

Continue to expand the benefits of the Xstrata Community Partnership Program North Queensland

Build on 2006 success with additional initiatives and ongoing transparency of sponsorships and donations

Conduct follow-up Community Attitude Surveys in Cloncurry, Mount Isa and Townsville

Assess effectiveness of completed XCPP NQ partnerships

commenced in December Complete the effectiveness assessment of the 2005 to 2007 XCPP NQ partnerships

Launch new 2008 to 2010 XCPP NQ partnerships

Establish a Management Committee (MC) and External Advisory Committee (EAC) to oversee the XCPP NQ

Conduct follow-up culture surveys of Xstrata Copper employees


Social Responsibility 2007 Target Performance 2008 Target


Complete Community Attitude Survey in Mount Isa

311 residents surveyed in mid 2007

Expand the scholarship and bursary program

28 university scholarships and 14 high school bursaries awarded

Award 30 university scholarships and 16 high school bursaries

Expand the apprentice intake to 74 74 apprentices commenced in 2007 Maintain apprentice intake to 75 offers

Develop an Indigenous Affairs Strategy in progress Complete development of the Indigenous Affairs Strategy

Develop cultural awareness training course for Xstrata Mount Isa Mines employees

in progress Deploy cultural awareness training across site

Continue to develop systems to encourage Indigenous trainees into apprenticeships

systems developed

Ernest Henry Mining

Publish site sustainability report

Build on 2006 success with additional initiatives and ongoing transparency of donations

Continue to champion all Ernest Henry mine employees as advocates of community relations

Improve our communities by listening, learning and facilitating with relevant community stakeholders where appropriate

Complete Community Attitude Survey in Cloncurry

287 residents surveyed in June

Deliver Indigenous training opportunities Expand Indigenous training opportunities

Establish entry level traineeships for school students

(2)

Launch the “First Cut” of the underground decline

Hold annual Community Information Session, Open Day, and Neighbours Day

Continue to promote tourism in Cloncurry by offering tours of EHM operations

Townsville operations

Publish Townsville sustainability report

Complete Community Attitude Survey in Townsville

311 residents surveyed in June

Continue to expand the benefits of the Xstrata Community Partnership Program in North Queensland

Build on 2006 success with additional initiatives and ongoing transparency of sponsorships and donations

Conduct a Community Information Session in Townsville



Caring for our peopleThe health and safety of our employees is critical to the business success of

Xstrata Copper North Queensland. We believe that all work-related incidents,

illnesses and injuries are preventable.

Xstrata Copper uses a risk-management system to identify, assess and eliminate or control safety risk. When an unsafe condition is identified or when a safety incident occurs it is investigated immediately and action is taken to eliminate the risks involved. Safety auditing occurs regularly across our business to improve safety standards and practices and our safety performance, safety initiatives and issues are regularly communicated to all of our people.

Health and safetyImproving risk management strategies and systems by identifying risks and foreseeable emergencies and implementing effective controls has been a key challenge for 2007. Our approach is designed to ensure that risks, in all aspects of our North Queensland copper operations, through all life cycles of mining, are identified, risk assessed, eliminated or controlled and monitored.

This is achieved through the application of a consultative risk management system, compliant with AS-4360 Risk Management, and supported by tools that foster the consideration of risk at task, process, and business levels.

Risk assessments are typically completed by teams, represented by a range of workers and subject matter experts. The risk assessments form the basis of training documents which are routinely used to deliver competency based training for our workers. Job Safety Analysis (JSA) and other on the job risk assessments are used to reinforce the safe work procedures.

In addition, we use a number of behavioural based tools which audit compliance to risk assessments, procedures and training, thus providing an avenue for feedback, observation, action and immediate correction of at risk behaviours. For example, the Workplace Observation Program (WOP) and Positive Attitude Safety System (PASS) are used extensively throughout our North Queensland copper operations.

As outlined in Xstrata Copper’s Safety and Health Policy, we strive to create and sustain injury-free, safe work environments for everybody in our workplaces. Zero harm is our goal. To achieve this we make our management accountable for safety performance, train our employees to improve their safety knowledge and skills make them aware that they have a responsibility to themselves, their family and friends to work and behave safely.

We also ensure that every task undertaken in our workplace has a safe system of work identified and our people have tools and equipment that are fit for purpose and well maintained to complete tasks safely and productively. Furthermore, our regular health-screening programs monitor our employees’ health, well-being and fitness for work.



With the introduction of many new workers to our operations with little or no industry experience, our focus on training programs and initiatives increased in 2007.

In support of emergency preparedness and training initiatives we successfully implemented the Metalliferous Certificate III in Mine Emergency Rescue and Response for our Mines Rescue Squads in Mount Isa and Cloncurry. This innovation was a finalist at the 2007 Mining Industry Skills Centre Training Awards.

Our Occupational Health and Safety Management System (OHSMS) continued to be subjected to internal and external audits in 2007. Audit results identified many good practices in the OHSMS across Xstrata Copper’s North Queensland Division, and positive improvement opportunities to be implemented and shared with the entire business.

In 2007 two HSEC Audits, conducted on behalf of Xstrata plc in May, were carried out on our Mount Isa Copper Operations (MICO), comprising the mining operations and the copper concentrator, and our Townsville copper refinery. A collective score of 85% was achieved by MICO which represented a 23% improvement on their 2005 audit score. The Townsville copper refinery achieved a collective score of 74% which represented a 3% improvement on their 2005 score. Our Ernest Henry Mining operations’ HSEC performance will be audited in 2008.

Performing SafelyWe value the health and safety of our people.

Safety performance is tracked using the following measures:

total recordable injury frequency ■

rate (TRIFR);

lost time injury frequency rate ■

(LTIFR); and

disabling injury frequency rate ■

(DIFR), which record the number of injuries per million hours worked.

TRIFR includes all injuries except first aid treatments. In 2007 we also included the disabling injury severity rate (DISR), which records the number of days lost or on restricted duties per million hours worked.

Xstrata Copper’s North Queensland Division achieved improvements in safety performance in 2007, achieving three of its safety targets. The copper operations achieved zero fatalities, a 37% improvement in LTIFR, and a 48% improvement in DISR.

The Mount Isa copper operations achieved improvement in safety performance in 2007. The operations achieved the LTIFR target with a 25% improvement and achieved 2.6 million hours lost time injury free. They were also successful in achieving their DISR target due to reduced injury severity and proactive injury management strategies.

However, while the Mount Isa copper operations have been making improvements in their DIFR and TRIFR, they did not reach their 2007 targets. Overall, since 2003 significant improvements against all these measures have been achieved.

Our Ernest Henry Mining’s operations achieved improvement in safety performance in 2007. They exceeded their TRIFR target

Right: Townsville copper refinery employees – Industrial Tradesperson Graham McAdam,

Safety Officer Ian de Satge, and Refinery Supervisor Les Brand

Opposite page: Tamara Oakley, Ernest Henry Mining Dispatcher, keeps in regular radio

contact with all mining personnel

Caring for our people

“The copper operations achieved zero fatalities, a 37% improvement in LTIFR, and a 48% improvement in DISR.”

of 12 by recording a rate of 9.3. This was an improvement on the rate of 11.1 achieved in 2006.

In 2007, the Townsville copper refinery achieved its TRIFR target of 15, recording a result of 8.76. The copper refinery also achieved its DIFR target of 10, recording a result of 5.84. There were two LTIs recorded for the year – both soft tissue back injuries. The port operation achieved both its DIFR and TRIFR targets recording zero for both measures.

9

10

6

12

7

11

9

13

8

13

10

13

TRIFR 12 month moving average

Total recordable injury performance copper operations

number per million hours worked

30

20

25

15

10

5

Employees Contractors

0Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Xstrata North Queensland Copper Operations achieved improvements in safety performance in 2007, achieving their LTIFR and DISR targets. Significant effort was spent on reducing the severity of our injuries in Mount Isa, which has been reflected in achieving these targets.


Our North Queensland Division also analysed the causal factors of lost time, restricted work and medical treatment injuries in 2007. Contusions and lacerations to hands and fingers and musculoskeletal injuries represented the majority of these injuries. A number of initiatives have been identified to address these in 2008, including the implementation of the Over-a-period-of-time Study recommendations, increased workplace observations, and improved incident investigation quality with more focus on the identification of contributing factors and corresponding actions to prevent recurrence.

Crisis and emergency preparationTo ensure Xstrata Copper’s North Queensland Division is prepared to respond to a range of operational challenges, we tested the North Queensland Response and Recovery Manuals, developed in 2006, with a number of desktop and mock exercises in 2007. The training framework for our Mines Rescue Teams (MRTs), also developed in 2006, was successfully implemented in 2007 providing the team members with the opportunity to improve their skills and experience. Our MRTs also participated in the Queensland Mine Rescue Challenge in Townsville in 2007. As a result of this training our emergency management resources were improved.

Health assessment and managementBefore joining Xstrata Copper, all employees complete a comprehensive health assessment. These are taken at least every four years during employment, depending on the nature of the role undertaken, the age and general health of the employee, and the presence of pre-existing conditions. Health assessments are also undertaken when employees leave the business. In 2008 we will target a compliance rate of more than 70% of employees completing their periodic health assessments.

Occupational healthWe value the health and wellbeing of our employees and we encourage them and their families to maintain a healthy lifestyle. Our health promotion campaigns were conducted across the Xstrata Copper North Queensland Division, they included programs on topics such as obesity, smoking, alcohol abuse, fatigue, nutrition, sleep apnoea, mental health and shift work.

Monitoring programsExposure to occupational hygiene hazards is a key occupational safety and heath challenge for our Division and in 2007 we continued our comprehensive reviews of monitoring programs for dust, noise, asbestos fibre, arsenic in urine, radiation, lead, hazardous substances and potable water.


Xstrata Copper’s North Queensland Division invested more than $400,000 on occupational hygiene sampling and analysis in 2007. No new cases of occupational diseases were recorded at our North Queensland operations in 2007.

Managing leadElevated lead levels in blood is a matter Xstrata Copper’s North Queensland Division takes seriously. This is evident in the strict protocols in place to reduce employees’ exposure to lead in the workplace. Biological and workplace monitoring is conducted in accordance with the National Occupational Health and Safety Commission (NOHSC) standard and recognised international occupational hygiene monitoring standards.

All employees from Xstrata Copper’s Mount Isa and Townsville port operations are required to have venous lead in blood tests at frequencies which are determined by the area they work in, their previous result, gender and reproductive capacity. This form of biological sampling provides an accurate measure of a worker’s exposure to lead. In 2007 there were no instances of Xstrata Copper employees exceeding the national medical removal limit.

We set our medical removal limit below the NOHSC standard of 50 micrograms per decilitre (μg/dL). Employees with blood-lead concentration levels of 40 μg/dL or greater must be removed from the workplace until concentrations are below 30 μg/dL. Pregnant employees should not have a blood lead concentration that exceeds the national standard of 10 μg/dL.

Fiona Rogan, Injury Management Coordinator at Mount Isa Mines, demonstrates on-line consultation using the tele-health system with Mount Isa Physiotherapist David Rose, and consultant Mark Cassidy (pictured on monitor)

“We value the health and wellbeing of our employees and we encourage them and their families to maintain a healthy lifestyle.”



MNM30605 Certificate III in Mine Emergency Response and Rescue

Mines Rescue team members Roy Pattison, Damien Mizow, Alex Hossack and Tyronne Campbell plan a rescue during one of several search and rescue training exercises carried out on the Mount Isa Mines lease throughout the year

Xstrata Mount Isa Mines’ Mines Rescue function forms part of

Xstrata Copper’s Safety and Health Department, providing a vast

range of rescue services for Mount Isa Mines and other local mining

operations through consultation arrangements.

During 2007, Mount Isa Mines, together with the Queensland Mining Industry and Training Advisory Board (QMITAB), successfully developed and implemented the MNM30605 Certificate III in Mine Emergency Response and Rescue.

Xstrata Mount Isa Mines was initially contacted by QMITAB to assist in recommending some of the minimum competency requirements that a rescue member may need to have. We then engaged the help of local Registered Training Organisation, Krause Health and Safety, to establish a third party agreement in order to develop our internal training and assessment resources and deliver a Certificate III Statement of Attainment through minimum established criteria.

Six core modules were developed for the certificate as well as other internal competencies. These included induction supervisory and senior first aid as well as 10 elective modules that best suited the needs of Mount Isa Mines’ large and complex environment involving mining, milling and smelting operations. The outcome was the first ‘Certificate III in Mine Emergency

Response and Rescue’ for a metalliferous mine in Queensland which was offered to the 2007 Mines Rescue rookies.

