Contents. Front cover: Amy McKenzie and Andrew Wannan from Cadia Valley Operations conducting water sampling at Rodds Creek.

Transcription

1 NEWCREST MINING LIMITED SUSTAINABILITY REPORT 2013

2 Contents A Letter from Newcrest s CEO 1 About this Report 2 International Council for Mining and Metals Sustainable Development Principles 6 About Newcrest Mining 8 Living our values 10 Performing at our best 11 Sharing our success 13 Our Stakeholder Engagement 14 Our Materiality Approach 16 Recognition 17 Newcrest Living Our Values Awards 17 Lihir awarded Best Team Overall at PNG Mine Emergency Response Challenge 17 Newcrest receives Randstad Award 17 Governance 18 Conducting business transparently 20 Changes in government regulation 20 Promoting government capacity 20 Our Economic Responsibilities 21 Market conditions and economic performance 22 Sharing of economic benefits 23 Our Environmental Responsibilities 24 Waste management 27 Water management 29 Our Social Responsibilities 31 Investing in our communities 32 Respecting human rights 35 Our Employee Responsibilities 37 Health and safety of our people 38 Employing and developing a local and diverse workforce 41 Operations 45 Cadia Valley Operations 46 Telfer 48 Lihir Operations 49 Hidden Valley 51 Gosowong 52 Bonikro 53 Projects 55 Wafi-Golpu 56 Namosi 56 Exploration 58 Assurance Statement 59 Corporate Directory IBC Front cover: Amy McKenzie and Andrew Wannan from Cadia Valley Operations conducting water sampling at Rodds Creek.

3 A Letter from Newcrest s CEO Newcrest s strategic objectives are relatively simple focus on gold, finding resources, building and operating mines, processing ore and then selling it to deliver value to our shareholders and our stakeholders. However, it would not be possible for us to explore, build and operate our mines without the support of governments and the communities that surround our mines. Newcrest has worked hard to develop strong and positive relationships with all interest groups around our mines. We pride ourselves on being patient, listening to the people in our communities and sharing the journey of developing and operating our mines. If we were to rush the exploration and development, we could damage relationships and create unnecessary resistance. It is important to us that our communities understand the nature of the mine, how it will impact them and how we can work together to achieve an outcome that benefits all parties. The process of engaging with stakeholders has become increasingly complex. Access to instant information and communication means that Newcrest not only engages face to face with our communities, but also addresses a variety of information mediums to ensure even the most remote stakeholders have factual information about the mine in their area. Tragically, during the year, we had a fatality at one of our sites 1. A man working for one of our contractors was fatally injured in a mobile equipment accident at our Lihir site. Our thoughts and support remain with his family. We responded by increasing our continuing focus on the improvement of a mobile equipment safety program; an area that continues to suffer serious potential incidents across the mining industry. Incidents like this remind all of us of the potential dangers of mining operations and the importance of continuing to focus on our health and safety. Newcrest continues to identify and implement the next step change required in our management of health and safety to further reduce injuries and fatalities. It will again be a major focus for the business in the coming year. Across the Company, action was taken to reposition Newcrest for a lower gold price environment. Extraordinary effort was demanded from our employees during this period. Another key challenge for Newcrest and the sector as a whole is to continue to develop and improve the scientific processes underlying our mining activities. We need to continually improve our understanding of the impacts of mining activity on the environment. These areas include water management, emissions and managing waste generated by mining operations, including tailings. The year ahead will undoubtedly present Newcrest with a range of risks and opportunities. Sustainability will continue to be at the forefront of everything we do, particularly considering that the next generation of mines will probably be in developing countries, remote areas with associated workforce, community and infrastructure challenges. Successful stakeholder engagement in the years ahead will be more crucial to our business than ever. Reflecting the importance of sustainability to Newcrest, during the year, a new role was created on the Company s Executive Committee, that of Executive General Manager Sustainability and External Affairs. Establishment of this role ensures that sustainability is represented at the highest levels of the organisation and the work of our practitioners at our operating sites is well supported. Finally, this will be my last contribution as Managing Director and Chief Executive Officer to Newcrest s Sustainability Report. During my tenure at Newcrest, the stewardship of Newcrest s licence to operate has been a critical consideration in all of the decisions we have made. My successor, Mr Sandeep Biswas, has an equally passionate drive to continue our vision as the Miner of choice for all of our stakeholders. Greg Robinson Managing Director and Chief Executive Officer 1 On 4 December 2013, following the reporting period, a contractor employee was fatally injured at Telfer gold mine, while undertaking civil works at the tailings storage facility. NEWCREST MINING SUSTAINABILITY REPORT

4 About this Report For the twelfth consecutive year, we are proud to present Newcrest Mining Limited s Sustainability Report. It is intended to inform our stakeholders of our environmental, social and economic management and performance. 2 NEWCREST MINING SUSTAINABILITY REPORT 2013

5 This Report covers all of Newcrest s activities globally, including activities undertaken in joint venture, for the period 1 July 2012 to 30 June This is our twelfth sustainability report and our tenth year using the Global Reporting Initiative (GRI) framework, whereby we annually report against all core and material GRI indicators. This information is available in our GRI G3 Content Index and GRI Data Tables, which this year are accompanying documents to the 2013 Sustainability Report, together with our Disclosures on Management Approaches, which describe our approaches to managing different aspects of our business. These documents are located on the Newcrest website at and may be accessed via the quick response (QR) code provided. We have continued our focus on material issues this year to provide a concise and relevant account of our sustainability performance. As such, this Report is structured according to the issues considered to be most material to the sustainability of our business. To supplement the whole of company account of sustainability performance provided in this Report, we have also provided short summaries of the material issues facing individual operating sites and exploration projects (from page 19), including: About this Report Australia Telfer, comprising Telfer Open Pit and Telfer Underground mines (Western Australia); and Cadia Valley Operations (CVO), comprising the Cadia Hill Open Pit, Ridgeway Underground and Cadia East Underground mines (New South Wales). Papua New Guinea (PNG) Lihir Operations (or Lihir) (New Ireland Province); and Hidden Valley (HV) Mine (Morobe Province) 2. Indonesia Gosowong, comprising the Kencana underground, Gosowong Open Pit and Toguraci Underground mines (Halmahera Island, North Maluku) 3. Côte d Ivoire Bonikro Open Pit Mine (Central Southern Province) 4. In addition, this Report covers Newcrest s major advanced exploration activities, including: Exploration Projects Wafi-Golpu (Papua New Guinea) 5 ; and Namosi (Fiji) 6. Newcrest also maintains a strong pipeline of brownfields and greenfields exploration projects in Australia, Papua New Guinea, Indonesia, Fiji and Côte d Ivoire. Data from brownfields exploration is included in this Report (see Exploration section). Exploration projects have been turned over relatively quickly during the reporting period, with decisions made during the year to exit the Tandai Joint Venture (Sumatra) and the Mt Andewa Project (Papua New Guinea). We have not included greenfields exploration data (as there are many projects in many locations) other than for designated exploration projects, Wafi-Golpu and Namosi. Currency figures are reported in Australian dollars unless otherwise stated. Where appropriate, the equivalent in US dollars (US$), Papua New Guinea Kina (PGK), Indonesian Rupiah (IDR) or Côte d Ivoire Francs (CFA) is provided. The basis for currency conversion in this Report is A$1 = US$0.9275, A$1 = PGK, A$1 = 9,208 IDR and A$1 = CFA. We have sought independent assurance of the Report content. Additionally, the assurance process confirmed that this Report meets the requirements of GRI Application Level A+. For any comments or enquiries about this Report or our sustainability reporting process, please sustainabilityfeedback@newcrest.com.au or complete the feedback form on our website ( Note: All sites are 100 percent Newcrest owned unless otherwise specified. 2 Owned by the Hidden Valley Joint Venture (HVJV), one of three unincorporated joint ventures in the Morobe Province of Papua New Guinea between subsidiaries of Newcrest (50 percent) and Harmony Gold Mining Company Limited of South Africa (50 percent), collectively described as the Morobe Mining Joint Ventures (MMJV). 3 Owned and operated by PT Nusa Halmahera Minerals (an incorporated joint venture company between Newcrest (75 percent) and PT Aneka Tambang (25 percent)). 4 Owned and operated by LGL Mines CI SA, an Ivoirian company in which Newcrest holds percent, following the acquisition of Lihir Gold Limited (LGL) in August Minority interests are held by the Cote d Ivoire Government (10 percent) and the residual interest is held by a minority shareholder. 5 Owned by the Wafi-Golpu Joint Venture (WGJV), one of the three unincorporated joint ventures in the Morobe Province of Papua New Guinea between subsidiaries of Newcrest (50 percent) and Harmony Gold Mining Company Limited of South Africa (50 percent), collectively described as the Morobe Mining Joint Ventures (MMJV). 6 Operated by Newcrest and owned by an unincorporated joint venture between Newcrest (69.94 percent) and Nittetsu Mining Company Limited and Mitsubishi Materials Corporation of Japan. NEWCREST MINING SUSTAINABILITY REPORT