“To be the first mine to be able to issue the nationally recognised qualification in Mine Emergency Response and Rescue in Queensland is a credit to the hard work and quality training program developed by the Mount Isa Mines Rescue Squad supervisors,” said Mr Darren Bracey, Xstrata Copper’s Emergency and Protective Services Superintendent.

This safety initiative forms part of Xstrata’s North Queensland Operations ‘Safety and Health Management System’. It also promotes many of the underpinning values of our Safety and Health Policy and system requirements.

Not only does it exceed the legal obligations for responding and controlling emergencies on the Mount Isa lease, it provides continual professional and personal development opportunities for the members of the Mines Rescue Squad. The training ensures our Mines Rescue Teams are equipped to respond in a controlled and structured manner.

case study

Lead in the Mount Isa communityWe also continued our free venipuncture program to take blood samples from Mount Isa residents to test for lead levels in blood. The test is available on request from the Queensland Medical Laboratories located in the town centre and funded by Xstrata. The results of blood-lead tests are confidential and forwarded to a general practitioner nominated by the community member being tested.

In December 2007, Queensland Health completed its 15 month study of the lead in blood levels of 403 Mount Isa children, aged between one and four years, representing one quarter of the children of this age group in the local community. Mount Isa Mines actively worked with Queensland Health to encourage our employees and Mount Isa residents to have their children tested for the Get Bled for Lead screening program.

Also in December, Xstrata Copper’s Chief Operating Officer was elected by the Xstrata Lead Committee to represent Xstrata Mount Isa Mines on the Executive Committee of a new key community leaders’ Alliance. The inaugural meeting of the Living with Lead Alliance took place in March 2008.

The Living with Lead Alliance is responsible for developing future initiatives to sustainably manage lead levels in Mount Isa. Regular meetings will be held over the coming years and regular updates will be provided to the community regarding the Alliance’s initiatives.

Through this Alliance, Xstrata Mount Isa Mines and the Xstrata Lead Committee continue to work with Queensland Health, the Environmental Protection Agency, Mount Isa City Council, and the State Member for Mount Isa to ensure the continued good health and wellbeing of the local community.

Queensland Health is scheduled to publicly release their Get Bled for Lead screening program results in May 2008.

More information about our lead management initiatives can be found in the case study on page 43.


Copper innovationsOur site-based Innovation Awards continued in 2007, resulting in a range of practical solutions to safety, health and operational issues across our north Queensland operations. Some of the 2007 recipients included:

Fuel shut-off device (Mount Isa): please ■

refer to the case study on page 21;

Laser receiver (Ernest Henry Mining): ■

please refer to the case study on page 22; and

Secondary mould pin lifter (Townsville ■

copper refinery): please refer to the case study on page 22.

During the copper anode casting process, anodes are pushed up to remove them from the casting moulds. This lift is conducted by the primary pin mould, however, sometimes this process fails to lift the anode. The anode casting team identified that the old procedure had the potential to put an operator at risk when the wedge was being placed. The risk was that the anode could potentially fall during this process.

The risk was removed with the installation of two 2.5 tonne capacity (Selson) air jacks located on the floor under the anode casting wheel. The jacks are remotely controlled which eliminates the requirement for the operator to physically place the wedge.

The forklift is now only required to lift and remove the anode from the mould. The time and labour required to remove suspect anodes from the casting wheel has been significantly reduced.

MIG welder boom (Mount Isa):

Boilermaker Gavin Greet of Xstrata Copper’s Shaft refurbishment team developed a new safety innovation which changed the way he and his workmates perform tasks associated with MIG welders in the X41 workshop. This in turn has greatly improved the health and safety of his crew, reduced costs, and improved the Shaft Refurbishment team’s production.

In the past, significant damage has been sustained to the MIG traveller, torch leads, hoses, hand pieces and euro connectors as a result of being moved and dragged around the X41 workshop while carrying out fabrication work. The welding leads also created a potential and unnecessary trip hazard for employees in the workplace as well as became exposed to potential damage when the forklift was operating in the area.

After detailed discussions and completion of a risk assessment, Gavin and his team decided that the idea of an elevated carrier boom would be worth pursuing. The approval was given for the design and fabrication of the booms for the MIG travellers.

Called the MIG Welder Carrier Boom, the booms eliminate the need to lift and drag the MIG travellers over leads and around the workshop floor. The booms also keep the leads and hoses off the floor. This improves productivity and efficiency when fabricating larger items such as screens due to the time saved in moving the MIG equipment around.

Sustainable lubricating improvements (Ernest Henry Mining):

Increasing oil use and the loss of production due to lubrication-related machinery failures and spills prompted the copper concentrator team to install a system that could recycle, test and re-use oil. It uses an Alfa Laval oil centrifugal filter in conjunction with a Kidney Loop filtration system.

Oil needed in the concentrator at Ernest Henry Mining is now stored in purpose-built 5,000 litre tanks. This reduces the risk of spills and reduces manual handling, further reducing the risk of injuries to employees.

Since the project was implemented, lubricant and sealant consumption in the concentrator has decreased by 18%. In 2007 the cost saving for this alone was approximately $40,000. Gearbox life expectancy has tripled to almost six years which provides an estimated saving of up to $400,000 per year. The overall cost savings for the sustainable lubricating improvements innovation was approximately $6.5 million in 2007.


Pathology Collector, Carmen Robinson, collected blood samples from children at Yallambee Reserve as part of the Get Bled for Lead screening program run by Queensland Health

“Mount Isa Mines actively worked with Queensland Health to encourage our employees and Mount Isa residents to have their children tested for the Get Bled for Lead screening program.”


W44 bulk air cooler bypass system (Mount Isa):

Greg Ernst, Ian Coles, Firth Haigh, Brian Lowe and Paul Olsen in the Fans and Refrigeration Department came up with and built the innovation which:

reduces power consumption; ■

reduces the amount of chilled water ■

used, and

saves around $300,000 per year ■

in operating costs.

The existing system was inefficient, losing too much heat energy in two kilometres of pipe to the water chiller, and was not efficiently using the cooling power of the plant. The team recognised the problem and then planned out a solution to improve the way the system works.

The improved system has a by-pass for the chilled water, so it recirculates through the bulk air cooler during less humid periods of time. This effectively lowers the overall losses of energy in the system while still maintaining the same chilled fresh air conditions at the W44 shaft for 19B. This innovative solution saves money and reduces the energy consumed and wasted resulting in improved energy efficiencies and reduced greenhouse gas emissions.

Phone handpiece retaining bracket (Mount Isa):

Trevor Horsnell, a Radio Technician in the Maintenance Department, developed a new safety innovation that involved the manufacture of a special bracket to hold phones ‘on the hook’ in the underground copper mines.

The use of the bracket has reduced the amount of time spent and resources allocated to investigating false telephone alarms that result from the phone being dislodged during blasting or heavy vibrations. This innovation has also resulted in increasing the availability of the phone service underground.

The fuel shut-off device isolates the equipment being refuelled to eliminate damage to refuelling equipment and decrease fire hazards

Previously, fuelling nozzles were not always disengaged from refuelling equipment before equipment was driven away. This potentially caused damage to the fuelling equipment, losses in production because the fuelling facility experienced downtimes, and also created a fire hazard due to fuel spillage.

After careful thought and planning, Bill Dunn, Auto-Electrician at the Mount Isa Copper Operation Rebuild Workshop, and Dave Anderson, Rebuild Workshop Superintendent, developed a way to install a limit switch that is wired to the emergency stop circuit or fire suppressant system and is activated when the fuelling nozzle is connected to the fuel tank.

This device shuts down fuel pumping, cuts all power to the engine and isolates the unit. The equipment cannot be started until the fuelling nozzle is disconnected.

It is simple but effective and requires minimal maintenance because the switch is robust and fully sealed. Importantly, the system is fail-safe because it is wired to the emergency stop or fire suppressant systems. If this circuit is broken or opened, the unit will instantly shutdown.

The key benefit of this innovative system is that it has the ability to be built into the equipment at a low cost and does not compromise the unit’s wiring. It is also an engineering control solution which has taken away the potential for human error and can be used on Xstrata Copper’s mine sites in numerous situations.

Fuel shut-off devicecase study

The potential risks associated with not disengaging the fuel nozzle

correctly on mobile equipment have been substantially reduced

following the development of an innovation known as the ‘Fuel

Shut-off Device’.

“This device shuts down fuel pumping, cuts all power to the engine and isolates the unit. The equipment cannot be started until the fuelling nozzle is disconnected.”



Health and Safety Superintendent Malcolm Maddison said that following a rock fall incident in the pit in early 2007 the team decided it needed to develop a way to minimise the amount of time operators spent on foot in the pit. “In the past mining personnel have needed to be on foot, marking laser levels on rocks and the ground to maintain even-dig floor levels,” he said.

“We needed to find a way to eliminate their exposure to hazards at and around working faces and while operating machinery. What the team came up with were laser receivers mounted on the blade of bulldozers, which work with another laser mounted on a tripod up to 300 metres away to indicate the desired blade height to the operator.”

The laser readings showing the height of the blade are transmitted to a panel of lights inside the bulldozer cab. The class-one lasers are positioned on a receiver and mounted behind the dozer blade where they are protected by a steel guard. Now 66% of dozers in our open cut mining operation are mounted with laser receivers.

The initiative cost under $10,000 to develop and was awarded an EHM Innovation Award in June. Mine Services Superintendent, Phil Townsend, presented a paper on the innovation to 600 delegates at the Queensland Resources Council’s 2007 Safety Conference in Townsville. He discussed the events leading to the development of the initiative, and the benefits it has delivered to Ernest Henry Mining.

Laser receivercase study

A cost-effective innovation developed by Ernest Henry’s

mining production team is improving the safety of

operators working in the mine’s open pit.

The Laser receiver mounted on dozer blades, an EHM innovation to prevent mining personnel from working on foot to maintain floor levels

Secondary mould pin lifter

case study

During the copper anode casting process

anodes are pushed up to remove them

from the casting moulds. This lift is

conducted by the primary pin mould,

however, sometimes this process fails

to lift the anode.

If cast anodes were not pushed up by the primary pin mould lifter, the previous procedure was to position forklift tyres under the mould pin and raise the anode while another operator would pace a wedge under the anode to keep it elevated. The forklift tyres would then be lowered and then the forklift would remove the anode from the mould.

Our Townsville copper refinery identified that the old procedure had the potential to put an operator at risk when the wedge was being placed as the anode could potentially fall during this process. The risk was removed with the installation of two 2.5 tonne capacity (Selson) air jacks located on the floor under the anode casting wheel. The jacks are remotely controlled which eliminates the requirement for the operator to physically place the wedge.

The forklift is now only required to lift and remove the anode from the mould. The time and labour required to remove suspect anodes from the casting wheel has been significantly reduced.

The secondary pin lifter will remove the operator from working in close proximity to a forklift and eliminate the need for a second operator in the area


EmploymentThe commitment and capability of our employees is key to the ongoing success

and sustainability of Xstrata Copper’s North Queensland Division. Our Human

Resources Strategy, and accompanying initiatives, support this requirement

through the development of individual capabilities and organisational culture.

Ernest Henry Mining’s Employee Services Team look forward to the work day ahead

Employment baseIn the year ending December 2007, Xstrata Copper provided jobs for 2,602 employees and 720 contractors in North Queensland. Our rate of employee turnover in 2007 averaged 21% across the Division, which is well below the Queensland industry standard of 32%.

Developing cultureIn February 2007, Xstrata Copper undertook a cultural survey of its employees. Communications sessions were subsequently held with all employees across the North Queensland Division and a number of measures were undertaken to improve the constructive culture. These included identifying a preferred culture aligned with

the Xstrata vision, values and principles, conducting workshops with management teams and providing managers with formal development feedback followed by coaching.

Developing a strong constructive culture will help ensure employees are supported in working together to achieve the best for themselves, the business and the community. A strong constructive culture in the copper operations also encourages employees to realise their full potential and improve operational effectiveness. During mid-2008 another survey will be conducted across the Xstrata Copper North Queensland Division to evaluate the improvement in constructive culture and design further cultural interventions that provide greater alignment with Xstrata’s mission, principles, values and strategic objectives.

Employee training and educationTo ensure our employees have the appropriate levels of safety and health competency to perform their work activities and in line with our commitment to developing our people, Xstrata Copper North Queensland invested more than $13.6 million on training locally during 2007, an average of $5,061 per employee.

Xstrata Copper’s Training Coordinators work closely with line management and supervisory staff to identify training requirements and gaps in knowledge. In 2007, 100% of our employees completed an annual performance evaluation review where training opportunities were identified as part of their professional development.

Our award-winning training systems continued to focus on delivering competency based training for all workers. Training requirements identified during career planning, and leadership and professional development, also formed part of the process.


Employee Training and education

Xstrata Copper North Queensland DivisionSenior

Management Workforce

Average hours per employee per year 45 62

Average cost per employee $5,061 $5,061


First year mechanical fitting apprentice Kristian Gearing turns a small stepped pin during his practical lathe exam at the Xstrata Skills Centre

Building LeadershipThe 2007 Xstrata Leadership Development Program (LDP) attracted more than 295 participants from Xstrata North Queensland Division. The LDP aims to articulate the role of a leader within the business and provide participants with the required skills. The program focuses on the real needs of our business and its leaders. Modules include leadership, coaching for performance, planning, and communication.

The 2007 Xstrata Senior Management Leadership Development Program (SMLDP) was attended by eight Senior Managers from the North Queensland Division. The SMLD program aims to create a shared understanding and alignment of Xstrata Copper’s values, culture and integrated strategy, and the role of the Senior Manager within Xstrata Copper.

It also reinforces and develops the capabilities required to achieve our strategic objectives in a manner consistent with our principles. Since 2006, we have progressed 37 employees from North Queensland through the SMLDP as either participants or mentors.

Xstrata Apprenticeship ProgramXstrata currently runs the largest apprenticeship program in North Queensland with over 275 apprentices, of whom 74 are employed at Xstrata Mount Isa Mines. The Xstrata Apprentice Program is designed to enhance our maintenance programs and strategies. In 2007, Xstrata Copper’s North Queensland Division contributed $4.3 million to the total $5.72 million investment in apprenticeships.

In 2007, 74 apprentices plus 24 school-based apprentices were recruited into the Xstrata business. In 2008, this will be increased to 75 apprenticeships and 30 school-based apprenticeships. In addition to new apprentices, we offer our existing employees, who were interested in moving into a trade field, the opportunity to undertake an apprenticeship.

All apprentices receive individual and group training from 11 training professionals based at the Xstrata Skills Centre, a $3.5 million state-of-the-art training facility located in Mount Isa. The program is focused on providing real employment and skills opportunities for people living in the region and currently targets eight key trades.

The Xstrata Skills Centre received a $190,250 incentive from the Australian Government in 2007 for the ongoing implementation of Xstrata Mount Isa Mines’ apprenticeship schemes.

Developing vocational skillsXstrata Copper’s North Queensland Division works closely with key stakeholders in the community to provide real and meaningful vocational career pathways for individuals, in careers that reflect the needs of our business.

The Xstrata Vocational Skills Development Program aligns a number of key initiatives, including, introducing students to opportunities and careers within the mining sector and providing on-the-job training. These programs are targeted at secondary schools within North Queensland.

Initiatives include structured work experience and readiness programs, traineeships, lead involvement in the Queensland Academy of Minerals and Energy (QMEA), information programs and school-based apprenticeships.

In 2007 we jointly awarded 14 bursaries worth $1,000 each to high performing secondary school students in Mount Isa to assist with their education. In 2008 Xstrata Copper will also aim to award bursaries to students in Cloncurry and Townsville.

Developing professional skillsXstrata employed 60 permanent graduates in 2007, based on demand within its combined copper and zinc-lead operations in Mount Isa. The Xstrata Graduate Program provides employment and structured development opportunities for recent graduates and assists us to develop technical and leadership capability.

We also jointly employed more than 60 university students in our Vacation Work Experience Program, based on demand. Students worked across the operations and undertook assigned projects.

Diversity

Xstrata Copper North Queensland Division Ratio of women Ratio of men

Senior Management 11% 89%

Workforce 13% 87%


Mining Superintendent, Steve Rooney, discussing the weekly plan and targets with Engineer, Ben Oliver, and the Mine Technical Services Team



Chilean partnership program

case study

Xstrata Copper’s partnership with the Chilean Federation of Technical

Education Institutions delivered a very successful inaugural teacher

exchange program in 2007

The objectives of the program for the Chilean teachers included developing an operational understanding of the Australian vocational education system, experiencing the lifestyle within the Australian mining community, and becoming familiar with Xstrata Copper’s HSEC systems.

Importantly, the program is also structured to broaden career pathways within Xstrata Copper by providing identified copper employees with an opportunity to increase their language skills by learning Spanish.

In 2007, the inaugural year of the program, the Xstrata Copper’s Mount Isa operations had the pleasure of hosting two vocational education teachers. Ms Sara Munoz and Mrs Lilia Espinoza spent three months each teaching over 40 employees and their partners in structured classes ranging from basic to advanced. In addition, two employees from South America capitalised on having Chilean teachers living in Mount Isa and were able to undertake refresher English lessons.

The highlight of the 2007 program was the formation of a Spanish Club which met on a regular basis. All students were actively encouraged to use their Spanish in this social forum while they learned more about Chilean culture. The program will continue in 2008 with two new teachers arriving in Mount Isa to continue the work of Sara and Lilia.

Chilean exchange teacher Sara Munoz provided Spanish lessons to Xstrata Copper employees

The program provides excellent salaries as well as assistance with accommodation and transportation.

In 2007, we jointly awarded 28 scholarships worth $8,000 each to university students to assist them with their education. In 2008 Xstrata North Queensland will award scholarships to 30 students with a contribution of $720,000 over three years.

Diversity and opportunityXstrata seeks to employ a diverse workforce, to benefit from a varied range of skills, backgrounds and perspectives. We employ people based on the skills and experience required for each particular position, without discrimination according to gender, race, age, sexual orientation, religion, nationality or any other factor.

Labour relationsWithin Xstrata Copper there are examples of various workplace relations models, including individual agreements and collective bargaining agreements, reflecting the circumstances of any given site and Xstrata Copper’s devolved management structure. Labour relations are a fundamental responsibility of operational management and we seek to have a direct relationship between our employees and line management founded on quality leadership, effective communication, mutual respect and trust.

In 2007, the types of agreements in place at Xstrata Copper’s North Queensland Division included:

60% of our Mount Isa employees were ■

covered by collective agreements and 40% were covered by common law contracts

almost 70% of our EHM employees ■

were covered by Australian Workplace Agreements (AWAs) and just over 30% were on common law contracts; and

3% of our copper refinery employees ■

were covered by collective bargaining agreements while 97% were covered by either AWAs or common law contracts.

We consult with employees in advance of any significant operational change. Minimum notice periods vary across our operations and are generally specified in collective agreements.

Our Townsville and Mount Isa HSEC Committees were comprised of 50% employees and 50% management, which included line supervisors, supervisors and managers. At Ernest Henry Mining the HSEC Committees were comprised of 60% employees and 40% management.

“Sara Munoz spent three months teaching over 40 employees and their partners in structured classes ranging from basic to advanced.”

Caring for our environmentOur goal is to become world leaders in environmental performance ensuring increased

efficiency, lower risk, and higher overall environmental performance at our North Queensland

operations. Achieving this will ensure we continue to maintain our social licence to operate.

In line with Xstrata Copper’s Environment Policy, we are committed to achieving the highest standards of environmental performance. The Environmental Management Systems in place at each of our sites and operations are aligned with Xstrata’s Business Principles and Management Standards. We routinely assess our performance against these systems and standards.

Xstrata Copper strives for industry leadership in environmental performance and our operations and projects are required to meet and, where practicable, exceed relevant laws, regulations and standards. They must also manage environmental risks, work with local stakeholders, and set targets for continuous improvement and report the results.

In all parts of our business we limit our environmental impacts by the efficient use of natural resources, by limiting or preventing pollution and by reducing waste. We manage biodiversity-related risks and seek to avoid, minimise or mitigate any negative affects on biodiversity caused by our operations.

When environmental incidents do occur we determine the cause and take steps to prevent recurrence. Xstrata Copper also plans, operates and closes operations in a way that enhances sustainable development.

Xstrata Copper North Queensland’s key environmental challenges are to:

manage issues associated with lead in ■

the environment in conjunction with Queensland Environmental Protection Agency, Queensland Health, Mount Isa City Council, state member of parliament, and the Mount Isa community;

minimise emissions to air from Mount ■

Isa smelters and dust from surface operations;

integrate energy conservation practices ■

within our operations to minimise our carbon intensity and carbon footprint;

minimise fresh water consumption and ■

maximise process water re-use;

plan for effective progressive ■

rehabilitation;

minimise waste generation and maximise ■

materials recycling;

manage impacts on the surrounding ■

environment in conjunction with continual growth; and

enhance the environmental culture ■

at each of our operations through the development of ‘environmental ambassadors’.

Environmental complianceNo fines or penalties were received by Xstrata Copper’s North Queensland Division in 2007. We have established environmental plans, management systems and procedures at all of our sites. Xstrata Copper reviews and improves ISO 14001 compliant environmental managements systems at each site using feedback from the Xstrata HSEC Assurance Program, specialist audits and other internal and external environmental benchmarking activities.

Full compliance was achieved at our Townsville copper refinery and port operation in 2007 for all Environmental Licence conditions.



In Mount Isa there was one non-compliance in relation to a breach of the sulphur dioxide (SO2) limit as defined by the Xstrata Mount Isa Mines Limited Agreement Act during 2007. This was mainly due to a combination of irregular weather at the time, and changed characteristics of the plant from improvements in emission control. A review of the predictive air numerical model and air quality control protocols has been planned for 2008.

In 2007 Ernest Henry Mining recorded three Category 3 (significant) environmental incidents. All of the incidents were reported to regulatory authorities immediately and involved concentrate spills from road trains transporting copper concentrate to our copper smelter in Mount Isa some 160 kilometres away. No injury to people or prosecution for environmental harm resulted from these incidents. Further information about these incidents can be found in the 2007 Ernest Henry Mining Sustainability Report on pages 16, 17 and 22.

Mount Isa Mines Limited Agreement ActIn September 2007 the administration of environmental aspects of the Mount Isa Mines Limited Agreement Act 1985, which forms the main basis for regulation for our operations was transferred by the Queensland Government from the DME to the EPA. Discussions between Xstrata Mount Isa Mines and regulatory authorities also commenced to map out a process to transition environmental regulation from the Mount Isa Mines Limited Agreement Act 1985 to contemporary legislation. This was in preparation for the Queensland Government’s anticipated announcement in 2008 that they will formally advance a change in environmental legislation away from special agreement acts.

Mount Isa Mines and the Government negotiated an agreed transition period for our operations to apply for a new environmental authority that will set out new environmental performance criteria for the remainder of our planned operations decades into the future. Mount Isa Mines support this regulatory change as it better supports our principles of sustainable development and environmental excellence. In July 2007 we established the Smelter Emissions Project team to assess opportunities to improve capture and treatment of sulphur dioxide emissions on site (see page 33).

MaterialsXstrata Copper is committed to the efficient use of input materials and actively seeks opportunities for reducing input consumption to reduce the impact on natural resources and operating costs.

A wide range of raw materials and other consumables are used by Xstrata Copper’s North Queensland Division. The materials usage table (right) shows the main materials consumed by our copper operations by weight or volume.

Practices of recycling major by-products from various steps in the smelting copper slag and copper reverts in the copper business continued. In the Mount Isa copper smelter, dusts captured using an electrostatic precipitator continued and was reprocessed to recover additional copper and then neutralized and fixated in underground voids in a benign form.

Energy and greenhouseIn 2006, Xstrata Queensland Pty Ltd (encompassing the Xstrata Copper North Queensland Division) joined the Greenhouse Challenge Plus, a partnership between industry and the Australian Government to manage and, where practicable, abate the production of greenhouse gases (GHG).

In 2007, we submitted our first progress report under this program for the 2006 calendar year. As a component of this report an updated emissions inventory was submitted and updates were provided relating to progress against action plans.

Right: Ernest Henry Mining Environmental Advisors conducting monitoring

and maintenance at the tailings storage facility capping trials

Opposite page: Environment Department staff Roux Meyer and Ryan Pascoe undertake soil

sampling along the Leichhardt River in Mount Isa

Caring for our environment

Xstrata Copper North Queensland material usage

Material 2007 usage

Cement (t) 78,072

Coke (t) 8,540

Crude oil (l) 14,434

Diesel (kl) 55,961.6

Explosives (t) 9,685.2

Gelatin (t) 14

Grinding media (t) 16,554.2

Lime (t) 12,874

Limestone (t) 3,845

LPG (non-transport) (kl) 286.5

Lubricating oils (kl) 2,300

Silica (t) 56,850

Sodium carbonate (t) 338.5

Sodium hydroxide (t) 27.3

Sulphuric Acid (t) 1,504

Thiourea (t) 19

Tyres: heavy vehicle (no.) 401

Tyres: light vehicle (no.) 2572

unleaded petrol (kl) 107.6

Wood (t) 1,790

Xanthate (t) 940.8


We also participated in the Energy Efficiency Opportunities (EEO) Program. The program encourages large energy users (> 0.5 Petajoules) to improve energy efficiency through identifying and implementing energy saving initiatives. Signatories are required to assess their operations for energy saving opportunities and implement initiatives if the pay back period for an initiative is less than four years.