6 About this Report continued Report application level C C+ B B+ A A+ G3 profile disclosures Output Report on: , , Report on all criteria listed for level C plus: , , Same as requirement for level B Standard disclosures G3 management approach disclosures Output Not required Report externally assured Management approach disclosures for each indicator category Report externally assured Management approach disclosures for each indicator category Report externally assured G3 performance indicators and sector supplement performance indicators Output Report on a minimum of 10 performance indicators, including at least one from each of: Economic, Social and Environmental Report on a minimum of 20 performance at least one from each of Economic, Environmental, Human Rights, Labor, Society, Product Responsibility Report of each core G3 and sector supplement indicator with due regard to the materiality principle by either: a) reporting on the indicator or b) explaining the reason for its omission Restatements Minor changes have been made to data that was reported in last year s Sustainability Report. These include: The total community expenditure at Namosi during FY2012. The total payments to suppliers for each site during FY2011 and FY2012. Payments were initially reported as expensed costs, but have been revised as total outgoings (including capital expenditure). The amount of ore processed reported for Gosowong, which was incorrectly stated in and as 592,251kt and 721,770kt respectively. This resulted in revised values for Gosowong in and as 592kt and 722kt respectively, with revised Company values of 59,939kt and 54,097kt, respectively. Forward Looking Statements This report includes forward looking statements. Often, but not always, forward looking statements can generally be identified by the use of forward looking words such as may, will, expect, intend, plan, estimate, anticipate, continue, and guidance, or other similar words and may include, without limitation, statements regarding plans, strategies and objectives of management, anticipated production or construction commencement dates and expected costs or production outputs. Forward looking statements inherently involve known and unknown risks, uncertainties and other factors that may cause the Company s actual results, performance and achievements to differ materially from any future results, performance or achievements. Relevant factors may include, but are not limited to, changes in commodity prices, foreign exchange fluctuations and general economic conditions, increased costs and demand for production inputs, the speculative nature of exploration and project development, including the risks of obtaining necessary licenses and permits and diminishing quantities or grades of reserves, political and social risks, changes to the regulatory framework within which the Company operates or may in the future operate, environmental conditions including extreme weather conditions, recruitment and retention of personnel, industrial relations issues and litigation. 4 NEWCREST MINING SUSTAINABILITY REPORT 2013

7 Forward looking statements are based on the Company and its management s good faith assumptions relating to the financial, market, regulatory and other relevant environments that will exist and affect the Company s business and operations in the future. The Company does not give any assurance that the assumptions on which forward looking statements are based will prove to be correct, or that the Company s business or operations will not be affected in any material manner by these or other factors not foreseen or foreseeable by the Company or management or beyond the Company s control. Although the Company attempts and has attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in forward looking statements, there may be other factors that could cause actual results, performance, achievements or events not to be as anticipated, estimated or intended, and many events are beyond the reasonable control of the Company. Accordingly, readers are cautioned not to place undue reliance on forward looking statements. Forward looking statements in these materials speak only at the date of issue. Subject to any continuing obligations under applicable law or any relevant stock exchange listing rules, in providing this information the Company does not undertake any obligation to publicly update or revise any of the forward looking statements or to advise of any change in events, conditions or circumstances on which any such statement is based. About this Report Ore Reserves and Mineral Resources Reporting Requirements As an Australian company with securities listed on the Australian Securities Exchange ( ASX ), Newcrest is subject to Australian disclosure requirements and standards, including the requirements of the Corporations Act and the ASX Listing Rules. Investors should note that it is a requirement of the ASX Listing Rules that the reporting of Ore Reserves and Mineral Resources in Australia comply with the JORC Code 2012 and that Newcrest s Ore Reserve and Mineral Resource estimates comply with the JORC Code Subsequent to the reporting period, Newcrest ceased its listing on the Toronto Stock Exchange ( TSX ) on 4 September 2013, but will remain subject to certain Canadian disclosure requirements and standards until it ceases to be an Ontario Securities Commission registrant. Prior to that, Newcrest will continue, in accordance with the requirements of NI , to report its Ore Reserves and Mineral Resources estimates in compliance with the JORC Code 2012, along with a reconciliation to the material differences between the JORC Code 2012 and the applicable definitions adopted by the Canadian Institute of Mining, Metallurgy and Petroleum (CIM Definition Standards). In relation to the December 2013 Resources and Reserves Statement, the reconciliation is set out in Newcrest s Canadian News Release dated 14 February 2014, and is available at and at Newcrest s website Except as otherwise noted in that document, there are no material differences between the definitions of Measured, Indicated and Inferred Mineral Resources, and Proven and Probable Reserves, under the CIM Definition Standards and the equivalent or corresponding definitions in the JORC Code The Explanatory Notes for the Annual Mineral Resource and Ore Reserve Statement 31 December 2013 containing more detailed information on the methods and parameters used to estimate Mineral Resources and Ore Reserves are available on the Newcrest website at and lodged with the ASX. Competent Person s Statement The information in this report that relates to Mineral Resources and Ore Reserves is based on information compiled by Mr C. Moorhead. Mr Moorhead is the Executive General Manager Minerals and a full-time employee of Newcrest Mining Limited. He is a shareholder in Newcrest Mining Limited and is entitled to participate in Newcrest s executive equity long term incentive plan, details of which are included in Newcrest s 2013 Remuneration Report. Ore Reserves growth is one of the performance measures under that plan. He is a Fellow of The Australasian Institute of Mining and Metallurgy. Mr Moorhead has sufficient experience which is relevant to the styles of mineralisation and types of deposits under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in The JORC Code 2012 and is a Qualified Person within the meaning of National Instrument Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators ( NI ). Mr Moorhead consents to the inclusion in this report of the matters based on his information in the form and context in which it appears. NEWCREST MINING SUSTAINABILITY REPORT

8 International Council for Mining and Metals Sustainable Development Principles Newcrest is a member of the Minerals Council of Australia (MCA), and in May 2005 became a signatory to Enduring Value the Australian Mining Industry Framework for Sustainable Development. Enduring Value adopts the International Council on Mining and Metals (ICMM) Framework for Sustainable Development and provides implementation guidance in an Australian and international context. Commitment to Enduring Value involves: progressive implementation of the ICMM Principles and Elements; public reporting of site-level performance at least once a year, with reporting metrics self-selected from the Global Reporting Initiative (GRI), the GRI Mining and Metals Sector Supplement or self-developed; and assessment of the systems used to manage key operational risks. Newcrest is aligning its sustainability approach to the ICMM principles. The ICMM principles are also subject to periodic review and updating. 6 NEWCREST MINING SUSTAINABILITY REPORT 2013

9 The following table provides an update of Newcrest s sustainable development approach. Table 1: Newcrest s alignment to the ICMM Principles for FY2013 ICMM Principle Current Newcrest alignment 1. Implement and maintain ethical business practices and sound systems of corporate governance. 2. Integrate sustainable development considerations within the corporate decision-making process. 3. Uphold fundamental human rights and respect cultures, customs and values in dealings with employees and others who are affected by our activities. 4. Implement risk management strategies based on valid data and sound science. 5. Seek continual improvement of our health and safety performance. 6. Seek continual improvement of our environmental performance. 7. Contribute to conservation of biodiversity and integrated approaches to land use planning. 8. Facilitate and encourage responsible product design, use, re-use, recycling and disposal of our products. 9. Contribute to the social, economic and institutional development of the communities in which we operate. 10. Implement effective and transparent engagement, communication and independently verified reporting arrangements with our stakeholders. Ethical business practice is a key part of Newcrest s policies and practices. During the reporting period, we finalised the revision of the Code of Conduct and commenced training to roll out the updated Code of Conduct to all Newcrest employees and business partners. The Code of Conduct is binding for all Newcrest employees. Details of Newcrest s corporate governance statement and structure are provided in our 2013 Annual Report. Sustainable development considerations are fully integrated as part of the Company s processes for project studies and investment decisions. While the Newcrest Board has ultimate accountability for our sustainability agenda, sustainable development matters are considered by a sub-set of the Newcrest Board, our Safety and Sustainability Committee 7. A dedicated position, Executive General Manager Sustainability and External Affairs, was created during the reporting period. This role has a specific mandate and responsibility for developing and implementing Newcrest s sustainability program, and driving this more broadly across the organisation. Sustainable Development principles can be found in our Health and Safety, Environmental and Community Policies. Our commitment to this principle has been further enhanced by the development of new policies for Human Rights and Security, plus the amendment of our existing Communities Policy to emphasise our respect for Indigenous Peoples and need for effective community engagement. As these polices are implemented, other existing policies, such as Code of Conduct and Diversity, will also be regularly reviewed to ensure that there is consistency across our policies and clear understanding of our commitment and compliance requirements. Our Risk Management Framework is used to identify and evaluate risk events and establish controls and mitigation strategies. Risks considered in the process include strategic, corporate and commercial, major hazards (including operational, health and safety, and environmental) and project management risks (see our Annual Report 2013). Our Health and Safety Policy includes a commitment to continual improvement. This year, we have worked on the implementation of our Group-wide management system and standards, and continued improvements within our CHESS 8 system. These guide our practice through consistent standards across the organisation and enables reporting and monitoring of performance and trends. Our commitment to continual improvement is set in our Environmental Policy. In the reporting period, we reviewed our environmental standards, worked on the implementation of our integrated CHESS system and developed a program to improve our monitoring of new and existing internal and external commitments and legal requirements (Integrated Planning and Permitting project). Lihir Gold Mine maintained compliance with ISO Our Environmental Policy includes a commitment to the conservation of biodiversity and integrated approaches to land use planning. We implement mitigation and management measures to protect flora and fauna of high biodiversity value at our operations and advanced exploration projects. We remain members of the Business and Biodiversity Offsets Programme and actively participate in the Minerals Council of Australia Land Working Group to improve industry performance in land use planning and biodiversity management. As our products are not directly sold on the retail market, our approach is primarily around managing potential impacts on the environment throughout the life cycle of our mining operations. Certification to the International Cyanide Management Code at Gosowong Mine is an illustration of our approach to product stewardship. Newcrest is a member of the Minerals Council of Australia Product Stewardship Committee. We make significant contributions for the social and economic development in the areas we operate. Our approach to managing our social responsibilities is underpinned by our corporate framework, specifically our Community Policy and Community Standards. Increasingly our focus is to work with communities to prepare them for the post-mining scenario by establishing non-mine dependent economic activities to assist in sustaining the communities post-mining. Our engagement with stakeholders is driven at the highest level by two of Newcrest s core company values: Working Together and Caring About People. As we have grown from a largely Australia-based business to a multi-country, culturally diverse and highly visible company, we have expanded the range and depth of stakeholders we need to communicate with. Depending on the circumstances, our relationships are managed by individual Newcrest personnel, teams or departments, with methods of engagement differing from formal to informal processes as appropriate (see Our Stakeholder Engagement). International Council for Mining and Metals Sustainable Development Principles 7 The Safety, Health and Environment Committee was renamed the Safety and Sustainability Committee on 12 February CHESS (Community, Health, Environment and Safety System) is the Newcrest system for recording and managing Health, Safety, Environment and Community (HSEC) data. It provides improved functionality for incident reporting, investigations and trend analysis, with more comprehensive statistics and information for management use. NEWCREST MINING SUSTAINABILITY REPORT