Significant activities undertaken within this program included the submission of the Assessment and Reporting Schedule. Required by the end of 2007, the completion of this submission ensured that all major plant areas across our Division were included in a five-year plan of assessments for energy efficiency improvements and public reporting of actions.

Energy Breakthrough

Key energy and greenhouse gas efficiencies achievements made by our Energy Breakthrough team across Xstrata Copper’s North Queensland Division during 2007 included:

reducing carbon dioxide equivalents ■

(CO2e) by 1,357 tonnes in total through improvements to compressed air systems at Mount Isa (copper and zinc);

reducing CO ■ 2e by 300 tonnes by reinstating a Pelton Wheel Turbine Generator in the underground copper mine in Mount Isa;

reducing instantaneous electricity demand ■

through modifications to Xstrata Mount Isa Mines’ two largest hoists


(this initiative will be extended to all large hoists by mid-2008);

commencing an investigation into the ■

savings available by replacing standard electric motors in the operations with High Efficiency Motors (HEMs). This investigation is ongoing and is likely to see HEMs being installed in the operations from 2008;

installing 250 electricity meters within ■

operational areas which interface with the Itron Enterprise Edition (IEE) energy management system to allow real time electronic monitoring of energy consumption; and

developing reporting systems to allow ■

retrieval of consumables data for forecasting and reporting the carbon intensity and carbon footprint of our operations.

Xstrata power station

In February 2007, Xstrata Mount Isa Mines started construction of its $38 million, 30 megawatt gas fired power station (XPS). Commissioned in early November the XPS is one of the more energy-efficient, simple cycle, low emissions gas fired power stations operating in Australia.

The XPS will satisfy an increase in internal power demand and help increase the reliability of supply to Xstrata’s operations in the North West region for the next two to three years. The XPS achieved savings of approximately 2,830 tonnes of carbon dioxide equivalent (CO2e) in its first two months of operation.

Our Mount Isa copper operations and Ernest Henry Mining source 100% of their energy from the Mica Creek gas fired power station located in Mount Isa.

In 2007, Ernest Henry Mining reduced electrical energy consumption per tonne of contained metal from 2006 due to slightly higher metal grades in the ore. The lower consumption can also be attributed to the decommissioning of the 4100 rope shovel which was powered by electricity.

The Townsville copper refinery and port operation source 100% of their electricity from the local electricity supply network connected to the national electricity grid. In 2007 the copper refinery consumed 91,379 megawatts of electricity and 253,826 gigajoules of coal seam methane (natural gas) which is used for furnace and boilers.

The new $38 million gas fired, low emissions 30 megawatt Xstrata Power Station completed in Mount Isa

Contained metal Contained metal (linear)

The peak in CO2e intensity in 2006 is largely attributable to the re-brick of smelter furnaces, that is production levels were down without a corresponding reduction in energy consumption. This effect can also be seen in the energy and water intensity graphs. Measurement of Xstrata Copper North Queensland’s carbon footprint improved significantly during the reporting period. The reduction in CO2e intensity in 2007 was assisted by the commissioning of the Xstrata power station, an efficient gas fired plant at Mount Isa and by conversion of heating energy at the Copper Refinery from naptha to natural gas. Energy efficiency programs are being expanded across our North Queensland operations and all improvements made will positively impact the business’ carbon footprint.

0

CO2e intensity

tonnes CO2e per tonne contained metal

20062005 2007

6

3

4

5

2

1

The long term energy intensity trend for Xstrata Copper North Queensland is increasing however the underlying trend improved across the Division in 2007. At Mount Isa, reduced energy consumption for compressed air production was maintained in 2007 and was supported by savings associated with other energy efficiency programs. Such programs will remain a focus in 2008 and beyond. Reduced energy intensity at Ernest Henry Mine during the reporting period was associated with higher metal grades in mined ore and the decommissioning of the 4100 rope shovel which was powered by electricity. At the Copper Refinery electricity consumption rose but was offset by increased production levels resulting in an improved intensity in 2007.

0

Energy intensity

kWh per tonne contained metal

200520042003 2006 2007

7000

Contained metal Contained metal (linear)

3000

5000

4000

6000

2000

1000


Water managementEffective water management and conservation is critical to the long-term viability of Xstrata Copper’s North Queensland Division. Our operations have taken an integrated approach to water management.

Our key focus is to minimise freshwater usage and maximise process water usage at our operations. Alternative water sources to freshwater used at our operations include harvested stormwater, underground mine dewatering, water recycled internally within plant areas, waste water streams from neighbouring operations, return water from tailings thickeners and tailings decant water.


Freshwater use

In 2007 our Mount Isa copper operations consumed 8,023 megalitres of freshwater sourced from Lake Moondarra and Lake Julius. Ernest Henry Mining consumed 4,796 megalitres sourced from Lake Julius. This represented 73.8% of their 6,500 megalitre allocation in 2007.

Our Townsville copper refiner and port operation source their freshwater from the local supply system fed from the Ross River Dam. In 2007, the copper refinery consumed 110 megalitres of freshwater while the port consumed 3.7 megalitres.

Surface and groundwater use

There were five storm water discharges from the Xstrata Mount Isa Mines lease in 2007 due to high rainfall events. This compares to a total of 12 storm water discharges during the 2006 reporting period. Operational areas are responsible for managing their stormwater facilities and there has been a continued commitment to reducing the potential for off-site discharges within these operational areas.

Ernest Henry Mining continued to pump groundwater from dewatering bores around its pit. This helps them to maintain dry mining conditions and ensure safe pit wall stability conditions. Groundwater water levels and quality are measured at 75 bores surrounding the mine.

In 2007 Ernest Henry Mining’s groundwater specialists completed the third major revision of the site groundwater model. This will assist Xstrata Copper to refine its current drawdown predictions after mining activities are completed.

Groundwater quality surveys were also undertaken on Ernest Henry Mining’s neighbouring properties to confirm that water quality had remained unchanged since

the mine’s development. This information is shared with our neighbours to assist them with property planning.

Key stormwater improvements completed in 2007 across the Xstrata Copper North Queensland Division included:

increasing the containment capacity ■

within the Death Adder Gully catchment in Mount Isa by around 70 megalitres;

completing the remediation of areas ■

of historical contamination within the site drainage system at the Townsville copper refinery;

initiating the design of an integrated ■

stormwater management system for the copper refinery; and

completing the design of the eastern ■

yard stormwater upgrade for the port operation.

Raw water use

In 2007 Ernest Henry Mining dewatered 3,863 megalitres of pit water from dewatering of bores and in-pit pumps. Sixty-four per cent of this water 2,487 megalitres was recycled or re-used primarily as raw water in the copper concentrator and as a dust suppressant.

Our Townsville port operation recycled approximately 0.5 megalitres of water in 2007 while the copper refinery used 44.63 megalitres of captured stormwater for irrigation.

Our Mount Isa copper operations jointly implemented key initiatives in 2007 which included installing and connecting new electronic water meters to the Itron Enterprise Edition (IEE) energy management system. IEE enables operational areas to monitor real-time consumption of resources including electricity, compressed air and water on-line. Performance is measured on reduced consumption of water.

Mine Development Technician, Adam Woods, undertakes maintenance on the Ernest Henry Mining pit dewatering line

Townsville copper refinery Environmental Advisor, Kelly Malone, takes readings from the automatic surface water sampler

The long term water intensity trend is also increasing, but again the underlying trend improved across the Division in 2007. Metering of water consumption was improved in 2007 at Mount Isa, allowing identification of leaks and wastage in a more timely manner. This work is ongoing. Copper Refinery production increased during 2007 with limited impact on water consumption resulting in an improved water intensity.

0

Fresh water intensity

kilolitres per tonne contained metal kilotonnes

200520042003 2006 2007

100

Consumption Consumption (linear)

20

60

40

80

“Our key focus is to minimise freshwater usage and maximise process water usage at our operations.”


During the next three years additional water meters will be installed and connected to the IEE. This will enable us to report against the total volume and percentage of water recycled and re-used at our Mount Isa copper operations in 2010.

BiodiversityXstrata Copper’s North Queensland Division manages an area of 24,305 hectares of land in North Queensland.

We manage 1,100 hectares of land in the Townsville State Development area. In Mount Isa we manage 16,205 hectares within a regional biodiversity habitat referred to as ‘common in the North West Queensland Bioregion’ by the Queensland Environmental Protection Agency. At Ernest Henry Mining we manage 7,000 hectares of land situated within the Gulf Plains Bioregion just north of the border with the same bioregion. No additional land was disturbed as part of our mining operations in 2007.

Progressive rehabilitation is a key part of our Life of Mine planning. At Ernest Henry Mining we rehabilitated 79.6 hectares of land as part of the tier 2.5 waste rock dump. Our Mount Isa and Townsville operations have not yet had land become available for rehabilitation.

However, our Townsville copper refinery land is bordered by Stuart Creek which is a permanent freshwater creek. In conjunction with other stakeholders situated along the creek and non-profit conservation groups, we have commenced a program of restoration on the creek’s edge. This work includes removal of weeds and the revegetation of creek banks using endemic species.

Ernest Henry Mining

Our Ernest Henry mine has a comprehensive copper concentration and dust monitoring network that measures emission levels in the vicinity of its leases. They continued to monitor dust deposition rates and copper concentrations up to 15 kilometres from the mining leases. There are no residences located in this area and due to low rainfall and cattle grazing activities the background dust levels are normally quite high.

In 2007, there was no identified increase in dust deposition rates outside the Ernest Henry boundary. use of water carts in the pit area and on unsealed roads and sprays on conveyors in the concentrator continued to be used as the primary means of dust control.

Townsville copper refinery and port operation

Stack emissions testing at the copper refinery in 2007 confirmed full compliance with licence conditions. This included emissions from their Scheibler filters where work conducted in 2006 and 2007 was aimed at reducing emissions concentrations from these sources.

Two dust monitors have been purchased for installation at the port operation in early 2008. These real-time monitors will be used to measure dust concentrations during ship loading activities. They will be used to optimise the port’s operational activities to minimise any generation of dust.


At Xstrata Mount Isa Mines we have a comprehensive sulphur dioxide and dust monitoring network that measures emission levels in the community.

Our Air Quality Control centre (AQC) incorporates 15 monitoring stations throughout the city that monitor ambient air quality levels in the air, and in turn direct operations at Mount Isa Mines copper and lead smelters and Incitec Pivot’s acid plant. These include:

10 sulphur dioxide real-time monitoring ■

stations located in the community to ensure that the smelters operate within accepted regulatory limits (every resident of Mount Isa lives no more than 1,200 meters from a sulphur dioxide real-time monitoring station); and

five high-volume dust samplers located ■

throughout the community to monitor levels of respirable (particles small enough to be breathed in) lead, cadmium and arsenic in the air.


As part of our progress towards the Xstrata HSEC Biodiversity and Land Management standard, Xstrata Copper North Queensland has developed a biodiversity strategy that incorporates a framework to assess potential impacts on biodiversity due to mine operations – from feasibility through to decommissioning phases.

Our Mount Isa operations also have a Biodiversity Environmental Management Program that sets specific targets for monitoring and assessing habitats. An independent biodiversity risk assessment was commissioned in 2007 as part of the ongoing monitoring and assessment process.

The report is expected to be finalised in 2008, and we will incorporate the results into the Xstrata Mount Isa Mines Biodiversity Strategy. It will then be used to guide future biodiversity protection and enhancement activities across the Mount Isa operations.

The International union for the Conservation of Nature and Natural Resources (IuCN) Red List indicates that a species of biodiversity significance, the Carpentarian Grass Wren, is located north of the Mount Isa Lease. No species of significance are indicated at our Ernest Henry Mining or Townsville operations.

However, terrestrial fauna and flora assessments undertaken by Ernest Henry Mining in 2007 on the north waste rock dump rehabilitation trial, identified many species located on rehabilitated land. These included the Striped Faced Dunnart, Long-tailed Planigale, and Eyrean Earless Dragon.

Our Biodiversity Strategy ensures that provisions are made for continual monitoring to identify the existence of any species of biodiversity significance on the mining leases. In the case that any are found, our operations will be managed appropriately.

The Xstrata Copper North Queensland operations had no significant regional effects on the environment in 2007.

EmissionsEmissions monitoring, control and impact reduction strategies are a major component of environmental management at Xstrata Copper’s North Queensland operations. They are essential to minimise the impact of our activities on the communities in which we operate as well as the environment.

‘Ptilotus exaltatus’ more commonly known as Lambs Tail is located in the area around Ernest Henry Mining


Results

Lead levels for the high volume dust samplers are consistently well below the Xstrata Mount Isa Mines licence limit of 1.5 micrograms per cubic metre for lead in respirable dust (PM10) averaged over a three month period, the Queensland Government guideline limit of lead in total dust (TSP) of 1.5 micrograms per cubic metre averaged over a three month period, and below the Federal goal (NEPM) of 0.5 micrograms per cubic metre of lead in total dust (TSP) averaged over a year. The Federal goal is in line with the World Health Organisation guidelines.

Annual average ground level sulphur dioxide concentration results increased to an average of 31 micrograms per cubic metre in 2007, mainly due to the installation of improved monitoring equipment which results in more accurate as well as improved real-time information. This result is well below the Mount Isa Mines Limited Agreement Act annual required level of 80 micrograms per cubic metre.

Weather conditions during 2007, combined with a planned 20 day maintenance shutdown of the acid plant in November and December resulted in a total of 1,050 forced downtime hours at the copper smelter compared to 654 hours in 2006 due to the intervention of Air Quality Control (AQC).

Annual sulphur dioxide emissions

tonnes (’000s)

105 13

0

122

11514

0

119 10

9

8810310

0

Copper Smelter Lead Smelter

224

239

210

21824

0

200520042003 2006 2007

The copper smelter has achieved a 408,934 tonnes per annum (77%) decrease in sulphur dioxide emissions since the Acid Plant, now owned by Incitec Pivot, was introduced in 2000. The lead smelter has achieved a 43,953 tonnes per annum (33%) decrease in sulphur dioxide emissions since 2000 through improved process control.

RSL Club, Barkly Highway

Erap St

Racecourse, Simpson St

Sunset State School

Station St Qld Country

Credit Union, Camooweal StKruttschnitt Oval

Incitec Pivot acid plant

car park

FN Land, Fourth Ave

Parkside Flats, Railway Ave

Brett Ave

Opal St

Kookaburra St

Miles St

SO2 MonitorsTEOMs *Hi-Volume Monitors

Mount Isa MinesMount Isa Mines

North

14 13

31

17.6

9.4

Annual average ground level sulphur dioxide concentration

μg/m3 SO2

200520042003 2006 2007

Mount Isa Mines Licence Limit of 80 μg/m3

Annual average ground level SO2 concentration results increased to an average of 31 micrograms per cubic metre in 2007. The Annual Average graph for Sulphur Dioxide Concentration indicates a decrease of 68% from 662,657 tonnes in 2000 to 209,770 tonnes in 2007.


Ambient PM10 lead-in-air 90 day average concentrations for monitored sites

Ambient lead-in-air (PM10) concentrations in Mount Isa remained significantly lower than the MIMLAA air standard for 90 day average in 2007. Note: The 90 day average calculation is calculated backwards, therefore the average graph lines on the graph conclude in October.

For 90-day average Mount Isa Mines remained well below 0.5 μg/m3.

0

μg/m3

200520042003 2006 2007

2.0

Mount Isa Mines Limited Agreement Act level

Monitoring Locations

RSLMiles St

BSDRacecourse

Kruttschnitt Oval

1.0

0.5

1.5


Ambient PM10 dust-in-air

From a sustainability perspective lead-in-air is the more accurate and relevant indicator for public reporting over ambient PM10 dust-in-air. The total levels remain well within the EPA’s total dust-in-air requirements for annual average concentrations. Therefore, from 2007, we will no longer include the ‘Ambient PM10 dust-in-air concentrations for the monitored sites’ graph (which appeared on page 18 of our 2006 report).

National Pollutant Inventory (NPI) Xstrata Mount Isa Mines reported to the National Pollutant Inventory (NPI) for the Australian financial year 2006 to 2007 as per Federal Government requirements. The NPI provides data on emissions only and identifies potential hazards associated with listed substances. Any real community impacts on the Mount Isa community are not directly related to NPI data.

During 2007 we reviewed all emission estimation techniques, collected data, and developed a reporting procedure. In addition, Xstrata Mount Isa Mines worked collaboratively with the Queensland Environmental Protection Agency in reviewing previous years’ NPI submissions. In 2008, we will further refine the reporting procedure and estimation techniques to ensure that reporting continues to be conducted in a rigorous manner.

Mount Isa Mines reported fewer emissions to the NPI database in 2006/07 than in the previous year for six of the seven substances for which it is the top emitter. These were arsenic, cadmium, copper, lead, sulphur dioxide and zinc. These reductions were due to improvements in emissions management, changes in ore content, processes and volumes of materials handled, as well as instances of over-calculating emission volumes in previous years. The volume of antimony increased in this reporting period due to changes in the mineral content of the copper concentrate feed for the Mount Isa copper smelter.

Detailed information regarding our NPI performance can be accessed via the Australian Government’s Department of the Environment, Water, Heritage and the Arts website (www.npi.gov.au). Our 2007 NPI data was released by the Government on 31 March 2008.

Dust management at the portThe Townsville Port handles large volumes of zinc, copper and

lead concentrates from both Xstrata sources and from third party

companies every year. The concentrates are railed or trucked in and

loaded onto ships.

case study

Dust generated during shiploading operations at Townsville Port has been minimised by the installation of dust screens to the concentrate shed

Due to the characteristics of the materials being handled dust management is integral to minimising pollution impacts from the operations. Townsville Port is close to residential, and community areas. Further improvements in dust management are also being driven by our continuous improvement programs, as well as the desire to be recognised leaders in environmental performance.

One of the most significant potential sources of dust generation is the ship loading operations on Berth 7. In 2007, a strategy was developed to help manage the dust impacts from the ship loader. Two real time ambient air quality monitors will be installed downwind of the ship loader

during early 2008. The dust concentrations will be measured constantly and the results displayed on the operations screens of the ship loader control room.

Based on baseline air quality data previously collected in the area, the system will be set to send an alarm when a dust event occurs over a set trigger level. Procedures will then be in place to modify operations to reduce the levels of dust. A secondary benefit of the samplers will be to collect air quality data over time to allow trends and relationships between weather, operations and dust concentrations to be identified. This will lead to a far greater understanding of the emissions to air from Xstrata’s operations.


Smelter Emissions ProjectDuring the year, Xstrata Copper North Queensland established a Smelter Emissions Project Team to assess opportunities to improve capture and treatment of sulphur dioxide (SO2) emissions at the copper smelter against our target rate of 95% by 2012. Specifically the team is assessing opportunities to improve site-wide capture and treatment of sulphur dioxide at its Mount Isa copper operations.

The team is developing potential designs through a consultative process with stakeholders and, where feasible, will implement these controls during the next five years.

The Smelter Emissions Project will build on capture, treatment and process control improvements that have been implemented in the copper smelter over approximately the past three years. These improvements consist of both engineered and administrative controls and include:

completing hooding upgrades to four ■

converters to reduce the likelihood of fugitive emissions coming from this part of the smelting process;

implementing a daily planning process ■

to promote a nine hour converter cycle, including staggered converter operations to match the Incitec Pivot’s acid plant capacity to maximise the amount of process gas being captured and treated;

purchasing an in-line stack monitor for ■

real time measurement of SO2 emissions not captured and treated in the acid plant;

installing additional sampling ports in gas ■

handling systems to develop improved data to base designs; and

undertaking a specialist review of the ■

copper smelting process to better define flow volumes and SO2 concentrations in various parts of the process so that additional capture and treatment options can be considered.

Improvements to the capture and treatment process will also mean that any heavy metal entrained in these gasses is also controlled.

The potential value of the Smelter Emissions Project is currently estimated at between $100 million and $200 million including design, construction, and commissioning.

WasteXstrata’s Product Stewardship standard requires that all operations eliminate, reduce, re-use, recycle or responsibly dispose of waste generated. In line with this standard, Xstrata Copper North Queensland has a waste management system that is continually evolving to suit the needs of operational areas.


Waste Type Amount Treatment Method

Waste rock

(t) 1,650 Burial in Mount Isa Mines licenced landfill (TVL)

28,840,282 Stored as per the EHM Plan of Operations approved by the Environmental Protection Agency (EHM)

General Waste

(t) 799 Disposal in approved non-hazardous waste landfill on-site (EHM)

159 Landfill disposal (TVL)

18,932 Disposal at Mount Isa Mines licenced landfill (MIM)

Hazardous waste off-site disposal

(t) 75 Licenced contractors all regulated waste; Oils and batteries recycled (EHM)

6,414 Various disposal and treatment facilities (TVL)

Scrap metal (t) 1,214 Processed on-site and transported off-site for recycling (EHM)

3,965 Approximately 1,800 tonnes of this scrap metal was associated with the demolition of the Crusher Building at the copper concentrator. The bulk of Mount Isa Mines’ scrap metal was transported to China and India for recycling in 2007.

232 Off site recycling (TVL)

Spent electrolyte

(t) 5,175 Re-used in Xstrata Mount Isa Mines’ electrostatic precipitator dust leaching plant (TVL)

Tailings (t) 10,901,829 Stored in licenced facility as per EHM Plan of Operations approved by the Environmental Protection Agency (EHM)

5,656,580 Tailings at Mount Isa Mines are stored as per the Tailings Placement Strategy in large dams contained within a natural valley. The structural integrity of the tailings storage facility is inspected on a monthly basis by a third party consultant. (MIM)

Waste hydro- carbons

(l) 629,400 Collected by a specialist subcontractor for off-site recycling (EHM)

265,260 Collected by a specialist subcontractor for off-site recycling (MIM))

20,580 Collected by a specialist subcontractor for off-site recycling (TVL)

At its core is a waste management contract for general waste and scrap metal collection based on a ‘polluter pays’ principle. Waste costs are distributed to departments according to the volume they generate. The incentive is that any money received through scrap metal recovery in their area is credited back to the department responsible for that area.

In 2007 the copper refinery and port operation introduced additional facilities for disposal of oily waste materials. The copper refinery also identified areas of historical land contamination and excavated

the soil. Approximately 1,500 tonnes of contaminated soil was exported to Xstrata Mount Isa Mines for disposal at their regulated waste tailings dam.

A number of waste sludge streams are generated at our Mount Isa copper operations. Where sludges have elevated levels of copper and therefore economic value, they are reprocessed. If they do not have any economic value they are disposed of within a designated cell at the Mount Isa Mines landfill, which is licenced to receive such wastes.

Environmental Sampler, Graham Milligan, checks the dust concentration monitor located along the Barkly Highway at Mount Isa



Our North Queensland operations generate a number of different waste streams. The table on page 33 identifies the major waste streams Xstrata Copper generates and the disposal or treatment method for each waste stream.

Managing salvageable wasteXstrata Copper North Queensland’s facilities work together to maximise the value it gets from its products and its by-products. Where we are unable to reprocess or recycle by-products on or off-site or that are not oils and greases, we take responsibility for these wastes and store them appropriately in the licenced regulated waste landfill located at Mount Isa.

Mount Isa is one of few mine sites located in Queensland that maintains and operates a licenced regulated waste landfill. By-products received from Xstrata Copper’s North Queensland operations and the Incitec Pivot acid plant in 2007 are detailed in the table on page 33.

At Xstrata Copper’s North Queensland operations in 2007 there were:

no significant discharges of waste ■

to water;

no significant spills of chemicals, oils, ■

fuels, tailings or slimes;

no water sources or ecosystems ■

significantly affected by discharges of water and run-off; and

no significant environmental impacts ■

of transportation used for logistical purposes.

Mine closure planning Xstrata Copper maintains closure plans which are reviewed periodically and include closure cost estimates for each of its North Queensland sites. The anticipated costs of decommissioning and rehabilitating areas affected by activities associated with mining and minerals processing are incorporated into long-term financial models.

As the anticipated closure date of one of our mines approaches, comprehensive plans are integrated into the broader closure plan to address identified social, labour, environmental and economic issues associated with closure. Throughout the life of an operation the closure plan is updated to reflect resource models.

Our policy of progressively rehabilitating areas of the mine no longer required for operational purposes is extended to redundant areas of plant.

At Mount Isa, a number of redundant pieces of plant were demolished including two large crushing facilities. Such demolitions ensure that the mine site is a clean, safe and efficient workplace and our closure liability is reduced.