10 About Newcrest Mining Newcrest is the largest gold producer listed on the Australian Securities Exchange and one of the world s largest gold mining companies by gold reserves and market capitalisation. Newcrest s vision is to be the Miner of choice for all stakeholders. 8 NEWCREST MINING SUSTAINABILITY REPORT 2013

11 Asset locations and ownership percentage % Gosowong Indonesia 75 % Hidden Valley Papua New Guinea 100 % About Newcrest Mining 100 % 50% % 100 % Bonikro Côte d Ivoire Telfer Australia Cadia Valley Australia Wafi-Golpu Papua New Guinea Lihir Papua New Guinea Namosi Fiji Newcrest is an unhedged gold producer that owns and operates a portfolio of predominantly low-cost, long-life mines in Australia, the Pacific region, Asia and Africa, and maintains a strong pipeline of brownfields and greenfields exploration projects. Our reserve and resource base is strong, with gold reserves representing more than 25 years of production at current rates 9. In addition to gold, Newcrest produces copper and silver as by-products. Newcrest has strong technical capabilities in deep underground block caving, shallow targeted underground mines, large open pits and a variety of metallurgical processing skills. Newcrest is headquartered in Melbourne, Australia. As at 30 June 2013, Newcrest had a market capitalisation of approximately A$7.5 billion and had a workforce of over 17,000 people across Australia, the Pacific region, Asia and Africa 10. FY2013 was a challenging year for Newcrest. This was highlighted by a significant and rapid decline in the gold price in the final quarter of the financial year This decline triggered major adjustments to business and operating plans by gold producers around the world. Newcrest also had lower than expected production over the course of the reporting period, which further impacted our performance. Additional information about the Company s FY2013 financial performance can be found in Newcrest s Annual Report 2013, available at 9 For updated Mineral Resources and Ore Reserves estimates as at 31 December 2013, refer to the Australian Securities Exchange (ASX) at or visit the Newcrest website. 10 As at 31 March 2014, the Company s workforce was approximately 9,200. The reduction in the workforce as against 30 June 2013 reflects the completion of the Company s two major development projects (in Cadia East Panel Cave 1 and Lihir Plant Expansion, referred to elsewhere in this Report) and changes implemented by the Company to simplify activities across all of its sites in the context of the continuing commodity price volatility and lower gold price environment. NEWCREST MINING SUSTAINABILITY REPORT

12 About Newcrest Mining continued Living our values Our vision is to be the Miner of choice and we recognise that maintaining strong relationships with all our stakeholders is critical to that vision. The need to gain and maintain the trust and support of all our stakeholders is critical to the continued success of Newcrest maintaining and extending a licence to operate. Figure 1: Newcrest vision and values We work together We care about people We act with integrity and honesty We value innovation and problem solving We seek high performance in ourselves and others Our Company s values underpin our actions, guiding the way we work and behave every day. They include working with and caring for others, acting with integrity and honesty, valuing innovation and encouraging the best in ourselves and others 11. Our Code of Conduct 12 encompasses these values and is enacted through our policies and standards that govern how we behave. Our comprehensive range of policies touches all parts of our operation and can be found on the Newcrest website at Living our values: Safety ReNew town hall meetings at Lihir. 11 Our values are detailed on the Newcrest website at 12 The Code of Conduct is available online at 10 NEWCREST MINING SUSTAINABILITY REPORT 2013

13 Performing at our best A core component underpinning our growth, profitability and future viability as a business is effective planning. A robust planning process is central to our ability to systematically identify, evaluate, define and deliver the potential of our assets. Newcrest s planning process provides a framework to implement our higher level strategy and helps us derive maximum value from our assets by assigning clear accountabilities. Figure 2: Planning process drives performance Newcrest planning cycle Activities Strategy 5-year plan Budget Key performance indicators About Newcrest Mining Outcomes Value creation Action plans Deliverables Alignment Gold sector review Life of province analysis Range analysis Capital management Risk management Resourcing Operating metrics Financial metrics Market guidance Group KPIs Site KPIs Team KPIs Individual KPIs Measuring performance daily, weekly, monthly Planning derives maximum value from the asset base and assigns clear accountabilities. Our management metrics are aligned to achieving our organisational goals and are also reflected in our performance incentives. These are detailed in the Remuneration Report within the 2013 Annual Report ( NEWCREST MINING SUSTAINABILITY REPORT

14 About Newcrest Mining continued Table 2: Newcrest s FY2013 performance targets and progress as at 30 June 2013 Area Target Progress Comment Environment Newcrest environmental standards revised and supporting guidelines developed Safety and health Social/ Community Employees diversity Closure plans standardised across the Company Cyanide Code certification program implementation to continue Total Recordable Environmental Incident Frequency Rate <1.7 Total Recordable Injury Frequency Rate < 3.0 Safety ReNew program developed and implemented to schedule Priority Group Hazard Controls revised and supporting materials developed and implemented to schedule Malaria management program developed and implemented to schedule Newcrest Communities Standards developed Major Community Benefits Agreements progressed Community of Practice developed for community relations practitioners Increase the proportion of women selected for the graduate program from 25% at December 2010 to 33.3% at 31 December 2013 That 33% of succession plans for all Level 2 to Level 5 roles will have at least one female included by 31 December 2013 Establish a Diversity sub-committee to provide oversight and report bi-annually to the Executive Committee (ExCo) and the Board on the Company s diversity initiatives and programs Environment standards reviewed during the reporting period and updated to align with advances in global environmental practices. Work ongoing on supporting guidelines and roll-out to sites to implement the standards. Status of closure plans at each operation reviewed to support update of the Closure Standard. Progressive development and update of plans is ongoing for each site to meet regulatory requirements in consideration of stakeholder expectations. As a signatory to the Cyanide Code Newcrest remains committed to progressive certification of our sites. An interim recertification review was conducted at Gosowong and substantial work towards compliance was implemented at Hidden Valley. The intention for Bonikro to be certified within the current two-year period was withdrawn during the reporting period pending a review of business timeframes for this activity. There is an ongoing focus on recording and reporting of environmental incidents to learn from events and continually improve performance. The TRIFR increased from 3.5 in FY2012 to 3.6 in FY2013 after a strong downward trend in previous years. Newcrest continues to focus on improving the health and safety of its employees and contractors. Safety ReNew continues into FY2014 as an integral safety and health strategy, providing our employees with the appropriate tools, effective leadership and behavioural traits to encourage safe working practice. In FY2014, this target will be replaced with Implement Major Hazard Program to schedule. Through the partnership with Medicines for Malaria Venture an entomologist visited our sites to conduct reviews of our sites against implementation of malaria management plan controls. All eight Standards have been endorsed by the Board and promulgated across the Company. There are two community agreements currently underway. The first is the Lihir Integrated Benefits Package review with the people of Lihir and the second is a comprehensive agreement with Martu peoples of the western desert in Western Australia. Solid progress has been made on both agreements, with appropriate time being taken to ensure the agreements achieve their stated objectives for all stakeholders. A Community of Practice is in place and has had two annual gatherings; there was no meeting in 2013 due to financial constraints but it is planned to revitalise the forum as soon as possible. Performance target on track 13. Completed. Target achieved in April Completed. The sub-committee was established in 2010 and meets quarterly. With the diversity sub-committee in place, a new measure for FY2013 was adopted by the Board to support Newcrest s commitment to increasing participation of women in manager roles. The new measure sought to increase the proportion of women in management Levels 2 4 by 15% by 31 December 2013 (below). Increase the proportion of women in management Performance target on track 13. Levels 2 4 by 15% by 31 December Reached In progress Not reached 13 Target achieved in December The final measure to increase the proportion of women in management Levels 2 4 by 15 percent by 31 December 2013 replaced the pre-existing measure, to establish a Diversity sub-committee. Levels 2 4 include senior professionals/supervisors (Level 2), managers (Level 3) and senior managers (Level 4). 12 NEWCREST MINING SUSTAINABILITY REPORT 2013

15 Sharing our success Newcrest s strategic framework focuses on the creation of shareholder value to ensure an economically sustainable business. In order for our stakeholders to benefit, our operations must be profitable in order to provide stability for our employees, stakeholders and our business. Being profitable is directly related to our ability to contribute to economic growth and human development in the communities in which we operate through generating employment, contributing to physical infrastructure, such as health and education facilities, and wherever possible providing for economic participation in our business by community businesses. About Newcrest Mining Telfer employee. NEWCREST MINING SUSTAINABILITY REPORT