Demolition estimations progressed in 2007 and will continue to evolve during 2008. The process has involved engineers from across the site compiling more than 6,000 structural drawings and images of all major facilities at Xstrata Mount Isa Mines. Closure planning at EHM is well progressed with ongoing rehabilitation of waste rock dumps the physical environment is one which we are proud to report we are managing well in a ‘rehabilitate as we mine’ program. In 2007 79.6 ha of the Ernest Henry waste rock dump was rehabilitated as part of this progressive rehabilitation program.

The social impacts of mine completion were assessed during 2007 via a Social Impact Assessment (SIA) undertaken by the university of Queensland.

An Xstrata internal audit of our progress to closure has included an action plan which details anniversaries of significant milestones which includes completion of open pit operations in 2010, processing of open pit ore completed in 2012 and rehabilitation of existing operations completed in 2014.

A communication plan was actioned in August 2007 with quotes circulated to all employees as to what benefits would be payable at completion of operations. This is notwithstanding any further value adding from underground or Magnetite feasibility projects which will have closure scope presented as part of Ernest Henry Mining’s activity in 2008.

At the Townsville port and copper refinery comprehensive demolition estimates were developed. The demolition estimates provide detailed breakdowns of costs associated with the demolition and clean up of all infrastructure to meet set closure criteria.

While closure of these facilities is not anticipated for many years, the closure plan provides a context for closure, identifies risks, and summarises the cost of closure for appropriate provisioning.


Whole of Emissions StudyIn 2007 Mount Isa progressed its Whole of Emissions Study to assess

potential risks to human and ecological health in the Mount Isa community

from current or previous mining operations in and around the city.

The study has been designed around three material phases to investigate and assess emissions to:

land (Phase 1); ■

air (Phase 2); and ■

water (Phase 3). ■

World renowned toxicologist, Associate Professor Barry Noller was appointed by the Centre for Mined Land Rehabilitation (CMLR) which is part of the university of Queensland’s highly regarded Sustainable Minerals Institute, to undertake the study in April 2007. His team is currently completing the initial study into Phase 1 – Emissions to Land.

The purpose of Phase 1 (Land) was to assess the effectiveness of remedial works completed by MIM Holdings in cooperation with the Mount Isa City Council and the Queensland Government CHEMunit, between 1991 and 1994, to remove mining sediments in areas adjacent to the town complex and Leichhardt River. The sediments were deposited into these areas during the 1940 and 1950s when river disposal was considered acceptable. Historical data and 21 representative soil and sediment samples were analysed.

Xstrata Mount Isa Mines commenced the Leichhardt River Remediation Project in March to achieve this purpose. Stage 1 consisting of the sampling and analysis was completed in September and Stage 2, which includes the removal of contaminated material from the Leichhardt River, is scheduled to commence in mid 2008 after Mount Isa’s wet season has passed.

OverviewDuring the initial Phase 1 study, 21 representative soil and sediment samples were collected from upstream and downstream of the Leichhardt River in Mount Isa, including samples taken from the vicinity of the velodrome (Wellington Oval), the local swimming pool (Splashez), Kruttschnitt Oval, and the Skate Park. These samples comprised 13 soils, 6 sediments and 2 samples for acid generation properties and are indicated in Figure 1.

The aims of the Phase 1 Emissions to Land study, as one of the three material phases being assessed in the Whole of Emissions Study, are to:

1. Establish the bio-accessible levels of lead based on the Physiologically-Based Extraction Technique (PBET) compared with total concentrations and National Environment Protection Measure (NEPM) guidelines for soil in the Leichhardt River and the swimming pool area;

2. use the bio-accessible levels as indicators of bio-availability of heavy metals to human beings; and

3. Assess impact on the aquatic ecosystem by comparison with the Australian and New Zealand Environment Conservation Council Interim Sediment Quality Guidelines (ANZECC – ISQG).

ResultsLaboratory analysis of the 21 representative samples was completed using the Physiologically-Based Extraction Technique (PEBT) that simulates transfer through the gastro-intestinal tract of a human being. This method provides a good estimate of the bio-availability of lead.

Results from Phase 1 were compared to the National Environment Protection Measure (NEPM) soil guidelines. These guidelines set limits for the concentration of lead. Initially, results of the analysis showed exceedances of total concentrations for seven sites, assuming 100% bio-availability. Comparison of the measured bio-accessibility from the PBET results, when applied as a factor against total concentration, gave site specific bio-accessibility concentrations and showed that only a small number of sample site/element combinations could be considered to be a potential risk to human health, requiring further investigation. However, these geographical areas are areas of low public activity.

A desktop risk assessment for human health shows that an amount of two kilograms of the highest level of total lead found in historical mine sediments would need to be consumed daily for a lifetime by an adult, and 400 grams daily by a child, to induce poisoning from lead.

Samples at the Skate Park, Kruttschnitt Oval, and swimming pool, as well as downstream in the Leichhardt River, showed only low levels of lead. These areas were emphatically ruled out as being potential areas of risk to the community.

Xstrata Mount Isa Mines released a public Community Briefing Paper titled Whole of Emissions Study Phase 1 – Emissions to Land; Study of Lead in the Leichhardt River and Surrounding Locations regarding these results. The briefing paper can be viewed on the Xstrata plc website (www.xstrata.com).

Further studies are scheduled for 2008 in order to better understand the mineralisation in the community as well as to make more informed decisions based on scientific facts, as part of the recommendation from CMLR.

Figure 1 – Representative soil samples were collected from the Leichhardt River

‘Total lead’ is a direct measurement of its concentration in a soil sample. The ‘bio-availability’ of this lead represents the proportion that a person can potentially absorb from the total lead in the sample. The ‘bio-accessibility’ represents a proportion of the bio-available lead that could reasonably be absorbed by a person if the sample was ingested.

With bio-accessibility, a time component is considered that reflects the time ingested material could stay in a person’s gastro-intestinal tract before it is passed out of the body. This will vary based on body mass, however, in setting allowable intake limits the World Health Organisation (WHO) adopts a body mass average of 14 kilograms for a child and 70 kilograms for an adult.

case study

Opposite page: Associate Professor Barry Noller measures sediment depth in the Leichhardt River bed as part of the Leichhardt River Remediation Project

Caring for our communityXstrata Copper is proud of its reputation for social responsibility and we are committed to

contributing to the social, economic and institutional development of the communities where

we operate to improve the quality of life for all.

Xstrata Copper’s corporate social involvement programs (CSI) are developed in line with Xstrata’s CSI policy and guidelines and form an important part of our work with local communities. Through these programs we develop community partnerships in the areas of art and culture, education, enterprise development, environment, social and community development, and health. These community partnerships contribute to the development of sustainable communities and emphasise local capacity building. Xstrata Copper also supports local businesses and employs local people wherever we operate, in order to strengthen local and regional economies.

As outlined in Xstrata Copper’s Community Policy, our community relations practices are characterised by open and honest engagement with all our stakeholders through effective, transparent consultation and communication. We consult and communicate with stakeholders regularly in culturally-appropriate and respectful ways, using materials that are easily understood and provide feedback to issues raised in a similar way. We record, monitor and address community complaints. We establish fair and equitable processes for engagement with indigenous and local communities including, where relevant, free prior informed consent.

Xstrata Community Partnership ProgramIn 2007, Xstrata Copper supported 51 Xstrata Community Partnership Program North Queensland (XCPP NQ) initiatives in the communities in which it operates, with a combined program value of $1,121,000.

The program, established in 2004, reflects our belief local communities should benefit from our operations, both in the short and long term. Since its inception the program has been extended to support more than 60 initiatives with a total program value of almost $6 million.

The XCPP NQ is delivering real improvements to our North Queensland communities where our employees and their families live and work, and the community has responded positively. We will continue to build on the program’s many successes in 2008 and launch our new community partners for the 2008 to 2010 three-year period.



Sponsorships and community donationsIn addition to the XCPP NQ, Xstrata Copper invested $504,000 in 2007 on sponsorships, donations and other community support initiatives in Cloncurry, Mount Isa, and Townsville. A selection of our 2007 sponsorships include the:

Mount Isa Rotary Rodeo and Mount Isa ■

Mining Expo;

North Queensland Wheelchair Tennis ■

Championships in Townsville;

Cloncurry Merry Muster and Stockman’s ■

Challenge;

NAIDOC Week’s 50th anniversary ■

celebrations Looking Forward Looking Blak;

Camooweal Campdraft, Rodeo, and ■

Drovers Camp;

Environment Volunteers Australia to ■

revegetate Stuart Creek in Townsville; and

Kalkadoon Language Pictorial Dictionary ■

and CD (co-funded).

Indigenous peoples and cultural heritageWe respect the traditional rights and support the protection of cultural heritage of indigenous people, recognising that they have a distinct ethnic identity and are often historically disadvantaged. We ensure that Indigenous and other historically disadvantaged groups are properly identified through our stakeholder engagement.

Xstrata Copper North Queensland structures its engagement activities in a manner that is culturally appropriate, and facilitates the active involvement of indigenous peoples in consultation, including capacity building initiatives where necessary or appropriate.

Caring for our community

Right: Townview State School students were presented with copies of the

Kalkadoon Language Pictorial Dictionary in November following Mount Isa Mines’

sponsorship of its development. The dictionary aims to enhance the preservation of the

Indigenous Kalkadoon language

Opposite page: School excursions to tour the Mount Isa Mining Expo are sponsored

annually by Xstrata

Xstrata Copper CSI expenditure by community

44% Mount Isa Mines (Mount Isa)

34% Ernest Henry Mining (Cloncurry)

22% Townsville Operations (Townsville)

Xstrata Copper XCPP NQ initiatives by type

23% Enterprise and job creation

24% Social/community development

26% Health

16% Education

10% Art and culture

1% Environment

Xstrata Copper CSI expenditure by type



18% Health

16% Education

10% Art and culture

3% Environment

Sponsorships and donations by type



1% Health

15% Education

9% Art and culture

8% Environment

In 2007, no cultural heritage sites were disturbed by our copper operations in North Queensland. We assessed all new mining and project areas for cultural significance, such as archaeological and sacred sites, prior to disturbance and in consultation with indigenous people. We worked together to develop strategies to avoid impacts where possible and to ensure access to important sites. Cultural Heritage Management Plans for these sites and significant areas were jointly developed and access was provided on an agreed basis.



Selection of Xstrata Copper’s Community Partnership Program initiativesEnterprise and job creationProject Partner Description Timeframe Status/update

Centacare Indigenous employment and training

North West Queensland Catholic Indigenous Social Services (previously Centacare Indigenous Employment)

Further develop Indigenous employment initiative to identify and exploit employment opportunities for Indigenous job seekers in the north west minerals province

2005 to 2007 A total of 8 five week industry specific mining courses run with approximately 71% of graduates obtaining employment in the mining industry. This project is now also partnering with other local training organisations

Fish Stocking Hatchery Mount Isa Fish Stocking Group Construction of hatchery facility to raise fingerlings for release into local waterways

2007 Shed to house hatchery facility purchased. Erection will occur during 2008

Cloncurry Tourism Development Plan

Consultative Committee and Road Tek

Established destination signage along the tourist drive between Cloncurry and Mount Isa, known as Fossickers Way

2006 to 2007 Signage designed, constructed and placed at historic, geographical and recreational places of interest

HealthProject Partner Description Timeframe Status/update

Diabetes Centre Queensland Health A centre to provide consistent, modern diabetes management, including a diabetes educator for outlying Indigenous communities

2005 to 2007 During 2007 the centre treated and advised more than 1200 patients; diabetes educator also presents workshops for health workers in outlying communities and provides information sessions for community groups and schools

Enhance RFDS capabilities Royal Flying Doctor Service Provide funding for RFDS to purchase medical equipment

2005 to 2007 Oxylog 3000 portable ventilator purchased; latest technology satellite phone and tracking system installed to rescue and retrieval aircraft

Consolidated Health Service

Queensland Health Deliver funding to assist the Cloncurry Hospital’s transition to a Queensland Health Multi-Purpose Service (MPHS)

2007 Celebrated success with Queensland Health initiative to establish MPHS from 2007

Cloncurry Hospital Equipment

Queensland Health Provide funding for I-Stat Machine funding to support equipment purchase

2005 to 2006 The latest I-Stat machine was purchased to improve equipment at the local hospital

Emergency health equipment

Townsville Hospital Foundation Funding of emergency life support equipment for Townsville Hospital and Queensland Rescue helicopter

2005 to 2007 In 2007 funding was used to purchase an Oxylog3000 ventilator and to update the children’s room in the Emergency Department

EducationProject Partner Description Timeframe Status/update

Multimedia Learning Development Centre

Townview State School A new multimedia centre to educate students and teachers in technology and IT skills