16 Our Stakeholder Engagement We seek active, inclusive engagement with our stakeholders, but also respect their wish to engage with us on their terms. Depending on the circumstances, our relationships are managed by individual Newcrest personnel, teams or departments, with methods of engagement differing as appropriate from one stakeholder group to the next. Formal and informal processes are employed to maintain relationships, to keep stakeholders informed of relevant business activities and to stay abreast of stakeholder issues and concerns. Serious matters are brought back to our executive committee and/or management team through internal communication paths. In certain instances, we have established or engaged independent advisory panels or experts to assist with complex stakeholder matters. An illustration of our stakeholder groups, examples of key stakeholders and our stakeholder engagement processes are captured in the figure below. Figure 3: Our engagement with stakeholders Media Localised media National business media Education & research (site and country) Tertiary and vocational Civil society Research General public Local schools All NGOs NGOs Customers Smelters Refineries Mining and metals industry Business, professional associations Local country and regional business associations Industry Shareholders All shareholders Local, state and federal Executive Committee Management team Employees Contractors levels in all areas we operate Employees & contractors Government & regulators Landowners Indigenous communities Local suppliers Local residents Non-local suppliers Suppliers Local communities Examples of stakeholder approach Shareholders Annual General Meeting (also webcast) Market announcements Annual reports, quarterly production reports, half yearly financial reporting Investor days and company presentations Investor meetings and conference calls Website and Employees & contractors Employee briefings Intranet, , newsletters, social events, noticeboards, departmental site and toolbox meetings, internal audits and inspections, performance reviews Site General Manager town hall meetings Speak-out service Site-localised media stories Local communities Community relations team visits Resident/community meetings Site visits Regular communication with leaders and community generally, providing feedback forums Complaints and grievance mechanisms Sponsorships and partnerships Collaborative agreements Engagement of external, independent experts Media engagement on localised initiatives Community newsletters Websites Suppliers Collaborative guidelines Out to market approaches Open and collaborative face-to-face engagement and discussions Contractual agreements Government & regulators Open and collaborative face-to-face engagement Quarterly updates Annual reports, website and , compliance audits and inspections Direct engagement on matters of local importance Industry body involvement Media engagement on localised initiatives Industry Meetings, reports and discussions around the specific considerations of mining and considerations for policy Reports, face-to-face discussions, presentations, collaborative agreements Industry body focus groups e.g. NSW Mine Safety Representation on industry bodies NGOs Meetings, reports, face-to-face discussions Site visits Exploring collaborative opportunities Education & research Involvement on advisory boards Conference attendance Collaborations e.g. CRC Meetings, reports, face-to-face discussions Media Conference calls Day-to-day queries Site visits News stories/press releases Newcrest website Civil society Newcrest website Customers Meetings Reports Face-to-face discussions Site visits 14 NEWCREST MINING SUSTAINABILITY REPORT 2013

17 Newcrest is committed to working with governments, industries and other stakeholders to achieve appropriate and effective public policy, laws, regulations and procedures that facilitate the mining sector s contribution to sustainable development. To achieve these objectives, we work through a number of peak industry bodies in the jurisdictions in which we operate. Newcrest is affiliated with or a member of the following organisations: Australia Fiji Business Council; Australia Papua New Guinea Business Council; Australasian Investor Relations Association; Australian Mines and Metals Association; Australian Safety and Compensation Council; Bulolo Business Association (PNG); Business and Biodiversity Offsets Program (BBOP); Business Council of Australia (BCA); Chamber of Commerce and Industry of Côte d Ivoire; Chamber of Commerce of France in Côte d Ivoire; Chamber of Minerals and Energy of Western Australia; Copper Development Centre; Corporate Tax Association of Australia; Employers Federation of Papua New Guinea; Fiji Commerce and Employers Federation Mining and Quarrying Council; Indonesian Mining Council; International Cyanide Management Code; International Network for Acid Prevention (INAP); Lae Chamber of Commerce (PNG); Major Employers Association Confédération Géneralé des Enterprises de Côte d Ivoire (CGECI); Minerals Council of Australia (MCA); Mining Association Groupement des Professionels Miniers de Côte d Ivoire (GPMCI); New South Wales Minerals Council; Papua New Guinea Chamber of Mines and Petroleum; Sustainable Minerals Institute (SMI) University of Queensland; Suva Chamber of Commerce; The World Gold Council; Western Australian Chamber of Mines. Our Stakeholder Engagement Employee discussion, Telfer. NEWCREST MINING SUSTAINABILITY REPORT

18 Our Materiality Approach Our Sustainability Report focuses on the issues that were most material to our business over the past year. The process adopted to identify the most significant sustainability issues was as follows. The initial phase identified a range of potential issues across key areas, including social responsibility, health, safety and environment, in addition to finance, risk and assurance, and corporate governance. An initial list of issues was reviewed against the material issues reported for FY2012, followed by an in-depth assessment of new and emerging issues that occurred during the 2013 financial year. These issues were then refined, prioritised and debated, and grouped by relevance to our stakeholders and our business, or both. This initial stage enabled Newcrest to substantiate relevance when finalising the material issues for FY2013. The second phase engaged a broader group of internal stakeholders to revisit these initial issues. In addition to the functions represented during the initial phase, further involvement included leaders from external affairs, procurement, security, human resources and training, representing a wider range of interests based on experience and regular interaction with varying stakeholder groups. In total, 16 leaders were involved during the materiality process. Based on this process, the specific material issues covered in this Report are set out in the table below. Table 3: Our material issues Material issue Report section Page Conducting business transparently Governance 20 Changes in government regulation Governance 20 Promoting government capacity Governance 20 Market conditions and Our Economic Responsibilities 22 economic performance Waste management Our Environmental Responsibilities 27 Water management Our Environmental Responsibilities 29 Investing in our communities Our Social Responsibilities 32 Respecting human rights Our Social Responsibilities 35 Health and safety of our people Our Employee Responsibilities 38 Employing and developing a local and diverse workforce Our Employee Responsibilities 41 CSIRO sediment monitoring, Lihir. 16 NEWCREST MINING SUSTAINABILITY REPORT 2013

19 Recognition Newcrest Living Our Values Awards Newcrest s Living Our Values Awards are awarded annually to individuals or teams who demonstrate outstanding commitment to Newcrest s values. Awards are given for each of the five values: We care about people We work together We value innovation and problem-solving We seek high performance in ourselves and others We act with integrity and honesty. The 2013 LOV Awards winners were: Orla Lavin (Melbourne) We care about people Marslyn Saun and Lovelyn Teaku (Lihir) We work together Andrew Apfel (Cadia Valley Operations) and Innayatsyah Iskandar (Gosowong) We value innovation and problem-solving Warren Baldwin (Cotê d Ivoire) We seek high performance in ourselves and others Claire Stephens (Telfer) We act with integrity and honesty. Lihir awarded Best Team Overall at PNG Emergency Response Challenge Lihir s Emergency Response Team participated in the second PNG Mines Emergency Response Challenge in Port Moresby. Seven of the eight team members were Lihirians, including one female team member. Over two days, the Lihir team participated in rope rescue, fire fighting, search and rescue, and first aid scenarios. Their efforts were rewarded and recognised by the judges, resulting in winning five awards, including the prestigious Best Team Overall for the 2012 National PNG Mines Emergency Response Challenge. Lihir s Emergency Response Team was awarded: The Best Team Overall 2012 Best Fire Fighting Team Overall Best Hazchem Team Overall Best Captain Best Safety Song from the PNG Mines Safety Week for The Challenge is organised by the Mineral Resource Authority and is an initiative of the Chief Inspector of Mines, Mr Mohan Singh. During this event, all mining and oil and gas companies across PNG Mines came together to showcase their skills and capabilities in emergency rescue and response. Lihir Emergency Response Team with General Manager, Karl Spaleck (back row, second from left). Newcrest receives Randstad Award Newcrest was named Australia s Most Attractive Employer in the Mining and Resources Sector at the 2013 Randstad Awards for the second year in a row. Accepting the award, Newcrest s Senior Talent Business Partner acknowledged the Company s people and culture: Our people are our brand ambassadors they live our values every day, contributing to the strong culture we have at Newcrest. Debra Stirling, Executive General Manager People & Communications said the award demonstrated the strength of Newcrest s vision to be the Miner of choice : We believe in our people and ensure they are equipped and empowered to be their best. It s the people at Newcrest that set us apart. Randstad surveys around 7,000 people in Australia every year about their perceptions of the 150 largest companies. Award winners are selected from these results. NEWCREST MINING SUSTAINABILITY REPORT

20 Governance Adherence by the Company and its people to the highest standard of corporate governance is critical in order to achieve its vision to be the Miner of choice. The Company follows the recommendations for effective corporate governance as published by the Australian Securities Exchange (ASX) Corporate Governance Council and regularly reviews its governance and compliance practices. The Board of Directors sets the Company s strategic goals and objectives and oversees management and the performance of the Company s businesses on behalf of shareholders. This includes the responsibility of sustainability, which in turn is devolved to senior key people and, ultimately, their teams. The Board undertakes an annual review of its own performance and that of its committees and individual directors. This process, led by the Chairman and based on formal questionnaires and evaluations provided by Board members and senior managers, allows for regular improvements to be made to the functionality and performance of the Board and its associated Committees. External and community affairs are standing agenda items at each Board meeting. At 30 June 2013, the Newcrest Board comprises 11 directors. This includes Managing Director and CEO, Greg Robinson, and Finance Director and Chief Financial Officer, Gerard Bond. Greg Robinson and Gerard Bond are each executive directors. The remaining nine Board members, including the Chairman, are non-executive directors. They are considered independent in accordance with the Board s Independence Policy. Details of each director s skills, experience and relevant qualifications and expertise, as well as the term of office held as at 30 June 2013, are set out in the Newcrest 2013 Annual Report (pages 8 9), an interactive copy of which is available at Newcrest s website ( Subsequent to the reporting period, Chairman of the Board, Mr Don Mercer, retired on 31 December Mr Peter Hay was appointed Chairman on 1 January 2014 after being appointed as a Non-Executive Director on 8 August The functions of the Board are set out in a Board Charter. Charters also set out the roles and responsibilities for the Board committees. These Charters are regularly reviewed and revised where appropriate. Also subsequent to the reporting period, the Board operates four standing committees that provide a forum for more detailed analysis of key issues 15. The four Committees are Audit and Risk, Human Resources and Remuneration, Safety and Sustainability 16, and Nominations 17, each comprising a minimum of four members of the Newcrest Board of Directors, all of whom are non-executive directors. All directors receive meeting papers for each Committee and non-member directors are invited to attend Committee meetings. Details of these Committees, their Charters, functions and membership can be found on the Company s website. The Company s executives are subject to performance evaluations in accordance with Newcrest s Work Performance System. Details of the Company s performance appraisal system for executives and the performance management system for the reporting period are set out in the Remuneration Report in Newcrest s Annual Report. On 1 January 2014, Mr Sandeep Biswas joined Newcrest as Chief Operating Officer and Executive Director, reporting to Managing Director and Chief Executive Officer, Mr Greg Robinson. Mr Biswas will succeed Mr Robinson as Managing Director and Chief Executive Officer on 4 July The diagram on page 19 illustrates how sustainability is governed at key levels within our business as at 30 June The Board may also convene a Board Executive Committee, which holds the full delegated authority of the Board and is called upon on occasions when it is not possible or practicable for the full Board to convene. 16 The Safety, Health and Environment Committee was renamed the Safety and Sustainability Committee on 12 February The Nominations Committee was formed in April NEWCREST MINING SUSTAINABILITY REPORT 2013

21 Sustainability Governance within Newcrest 18 Board of Directors Board Committees (including Safety and Sustainability Committee*) Managing Director and Chief Executive Officer Executive Committee (ExCo) Governance Operations, Projects and Exploration Sustainability and External Affairs People and Communication Training Human Resources Corporate Affairs Social Responsibility Health and Environment Safety, Risk and Security Site-based Health and Safety, Security, Environment and Community personnel In March 2012, Newcrest became a member of the World Gold Council. As a member of the World Gold Council, Newcrest is committed to demonstrating that our gold has been extracted in a manner that does not cause, support or benefit unlawful armed conflict or contribute to serious human rights abuses or breaches of international humanitarian law (see the World Gold Council website at gold-mining/responsible-mining). Newcrest will publish its Conflict-Free Gold Report in line with the financial year reporting cycle and will seek the required external assurance of this report in FY2015. Other commitments and initiatives that demonstrate Newcrest s commitment to sustainability include: Improving transparency and consistency in reporting financial costs. Commencing from 30 June 2013, Newcrest has adopted the reporting of the World Gold Council-led All-In Sustaining Costs, which discloses our production costs to our stakeholders, including governments, investors and local communities. Subsequent to the reporting period on 23 December 2013, Newcrest became a supporting company of the Extractive Industries Transparency Initiative (EITI). Building and maintaining enduring relationships based on the recognition and respect for human rights. Newcrest has adopted new security and human rights policies and will be applying for membership to the Voluntary Principles on Security and Human Rights in FY2014. Operating in line with leading environmental practices. Newcrest is a signatory to the International Cyanide Management Code for the Management, Transport and Use of Cyanide in the Production of Gold (page 26). Operating in a manner consistent with international leading practices and norms. Aligning key business areas (including environmental, social and safety) with the International Council on Mining and Metals (ICMM) Sustainable Development Principles (pages 6 7). * The Safety, Health and Environment Committee was renamed the Safety and Sustainability Committee on 12 February The diagram represented is not of the entire Executive Committee but rather those areas with direct accountability for sustainable governance. NEWCREST MINING SUSTAINABILITY REPORT

22 Governance continued Conducting business transparently Conducting our business transparently and within adopted governance rules is a business priority as we seek to build enduring relationships with shareholders, investors, governments, communities and all other stakeholders. Internationally, the Extractive Industries Transparency Initiative (EITI) is a global coalition of governments, companies and civil society working together to improve openness and accountable management of revenues from natural resources 19. Newcrest has committed to becoming an EITI Supporting Company by the end of Notwithstanding this, Newcrest already conforms to EITI reporting in the EITI member countries in which we currently operate, being Indonesia and Cote d Ivoire. Another aspect of conducting our business transparently is in relation to bribery, corruption and our payment of taxes, royalties and other fees associated with doing business, both in Australia and overseas. Our Code of Conduct clearly outlines the required standards of conduct for Newcrest directors, officers, employees and contractors in relation to payment of taxes, royalties and other fees. We had no instances of responding to any claims of bribery or corruption during the reporting period. During the year, allegations emerged regarding Newcrest selectively briefing analysts. The Newcrest Board and the entire organisation takes these allegations very seriously. These claims came to the attention of the Australian Securities and Investments Commission (ASIC), which has since commissioned its own investigation into the matter. Newcrest has cooperated in this investigation. Additionally, Newcrest commissioned an independent review of the Company s disclosure and investor relations practices. This independent review was undertaken by Dr Maurice Newman, former Chairman of the Australian Securities Exchange (ASX) 21. In his report, Dr Newman acknowledged that the Company takes its continuous disclosure obligations very seriously and, by and large, has in place processes to reinforce this, and made a number of recommendations. Newcrest has since made changes to its policies and procedures to give effect to these recommendations. Changes in government regulation A key consideration for the extractive industry, which by its nature is high risk and capital intensive, is fiscal and regulatory certainty. During the reporting period, fiscal and/or regulatory reviews were underway in every jurisdiction in which the Company operated. This included a review of state government royalty on gold revenue in Western Australia and wide-ranging reviews of mining and tax legislation in PNG, Cote d Ivoire and Fiji. Newcrest seeks to have input into the development of relevant government policy mainly via its membership of industry bodies in the various jurisdictions in which we operate. However, from time to time, Newcrest makes submissions and representations in its own right, especially where there is a potentially disproportionate or significant impact on our Company. Promoting government capacity As exploration and mining activities expand into different countries, sometimes at an unforeseen scale, it can be challenging for local governments to build relevant capabilities in line with the scale of the emerging activity. We believe it is in the interest of all stakeholders (including governments and communities) to invest in building the capabilities of local governments to undertake tasks to support sustainable mining activity, such as mine inspections, and regulate environmental and social impact assessments. We support the principles of government capacity, transparency and governance in all jurisdictions in which we operate. We encourage a stable, efficient and transparent regulatory and fiscal framework within which to operate. We will continue to look to strengthen our existing relationships with governments where we operate Extractive Industries Transparency Initiative homepage. 20 Newcrest was welcomed into the EITI as a Supporting Company on 20 December The independent review was completed and the report was released publicly in September NEWCREST MINING SUSTAINABILITY REPORT 2013

23 Our Economic Responsibilities Market conditions and challenges to production made FY2013 a difficult year for Newcrest. With operations and exploration activities across Australia, Papua New Guinea, Indonesia, Fiji and Côte d Ivoire, any fluctuation on Newcrest s economic performance impacts the direct and indirect benefits we are able to provide to our diverse group of stakeholders. Notwithstanding the market and financial challenges, the sharing of economic benefits has remained an intrinsic part of the way we do business. NEWCREST MINING SUSTAINABILITY REPORT

24 Our Economic Responsibilities continued Market conditions and economic performance After a decade of sustained growth, the gold price fell during the year, with a significant and rapid price decline early in the final quarter. Gold had been on a downward trend, throughout FY2013, falling from a high of almost US$1,800 per ounce in early 2012 to a low of US$1,200 per ounce in late June This had a significant impact on Newcrest s financial position and prompted some decisive actions by Newcrest. The impact of the decline in gold price was exacerbated by a lower than planned level of production in some locations due to a number of challenges, including the reliability of the old plant at Lihir and issues with ground conditions at Gosowong. Following lower than planned production levels and the decline in commodity price for the 2012/2013 financial year, Newcrest reported a 15 percent decrease in overall revenue to A$3,775 million, a decrease in underlying profit by 58 percent to A$451 million, and a statutory loss of A$5,778 million impacted by asset impairments and write-downs. Operating cash flow of A$707 million reflected a 59 percent reduction from the previous year 22. There was no final dividend for FY2013. Newcrest responded decisively to the challenges associated with volatile external market conditions by focusing on maximising free cash flow rather than maximising production. This involved actions to accelerate cost reduction programs and reduce capital expenditure. Although Newcrest s exploration program and related expenditure will decrease for FY2014, growth options have been preserved and our strategy of focusing on predominantly long-life, low-cost gold assets, primarily in Australia, the Pacific region and Asia remains unchanged. Critical exploration programs at Wafi-Golpu, Telfer and Gosowong are the focus of exploration activity during the 2014 financial year. Operating plans have been revised to meet the new price environment, with a focus on lower cost, higher margin ounces, reduced exploration and reduced project expenditure. The focus on maximising free cash flow has resulted in lower production at some assets, with higher cost ounces remaining available for future production. Across the Company, actions have been taken to position the Company for a lower price environment. Regrettably, some employees lost their jobs as a result of the ensuing changes (further information provided in Our Employee Responsibilities), while executives and managers received nil to very low performance incentive awards for FY2013. Despite these challenges, a significant achievement during the reporting period was the delivery of two major projects, Cadia East Panel Cave 1 and the Lihir plant expansion, on time and within 8 percent of budget. The Cadia East Project achieved commercial production in January 2013 following the development of Panel Cave 1 and completion of the plant expansion and materials handling systems. The expanded process plant at Lihir was commissioned in February Both projects have performed to the Company s expectation and are expected to underpin the Company s long-term gold and copper production. 22 Refer to the Newcrest Mining Limited Annual Report 2013 for full financial statement. 22 NEWCREST MINING SUSTAINABILITY REPORT 2013