2005 to 2007 Centre upgraded to hold over 20 computers and associated equipment, data projection equipment and electronic touch-screen blackboard purchased and permanent computer technician employed

Recreation Surface Cloncurry State School Install synthetic grass surface under Burke and Wills Shed

2007 Dignitaries, teachers, parents and students celebrated the renovation of the Burke and Wills Shed

Recreation Shed St Joseph’s School Install shelter over basketball court 2007 More than 60 locals and past residents of St Joseph’s Catholic School attended the blessing of the shelter

EnergySMART schools initiative

Oonoonba State School, Townsville State High School

Improving student understanding of energy smart initiatives

2005 to 2007 Wind turbine and solar pyramid installed at Townsville State High School is powering a classroom

Arts and CultureProject Partner Description Timeframe Status/update

Bringing music to students in local and outlying areas

Mount Isa Concert Band and Mount Isa String Orchestra

Purchase of equipment and instruments for 400 students participating in the Mount Isa and District Instrumental Music Program

2007 to 2008 A range of musical instruments including double bass, timpani, oboe, bassoon, and tuba purchased, as well as music folders, and a storage facility for musical equipment; instrumental maintenance carried out; orchestral workshop held for the community featuring guest conductor from Sydney

Ernest Henry Cloncurry Arts Show

Cloncurry Arts Council Provided funding to support the staging of the art show

2006 to 2007 Over 250 people attended the art shows

BIO-Cinema Big Screen Film Festival

Australian Film Festival, BIO-Cinema Provide funding to assist the BIO-Cinema to hold the Australian Film Festival

2005 to 2007 Adults and school students of all ages attended the Festivals held 2005 to 2007

Educating through art Perc Tucker Regional Gallery Children’s Art Exhibition 2006 to 2008 In 2007, children were involved in the Gallery’s Strand Ephemera

EnvironmentProject Partner Description Timeframe Status/update

Beautification Works Greening Australia, Cloncurry Shire Council, Main Roads

undertake beautification works at Ramsay Street bus-stops and footpaths, including paving and design

2006 to 2007 Progressed with designs and part construction with completion planned for mid 2008

Community Renewable Energy – Townsville Knowledge Centre

Ergon Energy Broaden educational opportunities for community groups and school on the benefits of renewable energy

2006 Launched in 2007, this project is now up and running at the Townsville Library with savings to the library’s electricity costs of $500 per year

Social and Community DevelopmentProject Partner Description Timeframe Status/update

Mount Isa home skills support development project

Mount Isa Community Development Association

Education and training in basic life skills for disadvantaged people living in community housing

2005 to 2007 Training modules and kits developed and implemented with clients of 40 households

Life skills programs for disadvantaged persons

Mount Isa Family Support Service and Neighbourhood Centre

Development of several programs to assist disadvantaged members of the community

2007 to 2009 Life skills facilitator appointed and ‘Womens Group’ and ‘Girls with a purpose’ programs launched

Cloncurry Skate Park Lions Club of Cloncurry, Cloncurry Police, Mitakoodi, Cudeco

Provide funding for the construction of a skate boarding park for youth

2005 Skate park opened in mid 2007. Skate park is regularly attended by youth of all ages

Indigenous youth worker Police Citizens youth Club, Mitakoodi Aboriginal Housing Cooperative

Provide funding for an Indigenous youth worker 2005 to 2007 youth Centre now open and regularly attended. youth Crime statistics have dropped

Mount Isa to Townsville Cycle Race

Townsville Cycle Club Funding support to stage this 900 kilometres cycle race

2005 and 2007 The 2007 race was held at Easter attracting five teams. Winning teams choose to donate their prize money to a charity of their choice

Saving lives Australian Volunteer Coast Guard’s Townsville Flotilla

Purchase of a new in shore rescue vessel 2007 Built under survey, this vessel will be launched in early 2008



Stakeholder engagement and consultationWe encourage dialogue with our stakeholders and integrate stakeholder feedback into business planning and strategy. Stakeholder feedback is used to identify and manage risks and opportunities, guide our strategy and business activities, protect and develop our corporate reputation, strengthen stakeholder relationships, manage expectations, respond to concerns and share our plans for the business.

Our key stakeholders include:

residents of Cloncurry, Mount Isa, ■

and Townsville;

Xstrata Copper employees and ■

contractors, unions and other organisations that represent these groups;

Traditional Owner groups in North West ■

Queensland;

business partners, including joint venture ■

partners, suppliers and customers;

local, state, and national governments ■

and their agencies;

inter-governmental bodies and ■

organizations;

local schools; ■

local, regional, national, and international ■

media; and

non-government and community based ■

organisations.

Monique Albers and her Delta Dog, Diddle, visit Mrs Valerie Burdock a resident at the Good Shepherd Home in Townsville

Engaging with our local community is critical to understanding community priorities. Sharing clear, open and honest information on our activities is also equally important to our social licence to operate. During 2007, we communicated with employees, contractors, stakeholders, local organisations, community members, visitors, local media and other interested parties using the following methods:

Distributed our 2006 Xstrata Copper ■

division and site Sustainability Reports to copper employees and key stakeholders;

Conducted a Community Attitudes ■

Survey of more than 900 residents in our North Queensland communities to gain feedback on issues of importance to them and determine where best to direct our future corporate social involvement efforts;

Conducted regular Community ■

Information Sessions to share information on Xstrata’s operations and allow questions from community members;

Held a special community briefing session ■

on Lead in the Community in Mount Isa;

Posted the Mine to Market newsletter ■

to the homes of all Xstrata North Queensland employees and stakeholders, and letter-box dropped to all Cloncurry residents;

Contributed articles and placed corporate ■

advertising in the North West Star newspaper’s Industry and Innovation lift out to keep members of the community informed about our operations;

Conducted anniversary dinners for ■

long-term employees celebrating 20, 30, 40 and 50 years of service;

Conducted regular surface tours of our ■

mining operations in conjunction with community tourism organisations;

Visited local schools to explain mining ■

processes to students studying mining units in science;

Ran a safety calendar competition to ■

engage children of the Mount Isa Copper Operations employees;

Published a Community Briefing Paper ■

regarding the Whole of Emissions Study;

Advertised the ■ Leichhardt River Remediation Project in the local North West Star newspaper by inclusion of an insert; and letter box dropped targeted residents and businesses in the immediate vicinity of project works;

Completed the Panel Assessment II ■

Community Perceptions Survey of 500 Mount Isa residents; and

Participated in regular meetings ■

with XCPP NQ partners.

A bronc-rider competes in the Xstrata sponsored Isa Rodeo


Providing the extras – The Townsville Hospital Foundation

As one of Xstrata’s inaugural Community Partnership Program initiatives, a very successful relationship has been forged during the past three years between Xstrata Copper and the Foundation. It is a relationship that has helped to ensure doctors at The Townsville Hospital, and in particular the Emergency Department, have the equipment needed to provide the best possible care to patients.

The plight and care of premature babies is an area that touches the heart. In 2007 Xstrata Copper established a new partnership with the Townsville Hospital Foundation to provide a much needed Retcam I II Digital Imaging

Machine for The Townsville Hospital’s Neo-Natal Intensive Care unit. Premature infants are frequently exposed to high levels of oxygen for their survival. The more premature and the sicker a baby, the greater is the possibility of change at the back of the eye which can result in a blinding eye disease, Retinopathy of Prematurity. The eyes of all babies at risk are routinely examined and early treatment is usually effective. The Retcam will allow better images to be stored for both diagnosis and prognosis.

Prior to having the Retcam, specialists had to rely on hand written descriptions of what was happening with babies’ eyes. With this

machine, dedicated professionals are now able to look into the recesses of the baby’s eye and capture accurate images. It is a major step forward in diagnosing problems which regularly occur in premature babies. As an added benefit, the Retcam is also a very useful device for the management of Retinoblastoma – a childhood eye cancer.

In the coming years, Xstrata Copper will continue its relationship with the Townsville Hospital Foundation enabling the Foundation to provide state of the art equipment across a range of areas with an ultimate benefit to the entire community.

Established in 1989, the Townsville Hospital Foundation is a non-profit, charitable organisation committed

to providing additional equipment, training, support programs and research funding to the Townsville

Health Service District.

Ophthalmologist Dr Bill Talbot with the Retcam II Digital Imaging Machine at The Townsville Hospital

case study


Cloncurry skate park

case study

In 2005, the residents of Cloncurry told Xstrata Copper via our bi-ennial Community Attitudes Survey that they wanted to see more activities developed in Cloncurry to keep their youth entertained. Ernest Henry Mining acted on this feedback and promptly addressed this need via an established Xstrata Community Partnership Program North Queensland partnership with key community groups.

Importantly, the skate park project not only addressed community feedback and delivered a new recreational activity for Cloncurry’s youth, but is also added to the popular PCyC venue as a safe and exciting community hub for young people.

Ernest Henry Mining’s XCPP NQ partner, the Cloncurry Lions Club, also achieved their stated objectives working on the skate park project. These included funding, assisting, and supporting the local youth of Cloncurry.

The $30,000 modular skate park was constructed by Rampage Design and officially opened on 25 August 2007. It is a sustainable structure for Cloncurry and a popular venue for local youth to display their skate boarding talent or just relax and enjoy themselves. In 2008, the partnership will deliver a shade structure for the skate park to ensure that young people are also sun safe while they use the venue.

The youth of Cloncurry were the proud recipients of a new skate park in 2007. Located on the

basketball courts behind the Police Citizens youth Club (PCyC), the skate park was delivered

through Ernest Henry Mining’s partnership with the Cloncurry Lions Club, Cloncurry Shire Council,

CuDeco and the Mitakoodi people.

EHM’s Community Relations Officer, Nicole King, with members of the Cloncurry Lions Club, proudly displaying the new infrastructure at the Cloncurry Skate Park

“It is a sustainable structure for Cloncurry and a popular venue for local youth to display their skate boarding talent or just relax and enjoy themselves.”


Community complaints

Description Number Action taken

Sulphur dioxide levels in the community

37 Complainants advised of AQC status and any action being taken.

Noise from activities on the mining lease

2 Investigation into source of noise.

Vibration from activities on the mining lease

2 Investigation into noise and vibration data from previous years.

CAS: Top three issues of concern to residents in our communities

Key Issues Result Action taken

Cloncurry

Fly in fly out roster changes

25% Introduce a new family friendly roster in early 2008. Cloncurry based employees will have the opportunity to work additional shifts during their days off.

Increase the local allowance for all Cloncurry based employees in 2008.

Lack of housing – affordability and quality issues

21% Capital budget allocation for housing has been included for 2008. Increased village accommodation took place in 2007 with 40 rooms and a further 40 rooms planned in 2008.

Water problems (eg. lack of, quality, supply, pressure)

17% Discussed opportunities with local stakeholders on the availability of using the Lake Julius pipeline.

Mount Isa

Housing 15% Implement Xstrata Housing Management Strategy in 2008.

Emissions (air pollution) 15% Continue the Whole of Emissions Study, and implement internal Smelter Project Team initiatives.

Employment opportunities 12% Expand apprentice intake at Xstrata Skills Centre, and establish new XCPP NQ partnerships in enterprise and job creation.

Townsville

Climate change (carbon emissions, global warming and greenhouse gases)

25% Energy Efficiency Opportunities program encompassing the energy breakthrough teams and greenhouse gas.

Poor health services 14% Implement new 2008 to 2010 XCPP NQ partnerships encompassing social infrastructure projects such as the Townsville Hospice and Palliative Care Centre.

Employment opportunities 14% Expand apprentice intake at the Xstrata Skills Centre, and capitalise on new XCPP NQ partnerships in enterprise and job creation for 2008 to 2010.

Valuing feedback Xstrata Copper conducted a Community Attitudes Survey (CAS) in June across its North Queensland communities in which it operates. We surveyed over 900 residents on their opinions of Xstrata’s community support programs, views of major social and environmental issues facing the community, the dissemination of information from each of our operations, and the best way for Xstrata to communicate news and information to the communities in which we operate.

The CAS help us to determine where our efforts in the community have been successful and to identify emerging areas where additional action may be needed. We undertake the CAS every two years to track resident opinion, the company’s performance and community concerns over time. In 2007, the issues of concern to residents in the communities in which Xstrata Copper operates are outlined in the adjacent table.

Handling complaints and enquiries Xstrata Copper North Queensland’s Community Relations Department handles all community complaints in the communities in which we operate and complainants are responded to promptly.

In 2007 our Townsville operations and Ernest Henry Mining received no community complaints.