25 Sharing of economic benefits Newcrest can deliver benefits to stakeholders and invest in local communities only by running a profitable business model. Despite challenges during the reporting period, Newcrest retains a sound balance sheet with significant liquidity and has no debt facilities to be refinanced in the 2014 financial year 23. Newcrest was able to deliver a range of direct and indirect economic benefits to local, state and national governments through the payment of taxes, royalties and rates, and to our shareholders through the payment of an interim dividend. Payment to governments in the form of corporate income tax, dividend withholding tax and royalties was approximately A$256 million for the reporting period, as illustrated by site in Graph 1. Newcrest employees are paid competitively and in all countries above the minimum statutory wage in their country of operation. This is not only to attract and retain employees within a competitive market, but also to help strengthen local economies on top of direct government and community payments. A total of A$510 million was paid in employee salaries and wages during the reporting period. In addition to these payments to governments, Newcrest also provided a range of direct benefits to communities which, as set out in Our Social Responsibilities, amounted to A$146 million in the reporting period and is shown in Graph 2 below. This expenditure included payments made under land owner and land use agreements, direct investment to local communities, donations made to charities and the cost of running the Company s community relations departments. It excludes monies paid to local communities and their businesses in support of mining and related activities. Graph 1: Payments to Governments (non-recoverable only) (A$M) FY2013 (1)(2) 27.5 Cadia Valley Operations 29.3 Telfer 45.0 Lihir Operations Gosowong 3.8 Hidden Valley 4.1 Bonikro 12.7 Corporate Office (1) Government payments represent cash amounts paid to the respective jurisdiction governments in FY2013. These include corporate income tax, dividend withholding tax, fringe benefits tax and royalties. (2) Amounts quoted are on a cash basis. Our Economic Responsibilities Graph 2: Total Community Expenditure by Site (A$M) FY2013 (1)(2) School bench donation, Cote d Ivoire Cadia Valley Operations Telfer Lihir Operations Gosowong Hidden Valley Bonikro Namosi Project Wafi-Golpu Project Corporate Office (1) Community expenditure represents costs paid in FY2013. These include native title agreements, land use agreements, land owner/provincial government agreements, investment into local communities, donations made to charities and community department costs. (2) Amounts quoted are on a cash basis and are a combination of capital and operating expenditures. 23 On 28 March 2014, Newcrest announced that it completed arrangements to extend the tenor of its existing bilateral bank loan facilities. NEWCREST MINING SUSTAINABILITY REPORT

26 Our Environmental Responsibilities Newcrest is committed to achieving an excellent standard of environmental performance in all its business activities in accordance with the Newcrest Environmental Policy. 24 NEWCREST MINING SUSTAINABILITY REPORT 2013

27 Newcrest s Environment Policy underpins our commitment to sustainable environmental management and can be found with our other Company policies at The Environment Policy defines our approach to inform and consult with local communities, comply with applicable environmental laws and regulations as a minimum standard, and integrate environmental management into all levels of the business. Newcrest s environmental strategy and performance are overseen by our Board s Safety and Sustainability Committee 24. We manage major environmental hazards through application of corporate standards and site-specific management plans to mitigate potential impacts and progress improvement actions. Our internal reporting system (CHESS Community, Health, Environment and Safety System) provides a centralised tool for tracking and reporting of environmental incidents to identify opportunities to reduce the frequency and severity of incidents. Our sites are located in geographically diverse locations, with varying climates, topographies, regulations and community expectations, each of which offer unique environmental challenges and opportunities. As part of continuous improvement, we are constantly seeking opportunities to more effectively manage environmental resources and minimise waste. Waste management (including tailings and waste rock) and efficient water use are material for all of our operations regardless of location. Management of waste is a core component in the life cycle of our sites that includes the development of Closure Plans for each site that incorporate rehabilitation of waste storage facilities and mitigation of the potential for Acid and Metalliferous Drainage (AMD). Closure plans are progressively updated in accordance with regulatory requirements, based on the predicted life of each site and consideration of community and stakeholder expectations. Each of our sites regularly report on their environmental performance to regulators and community stakeholders. At a corporate level, Newcrest reports annually on energy consumption for our Australian sites as a regulatory requirement of the National Greenhouse and Energy Reporting (NGER) scheme. We also report energy efficiency projects as part of the Energy Efficiency Opportunities (EEO) Act (2006) 25. Newcrest has currently two sites that have reporting obligations under the Act Cadia Valley Operations (CVO) and Telfer Gold Mine (Telfer). We met our reporting obligations for the Telfer mine in Telfer total energy use in the last financial year was 18,140,951 gigajoules (GJ). A total of 13 energy efficiency opportunities were identified in the assessment, three of which have been implemented within the reporting period, totalling an estimated energy saving per annum of 19,590 GJ for these three initiatives. Energy efficiency assessment at CVO will commence at the completion of the expansion works associated with the Cadia East development (Panel Cave 2 development is ongoing) and we will look to apply similar processes to those used at Telfer Gold Mine to meet our EEO obligations. To learn more about these opportunities, please refer to our 2013 EEO Public Report on the Newcrest website at Our Environmental Responsibilities Gosowong processing plant. 24 The Safety, Health and Environment Committee was renamed the Safety and Sustainability Committee on 12 February The Energy Efficiency Opportunities Act (2006) in Australia applies to corporations that use more than 0.5 petajoules (PJ) (500,000 GJ) of energy in a reporting year. The program encourages large energy-using businesses to improve energy efficiency by requiring them to identify, evaluate and report publicly on energy saving opportunities. NEWCREST MINING SUSTAINABILITY REPORT

28 Our Environmental Responsibilities continued By developing a sustainable and efficient supply of energy at our mine sites, we can make a positive contribution to the environment by reducing our overall emissions intensity. At our Telfer site, power is primarily generated from low emission gas turbines, and energy use in the last financial year was 18,140,951 GJ, while implementation of energy efficiency opportunities delivered an estimated saving per annum of 19,590 GJ. Additionally, our Lihir operation operates a small geothermal power plant as an energy-efficient contribution to site power requirements. At a regional level, Newcrest actively participates in industry forums and engages with regulators to review emerging environmental policies and legislation to provide feedback that can improve industry performance (e.g. through the NSW Minerals Council, Minerals Council of Australia and Papua New Guinea Chamber of Mines and Petroleum). Newcrest is also a member of the Business and Biodiversity Offsets Program and International Network for Acid Prevention. Newcrest manages biodiversity aspects in accordance with our Environmental Policy and standards. For each site, we review protected areas and species within the region and develop management plans to mitigate potential impacts. Surveys are undertaken prior to land disturbance for protected species or habitats. Where identified, these are managed appropriately in accordance with site-specific plans. For example, management strategies are being implemented at Cadia Valley Operations to salvage habitat resources (such as timber, trees with hollows etc) from disturbed areas for placement within rehabilitated waste rock dump areas. All Newcrest operating sites other than CVO use cyanide as a reagent. In recognition of this, Newcrest is a signatory to the International Cyanide Management Code for the Manufacture, Transport and Use of Cyanide in the Production of Gold (ICMC or the Code). The objective of the Code is to improve the management of cyanide used in gold mining and assist in the protection of human health and the reduction of environmental impacts. Newcrest actively manages risks associated with transport, handling and use of cyanide at our sites. Ongoing progressive implementation of the ICMC by Newcrest is focused on a risk-based approach. Supply chains for all of our operations are certified to the Code. Gosowong Mine and Telfer Mine (including the carbon in leach plant, but excluding the flotation circuit) are certified to the Cyanide Code. During the reporting period, Hidden Valley made substantial progress towards certification, with further work required at Lihir and Bonikro for full implementation. Bonikro Mine has postponed implementation of the Code within the current two-year certification cycle, pending business decisions on an appropriate risk-based timeframe for implementation. Groundwater monitoring at Lihir. 26 NEWCREST MINING SUSTAINABILITY REPORT 2013

29 Waste management Waste management is a material issue for each of our sites and it occurs in many forms. Waste rock and tailings are our two largest waste streams, and ongoing management is required to ensure long-term geochemical and physical stability. Total waste rock and tailings by operation is shown in Graph 3. Other waste streams include general waste, tyres, batteries, scrap steel, sewage sludge, medical waste and waste oil. During the reporting period, rehabilitation works continued at one of Cadia Valley Operation s waste rock dumps to apply a cover that reduced water and oxygen infiltration to maintain compliance with our downstream water quality requirements (refer case study). A waste related challenge for the mining industry is Acid and Metalliferous Drainage (AMD). AMD can result from oxidation of sulphide minerals, which occur naturally in the rock. AMD is particularly relevant for our sites in high rainfall areas with sulphide bearing mineralogy. A key component of our AMD management system is the requirement for site-specific AMD Management Plans. We participate in the International Network for Acid Prevention (INAP), an industry association that aims to reduce the risks associated with AMD through information sharing, collaboration, research and technology transfer. Tailings are the waste material from ore after the economically recoverable metals and minerals have been extracted. At Hidden Valley, Bonikro, Gosowong and our Australian sites, tailings are stored in engineered tailings storage facilities (TSF). The TSF at Hidden Valley is the first to contain all tailings for a major open pit mining operation in PNG. At Lihir disposal of tailings is undertaken via deep sea tailings placement (DSTP). DSTP is a specialised form of marine tailings placement, where the outfall location and depth are selected to discharge the tailings below the biologically productive upper ocean layers. This type of system is appropriate for locations where deep ocean water is close to shore and favourable currents assist the tailing to descend and deposit on the deep ocean floor, and mitigate the risk for upwelling. Prior to the approval of the Lihir DSTP system by the PNG Government, detailed assessments of land and marine disposal options were conducted with consideration to safety, environmental and socio-economic aspects, consistent with the requirements of internationally recognised standards and practices. The Lihir DSTP is permitted under the PNG Environment Act 2000 and has been operating successfully since In addition to extensive regulatory monitoring programs, the Lihir DSTP has been the subject of several independent studies, including research by the Australian Government s Commonwealth Scientific and Industrial Research Organisation (CSIRO) and the Scottish Association for Marine Science, to validate the performance of the system in comparison to international best practice. Newcrest is committed to ongoing monitoring and study of the DSTP system to understand and mitigate potential long-term impacts of tailings discharge on marine ecosystems. As part of continuous improvement, during the reporting period, Newcrest reviewed the Tailings Management Standard in consultation with sites and external specialists to benchmark the standard against current leading practice and identify improvement opportunities. Further engagement with sites and senior management is planned to consider these recommended changes. Graph 3: Total Waste Rock and Tailings by Operation ( 000 tonnes) FY ,300 Cadia Valley Operations 61,450 21,376 Telfer 11,832 6,936 Lihir Operations Waste rock (kt) 6, Gosowong 17,872 Hidden Valley Tailings (kt) 3,640 18,827 2,512 Bonikro Exploration, Namosi Project, Wafi-Golpu Project and Corporate Office not relevant. Our Environmental Responsibilities NEWCREST MINING SUSTAINABILITY REPORT

30 Our Environmental Responsibilities continued Rehabilitation waste management at Cadia Valley Operations Rehabilitation is undertaken progressively at Cadia Valley Operations (CVO) in accordance with commitments and approved plans as landforms become available. The North Waste Rock Dump (NWRD) is located on the north-eastern side of the Cadia Hill open pit and contains approximately 32.2 million tonnes of waste rock material with a surface area of approximately 70ha. A proportion (approximately 27 percent) of material placed in the NWRD is potentially acid forming (PAF), with the potential to generate leachate (seepage waters) of slightly acid ph containing elevated dissolved metals and sulphates. From a mine closure perspective, in the absence of encapsulation, treatment or other type of intervention, the leachate water is unlikely to be of suitable quality to be released back into the surrounding environment. Rehabilitation planning commenced for the NWRD in 2007 with the aim of designing and implementing a cover system and landform that: is safe for access and use by native fauna and future generations; is stable and resistant to active erosion, with permanent ground cover; is consistent with, and blends in with, the surrounding topography; adds ecological value to the area through rehabilitation to a self-sustaining, self-regenerating native woodland community; and manages PAF material to minimise future liabilities to Newcrest, the community and the environment. Consultants were engaged in 2007 to utilise information from site-based physical and geochemical waste rock assessments, PAF monitoring results (from the South Waste Rock Dump (SWRD)), an extensive column leach program and site vegetation characteristics to design a suitable cover system to manage risks posed by PAF material in the NWRD. This information was coupled with detailed modelling work using a 100-year climate database, a 250-year erosion prediction model and CVO s mine closure objectives and final landuse/landform plans. Outcomes from the assessment and modelling process lead to a cover design that will minimise the infiltration of rain water into the PAF material and comprised the following components: 0.5m compacted clay 2m benign waste rock mm topsoil. The placement of these layers form a store and release type cover system, where rainwater infiltrates and is stored above a low permeability seal within the 2m of benign waste material. The moisture is utilised by vegetation and is released via evaporation and transpiration from the final woodland community. Preventing water from accessing the PAF material reduces oxidation processes and the generation of leachate. View of the NWRD from the west showing shaped profile of batters and installation of HDPE liner of the lower portions. Implementation of rehabilitation works on the NWRD commenced in late 2011, and has involved shaping and contouring to a designed base profile, the placement and compaction of clay, placement of 2m of benign waste rock (growth medium) and topsoil. Available clay was utilised on the upper plateau areas and consideration was given as to whether clay could economically be relocated from the CVO Tailings Storage Facility locality. The decision was made to install a High Density Poly Ethylene (HDPE) liner (in lieu of clay) on the remainder of the NWRD which has the following benefits: Known permeability, which will provide a better low permeability seal than clay and improve the overall performance of the cover system. Avoid long-haul distances from relocating clay from southern areas to the NWRD. Retain clay resources in southern areas for future tailings storage facility construction and South Waste Rock Dump (SWRD) encapsulation and rehabilitation. Other features of the rehabilitation design include rock-lined drainage structures, constructed wetland to hold and improve water quality and the placement of habitat structures such as rocks, logs and ponds. The area will be monitored to determine the success of the PAF encapsulation through the placement of in-situ moisture, suction, temperature and lateral flow sensors. These will be coupled with on-site weather data to determine the overall water balance of the NWRD rehabilitated landform. Vegetation establishment and successional change will be monitored on an annual basis and compared against agreed mine closure criteria developed from a similar reference vegetation community. The successful rehabilitation of the NWRD not only meets CVO s commitments requiring progressive rehabilitation, but will also allow us to develop, refine and practice rehabilitation techniques that can be applied to other areas of the site including the SWRD. The NWRD was completed in December NEWCREST MINING SUSTAINABILITY REPORT 2013

31 Water management Water management as part of our mining activities has potential social, economic and environmental impacts that cannot be isolated from the surrounding region, and ongoing management of water use is a material issue to maintain our licence to operate. Water used at Newcrest s sites is extracted from different sources, dependent on availability, climatic conditions, environmental sensitivities and local permitting requirements. Our sites operate in highly variable climatic zones, and average annual rainfalls across the Group vary between approximately 0.5m/year at Telfer through to 5.5m/year at Hidden Valley and Lihir. Under our environmental management program, all sites monitor water supply, use and quality and develop plans for stormwater management and recovery from extreme events. Water monitoring programs extend to local catchments, including downstream creeks or streams. Mitigation of potential impacts on water quality, such as sediment load, salinity, metals and hydrocarbons, is addressed via control measures at the source, including engineered controls and application of handling procedures. Water extraction and discharge is monitored and reported for each site. During the FY2013 reporting period, Newcrest extracted a total of 98,626 megalitres (ML) for use at its operations. This includes groundwater, surface water from adjacent rivers or creeks (while maintaining environmental flows) and recycled waste water from nearby towns. In addition to this, 174,356ML of seawater was extracted at Lihir Operations. Seawater is used for cooling water (heat exchange) within the oxygen plant and power station on Lihir Island. The warm return water is mixed with the tailing slurry at a junction box upstream of the DSTP system. The seawater diluted tailing mixture is discharged through an underwater pipeline at 115m water depth (refer to Deep Sea Tailings Placement (DSTP) in the Waste Management section for further information). Most sites or plants recycle a component of the daily volume extracted to reduce overall water consumption. Waste water is generally recycled for use within process plants by mining equipment or for dust control. The ability to recycle process water is subject to a number of operating constraints. For example, at Lihir, recycling process water is limited due to the process plant s sensitivity to chloride (salt). The total volume of water discharged from sites was measured at 240,890ML over the 12-month reporting period, which includes water use and rain water that has been in contact with the site. Some 83 percent (200,919ML) of the discharge volume was associated with the discharge of return seawater, which is used for cooling the power station and oxygen plants at Lihir. Each year, further opportunities for improved water use efficiency are identified. As a member of the Minerals Council of Australia (MCA), Newcrest has endorsed the adoption of the MCA s Water Accounting Framework for the minerals industry. The framework provides a consistent methodology for communication on how an operational facility utilises water. Our Environmental Responsibilities Graph 4: Total Water Withdrawn* (ML) FY2009 FY ,522 72,071 98,626 Graph 5: Total Percentage of Water Recycled and Reused (%) FY Graph 6: Total Water Discharged (ML) FY2009 FY /09** 2009/10** 2010/ / /13 Cadia Valley Operations 196,580 Telfer Gosowong Hidden Valley Bonikro 26,936 27,646 Namosi Project 2008/09* 2009/10* 2010/ / / , ,387 4, ,890 * Excludes seawater. ** Excludes ex-lgl sites. * Excludes ex-lgl sites. NEWCREST MINING SUSTAINABILITY REPORT