In Mount Isa we operate a 24-hour community information telephone line to manage complaints and enquiries and to provide feedback to callers.

In 2007, Xstrata Mount Isa Mines’ copper operations received 41 complaints. This was one more complaint over the previous year. Complaints were due primarily to an increase in sulphur dioxide emission complaints during Incitec Pivot’s planned maintenance shutdown of its Acid Plant, for 20 days in November and December, and promotion of the community information telephone number in the Mine to Market newsletter and local North West Star newspaper during the year.


Townsville copper refinery Manager Logistics and Support, Greg O’Shea, and Dr Tanya

Richards from the Townsville Hospital Emergency Department with the newly purchased Oxylog 3000 ventilator purchased with funding from

the Xstrata Community Partnership Program’s Townsville Hospital Foundation initiative


We have invested in improving policies, procedures, monitoring and management of lead emissions from our mining and processing operations. The company is also participating in an alliance between the Environmental Protection Agency (EPA), Queensland Health, the Mayor of Mount Isa City Council and the state member of Parliament to plan and implement a whole of community lead management program.

This program is designed to help all residents manage their exposure to lead as a prominent, naturally occurring mineral in the environment found within homes, gardens and workplaces.

Non-natural sources of lead include dust and emissions from mining and smelting operations, historical contamination, incense sticks, candle sticks, and old paint and plumbing.

The key component to date has been Queensland Health’s blood lead testing of 403 Mount Isa children aged between one to four years which ended in December 2007 after 15 months of sampling. Of the 403 children tested, 45 have been found to have elevated lead levels above the recommended World Health Organisation’s recommended value of 10 micrograms per decilitre (μg/dL).

We have also provided a free and confidential lead in blood testing service to all Mount Isa

residents since 1993 via Queensland Medical Laboratories (QML).

A full report and analysis on the outcomes will be tabled by Queensland Health in May 2008 and will identify the priorities for action by the Living with Lead Alliance to sustainably reduce lead levels in Mount Isa.

Xstrata has already progressed appropriate actions to effectively manage and improve the environmental performance of its lead mining and processing activities in Mount Isa as part of a continuous improvement program. In 2007, this included:

rigorous monitoring of water and air ■

quality within EPA license limits for emissions standards;

major investments in new plant and ■

technology to reduce emissions from smelting operations;

a review of infrastructure, policies and ■

internal procedures to support stronger enforcement of ‘clean in, clean out’ practices for all lead risk employees and contractors;

the commissioning of university of ■

Queensland’s Centre for Mined Land Rehabilitation in late 2006, and world renowned toxicologist Professor Barry Noller, to undertake a landmark study – Whole of Emissions Study into Land, Water and Air – to assess the major

sources of non-natural forms of lead in the Mount Isa community, whether these are associated with mine operations, and the potential risk to human and ecological health;

the release of a ■ Whole of Emissions Study Community Briefing Paper detailing the results of Phase 1 – Emissions to Land;

completing the second Community ■

Perceptions Survey of the Mount Isa environment and air emissions, as recommended by the Panel Assessment Study in 2000, and committing to publicly releasing the results in early 2008;

committing to remediate a section of the ■

Leichhardt River as part of the Leichhardt River Remediation Project, which will commence following the 2008 wet season, to help manage and reduce lead in the river system caused by historical mining practices and erosion; and

the remediation of large tracts of land ■

and properties adjoining site operations, known as the ‘Greenbelt.

Active in the local community, Xstrata Mount Isa Mines also sponsored the Brilla Brilla Community Centre’s Breakfast Program to ensure that children living at yallambee Reserve on the banks of the Leichhardt River eat a nutritious breakfast each day before being taken to school by the dedicated Brilla Brilla school bus, also sponsored by Xstrata.

Lead managementcase study

Throughout 2007, Xstrata Mount Isa Mines has continued to take significant action to identify

and manage all forms of lead in the community and its internal Lead Management Committee

has implemented several new initiatives across the mining lease.

Children from the Yallambee Reserve eat a healthy breakfast at the Brilla Brilla Community Centre as part of the Breakfast Program sponsored by Xstrata Mount Isa Mines


The table below indicates where to locate information relating to GRI G3 indicators and principles

in this report or other publications.

IndicatorReporting Level Location

Strategy & analysis

1.1 Chief Executive’s message, p.2,3

1.2 Chief Operating Officer’s message, p.4,5

Organisational Profile

2.1 Xstrata Copper at a glance, Inside front cover

2.2 Xstrata Copper North Queensland, p.1



2.5 Xstrata Copper North Queensland, p.1

2.6 n/a –

2.7 Operations & economic contribution, p.10,11


2.9 Chief Operating Officer’s message, p.4,5

2.10 Operations & economic contribution, p.6

Report Parameters

3.1 Scope of this report, Inside front cover




3.5 Our approach to sustainable development, p.6,7



3.8 n/a –


3.10 n/a –

3.11 n/a –

3.12 GRI Index, p.44


Governance, Commitments and Engagement

4.1 Governance & management systems, p.8,9

4.2 n/a Refer to Xplc 2007 Sustainability Report

4.3 n/a

4.4 n/a

4.5 n/a

4.6 n/a

4.7 n/a




4.11 Our approach to sustainable development, p.7




4.14 Caring for our community, p.39




Economic indicators

EC1 Operations & economic contribution, p.11

EC2 Not reported

EC3 Not reported

EC4 n/a –

EC5 Not reported





MM1 Operations & economic contribution, p.11

MM2 Not reported

Environmental indicators

EN1 Caring for our environment, p.27


EN3 Caring for our environment, p.27,28









EN12 n/a –

EN13 n/a –




EN17 n/a –


EN19 n/a –

EN20 Caring for our environment, p.27,28,30,31,32,33

EN21 Caring for our environment, p.27,29,33,34,35


EN23 Caring for our environment, p.26,27,34


EN25 n/a –

EN26 Caring for our environment, p.26–35

EN27 n/a –



EN30 Not reported

MM3 Caring for our environment, p.30

MM4 Caring for our environment, p.26,27

MM5 n/a Refer to Xplc 2007 Sustainability Report

MM6 Caring for our environment, p.33,34


Labour Practices and Decent Work

LA1 Caring for our people, p.23,24

LA2 Caring for our people, p.23

LA3 Not reported




LA7 Caring for our people, p.17,18

LA8 Caring for our people, p.18,23,24,25

LA9 Not reported


LA11 Caring for our people, p.23,24,25



LA14 Not reported

MM12 Caring for our people, p.16,17,18,19

MM13 Caring for our people, p.18

Human Rights

HR1 n/a Refer to XCu North Queensland Division 2007 Sustainability Report

HR2 Governance & management systems, p.8

HR3 Not reported

HR4 Governance & management systems, p.9,25

HR5 Caring for our people, p.25


HR7


HR9 Caring for our community, p.33

Society

SO1 Caring for our community, p.36,37,38

SO2 Governance & management systems, p.9

S03

S04

SO5

SO6

SO7 n/a –

SO8 n/a –

MM7 Caring for our community, p.42

MM8 n/a –

MM9 n/a –

MM10 Caring for our environment, p.34

MM11 Caring for our community, p.37

Product Responsibility

PR1 n/a –

PR2 n/a –

PR3 n/a –

PR4 n/a –

PR5 n/a –

PR6 n/a –

PR7 n/a –

PR8 n/a –

PR9 n/a –

GRI index

fully reported partially reported not reported n/a = not applicable

SuSTAINABILITy REPORT 2007 C

Glossary

AQC – Air Quality Control centreThe centre monitors sulphur dioxide emissions and weather conditions and directs the operations of the Mount Isa Mines smelters to control sulphur dioxide concentrations within license limits.

BiodiversityAn abbreviation of “biological diversity” that means the variability among living organisms from all sources, including land based and aquatic ecosystems of which they are a part. These include diversity within species, and of ecosystems.

CASCommunity Attitude Survey.

Completion PlanA formal document detailing a costed conceptual outline of how the operation will be completed, taking into account the options available to deal with prevailing social and environmental issues.

CSICorporate Social Involvement programs.

DI – Disabling InjuryCalculated as lost time injuries plus restricted work injuries (LTI + RWI).

DIFR – Disabling Injury Frequency RateDisabling injury frequency rate = DI x 1,000,000/hours worked.

DISR – Disabling Injury Severity RateDisabling injury severity rate = (LTI days lost + RWI days lost) x 1,000,000/hours worked

DME Department of Mines and Energy.

DPM – Diesel Particulate MatterConsisting of small particles that aggregate to form chains to make larger particles which are usually less than one micron.

EEOEqual Employment Opportunities.

EMSEnvironmental Management Systems.

EPAEnvironmental Protection Agency.

EPP air goalMaximum levels for air quality indicators to be progressively achieved as part of achieving overall Environmental Protection Policy objectives.

FatalityA death resulting from an occupational injury or disease/illness and identified within the reporting period.

GjGigajoules (a thousand million joules).

GHG – Greenhouse gasesAny gas that absorbs infra-red radiation in the atmosphere, causing the warming of the earth’s atmosphere.

GRIGlobal Reporting Initiative.

HSECHealth, safety, environment and community.

ICUNInternational union for the Conservation of Nature and Natural Resources.

IEEItron Enterprise Edition.

ISOInternational Standardisation Organisation.

ISO14001The International Standardisation Organisation’s standard for environmental management systems.

JSAJob Safety Analysis.

kWKilowatt (1 kilowatt = 100,000 watts).

LDP Xstrata Leadership Development Program.

LTI – Lost Time InjuryAn occupational injury or disease that results in days away from work on any rostered shift subsequent to that on which the injury occurred. A fatality is also recorded as an LTI.

LTIFR – Lost Time Injury Frequency RateLost time injury frequency Rate = LTI x 1,000,000/hours worked.

MLMegalitres (1 megalitre = 1,000,000 litres or 1,000 kilolitres).

MWMegawatts (1 megawatt = 1,000,000 watts or 1,000 kilowatts).

µg/dlMicrograms per decilitre.

µg/m2/dayMicrograms per square metre per day.

NOHSECNational Occupational Health and Safety Commission.

Particulate emissionsControlled discharges from stacks containing microscopic solids in the form of dust or smoke.

PASSPositive Attitude Safety System.

PM10Particulate matter less than 10 microns in size.

Raw wateruntreated water extracted from groundwater, dams or rivers.

Recycled waterRecycled water is water:■ that has been used at least once in a process

within the operation or at another operation; and

■ that would otherwise be part of a waste stream; and

■ if not re-used, would require the input of raw water.

RehabilitationIn this report, rehabilitation is defined as disturbed areas that have been prepared for rehabilitation and seeded.

RWI – Restricted Work InjuryAn occupational injury or disease that results in a person being physically or mentally unable to perform all or any part of his/her normal assignment during any rostered shift subsequent to that on which the event occurred.

Tailings and tailings damsThe fine fraction of waste rock remaining after the mining and on-site processing of mineral resources. This consists of finely ground particles and traces of process reagents and chemical residues. Tailings are piped into engineered impoundments known as tailings dams, which are developed, operated, monitored and maintained to prevent seepage and water contamination both during and after mining operations.

TEOMsTapered Element Oscillating Microbalances.

TRI – Total Recordable InjuriesA measure that includes:■ lost time injuries (including fatalities);■ restricted work injuries (RWI); and■ medical treatment injuries (MTI).

TRIFR – Total Recordable Injury Frequency RateTotal recordable injury frequency rate = (LTI + RWI + MTI) x 1,000,000/hours worked.

XCPP NQXstrata Community Partnership Program North Queensland.

Designed and produced with D10 Creative (www.d10.com.au).

ecoStar is an environmentally responsible 100% recycled paper made from 100% post-consumer waste, bleached chlorine free (PCF) and is independently, 3rd party CoC certified. The mill operates under the ISO 14001 Environmental Management System which guarantees continuous improvement and is PEFC certified for traceability.

XST0932B 03/08

Xstrata Queensland Limited ABN 69 009 814 019

GPO Box 1433 Brisbane Queensland Australia 4001 Tel +61 7 3295 7500 Fax +61 7 3295 7640

Mount Isa Mines Limited ABN: 87 009 661 447

Private Mail Bag 6 Mount Isa

Queensland 4825 Australia

Tel +61 7 4744 2011 Fax +61 7 4744 3731

Ernest Henry Mining Pty Ltd ABN: 18 008 495 574

PO Box 527 Cloncurry


Tel +61 7 4769 4500 Fax +61 7 4769 4555

Copper Refineries Pty Ltd ABN: 12 009 676 975

PO Box 5484 Townsville


Tel +61 7 4781 8211 Fax +61 7 4778 2308

www.xstrata.com

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