32 Our Environmental Responsibilities continued Improving water quality through construction of stable waste dumps, Hidden Valley An important issue for the Hidden Valley Joint Venture (HVJV) and the local community at the Hidden Valley mine is water quality. Many local villagers live a subsistence lifestyle that is dependent on the quality of the agricultural land and water. Whilst HVJV adopts many strategies to manage its impact on water, such as scheduled water quality monitoring and compliance monitoring of water extraction and discharges, a key part of the environmental program for the mine is minimising the potential for impacts on water quality from erosion. Eroded sediment has the potential to affect downstream water use and environmental values by increasing suspended sediment levels and in-stream sedimentation with potential long-term implications. A key potential source of erosion and sediment from the Mine area is the waste rock dumps, along with ore stockpiles, topsoil stockpiles, pits, roads, other engineered slopes, and drilling and exploration areas. The potential for erosion across the mine area is particularly significant given the steep terrain and area of disturbed land, combined with high rainfall conditions. Natural landslips are common in the region and have the potential to be exacerbated by mine related land disturbance. Waste rock dumps at Hidden Valley are designed to meet industry standards and legislative requirements for environmental management. This provides long-term dump stability and manages stream sedimentation and the potential for the generation of Acid and Metalliferous Drainage (AMD). Waste rock dump designs require geotechnical stability under a range of loading conditions, including static and post-seismic. Due to the high rainfall and steep terrain prevalent at Hidden Valley, dump design parameters are based on conservative assumptions. Long-term geotechnical stability is provided by; Relatively shallow, benched slopes ( 20 ); Removal of unsuitable materials from the toe footprint; Construction of toe buttresses comprised of compacted fill; and Control of phreatic surfaces within the dump by means of an underdrainage system. The underdrainage system has been designed, based on 3-dimensional seepage modelling, to maintain a moderately low phreatic surface, not higher than ~10m to 20m above the drains. Water is managed under the sites water management policy. Dump drainage including surface and underdrainage is designed to minimise the potential for sedimentation of downstream drainages and dump erosion. Stable drainage is constructed to slow the water s velocity and minimise the capacity to cause erosion and mobilise sediment. This is achieved by constructing stable drainage into natural stable areas such as valley floors, stable stream beds and vegetated areas. Hidden Valley pit. The waste rock from the Hamata and Hidden Valley pits is classified as Potentially Acid Forming (PAF), Non Acid Forming (NAF) or barren. These materials are strategically placed in the dumps to minimise the potential for environmental impacts associated with the generation of ARD. This is achieved by minimising the oxidising capacity of PAF materials. A waste rock dumping strategy is implemented based on the specific ARD characteristics of the waste material removed from the mine pits. In-pit characterisation and mapping of ARD rock types has been utilised to develop a geochemical block model for the Hamata and Hidden Valley pits. The information from the block model is used to enable selective dumping of materials with various ARD characteristics. Waste rock ARD types are identified prior to removal from the mine benches; these parameters are incorporated into the truck dispatch system, which is then used to manage movement and placement of all rock types. The dumping strategy is based on the encapsulation of PAF materials by NAF and barren material. High capacity PAF material is placed towards the rear portion of the dumps to enable a maximum depth of burial. Low capacity PAF is placed at the front of the dump and all PAF material will be excluded from the final outer margins of the dumps. Exposure of PAF material to oxidising conditions is minimised by reducing the exposure time of each lift surface. Each lift surface is also compacted to minimise the ingress of oxygen and water. NAF rock is utilised for the construction of dump drainage structures, the basal layer and the final margin of short-term and interim dumps. This reduces oxygen and water infiltration into PAF materials and assists in preventing surface drainage coming into direct contact with PAF material. NAF material will also be placed on the final outer margins of the dumps. Barren waste material is preferentially utilised in the basal layer or the outer shell of the interim dumps. By carefully managing the impacts of our waste rock through these activities, we aim to minimise any potential effect we may have on downstream water use and the environment. 30 NEWCREST MINING SUSTAINABILITY REPORT 2013

33 Our Social Responsibilities Building and maintaining our social licence to operate is dependent on our ability to recognise and to meet our social responsibilities in the communities in which we operate. As we have grown and expanded internationally, our community relations approach has necessarily changed in line with our more global and socially complex context. NEWCREST MINING SUSTAINABILITY REPORT

34 Our Social Responsibilities continued It is Newcrest s vision to be the Miner of choice for the communities where we explore or operate. Newcrest s approach to managing our social responsibilities is defined by our Community Policy and Community Standards, intended to drive a consistent approach across our sites. The key principles guiding our approach to community relations as expressed in our Communities Policy are to: Identify the cultural values, traditions and beliefs of the communities, including Indigenous Peoples, and respect and respond to those values and belief systems. Be open and transparent in all dealings with communities and in describing and explaining potential social and environmental impacts that might occur. Seek broad community support for our activities. Commit to developing long-term partnerships that are mutually beneficial over a life of mine time scale. Ensure that communities are fairly compensated for impacts and obtain a fair share in the benefits generated by a development. Work to apply internationally recognised principles of best practise in all fields of endeavour. Newcrest will at all times adhere to the laws and regulations of the country in which it is operating. We are enhancing this framework on an ongoing basis by the development of a series of Community Relations Guidelines to support the eight Community Standards already in place. These Standards are as follows: 1. Community Baseline Standard. 2. Socio Economic Impact Assessment Standard. 3. Community Strategic Plans Standard. 4. Stakeholder Engagement Standard. 5. Land Access and Compensation Standard. 6. Community Relocation Standard. 7. Cultural Heritage Standard. 8. Community Investment Standard. Inherent in this approach is the flexibility to understand and respond to local customs, practices and knowledge. We draw largely on our local community relations teams, who are pivotal in maintaining on-the-ground relationships and understanding community needs, concerns and opportunities and in translating the high level framework of the Standards into locally applicable actions and programs. Investing in our communities Newcrest is committed to developing and maintaining positive relationships in the communities in which our mines operate and investing in our local communities. Our focus for community investment is on public infrastructure and community projects, particularly health, education and agriculture, all of which provide a range of direct benefits to local communities. Despite the challenging economic climate, we have continued to focus on and prioritise our community commitments. Our financial support during the reporting period was comparable to last year as a proportion of revenue. In the reporting period, our overall expenditure on benefits to local communities was approximately A$146 million, representing a 40 percent increase in year on year. The increase against FY2012 reflects inclusion of community expenditure at Namosi not fully captured in FY2012, additional expenditure at Lihir to support projects and activities during the continuing landowners agreement review process, and settlement payments at Lihir to help resolve major community disputes. This expenditure includes payments made under land owner and land use agreements, direct investment to local communities, donations made to charities and our costs in running our community relations departments. It does not include wages and salaries, taxes, training and development and local business contracts. Figures for local employment are provided under Our Employee Responsibilities section of this Report. The agreement at Lihir is a highly complex and socially sensitive process that can extend over significant periods of time. The current review process has been underway since NEWCREST MINING SUSTAINABILITY REPORT 2013

35 Our approach to working with local communities, including the use of local suppliers, is guided by several policies. Newcrest s Diversity, International Employees and Communities and Supply policies variously promote and value diversity in Newcrest s workforce, seeking to maximise direct local engagement in our operations through employing local people and engaging local businesses, where practicable, and ensuring that communities are fairly compensated and obtain a fair share of benefits from the relevant operations. Newcrest has no formal Company-wide policy for local supplier preference, but we do actively consider opportunities for purchasing goods and services from within the communities in which we operate. This is subject to practical, operational and financial considerations. While our systems are not yet sufficiently mature to break down expenditure completely into geographical areas, we can report on the approximate spend with businesses within the country of operations, considered in-country, compared to what is spent with company entities outside of the country of operations. For the purposes of this Report, in-country is considered to be local. Of the total expenditure across Newcrest Group during the reporting period, 71 percent (A$2,853 million) was spent locally, which is a marginal increase from 70 percent reported in FY2012. The breakdown of expenditure and percent spent as local for each country is as follows: Papua New Guinea 51 percent (A$580 million). Australia 80 percent (A$2,010 million). Indonesia 78 percent (A$158 million). Cote D Ivoire 57 percent (A$106 million). There is no commonly adopted breakdown and definition of community contributions or investments across the mining industry. As such, during the reporting period, Newcrest took part in research commissioned by the MCA to capture the dollar value of community investments and to understand the types of statutory and discretionary spend on activities that may be of benefit to the Australian community. The full report, publicly available on the MCA website 26, outlines the key similarities and differences in methodologies used across a range of 26 major mining companies in Australia. One of the most important aspects of community investment for Newcrest is to address actual community needs and to equip the community with the skills and tools to be independent over the long term. We therefore developed Community Investment Guidelines during the reporting period to implement a more strategic and consistent approach to community investment across the organisation. The Guidelines focus on: pro-actively engaging the community in the determination and delivery of community investment plans and strategies; investing in community capability building, which aims to deliver long-term self-sufficiency and economic independence within communities, through education and vocational training and establishing a non-mine dependent economic base, subject to what is achievable and sustainable in any given location; and preparing the community for the post-mining environment. We currently have various community investment models at each site for identifying, implementing and monitoring potential projects. A key focus for the year ahead is to streamline our community investment decision-making process. Community agreements between the operations and the communities in which we operate also remain an important mechanism to ensure that Newcrest is supporting community programs that are sustainable and aligned to the needs of the community. During the year, formal reviews of our existing community agreements at our Lihir, Hidden Valley and Telfer operations were progressed. Implementation of ongoing community programs at Cadia, Gosowong and Bonikro continued, with a wide range of successful outcomes and milestones achieved. Graph 7: Average Entry Level Wage of Local Minimum Wage (%) FY Cadia Valley Operations Telfer Lihir Operations Gosowong Hidden Valley Bonikro Exploration Wafi-Golpu Project unavailable Namosi Project Corporate Office Our Social Responsibilities 26 Mineral Council of Australia website. NEWCREST MINING SUSTAINABILITY REPORT

36 Our Social Responsibilities continued Corporate Social Responsibility program at Gosowong Community housing. Fish farm ponds. Gosowong creates economic value for Indonesia and its local communities in a number of ways, including employment of a local workforce. The total workforce is around 2,200 people, of which 98 percent are Indonesian. The operation also supports the community in the fields of infrastructure, education, health and support of local suppliers by committing one percent of annual revenue to the Corporate Social Responsibility (CSR) program. The program covers the five sub districts surrounding the mine and is designed to share the benefits of mining, support community needs and strengthen socio-economic development in the region. The CSR program at Gosowong places a priority on sustainable economic development, including the diversification and development of local agriculture, farming and aquaculture industries. It is supplemented by annual allocations to each village for them to develop their own community infrastructure, health and education interventions. The creation of cassava, corn and sago plantations, and associated marketing and sales arrangements, are the three main agriculture projects currently supported by the program. The program s areas of impact and influence are spread throughout the five sub-districts: Kao Utara, Kao Barat, Kao, Malifut and Kao Teluk. Through the Cassava Development Project, we focus on building a lasting legacy of community development that will evolve and prosper long after the mine is gone. In , we analysed the potential of local businesses and identified agricultural commodities surrounding the mine as having the potential to be developed into business ventures. Three crops in particular were targeted: Cassava in all sub-districts; Sago in Kao Barat; and Corn in Kao Utara, Kano, Malifut, and Kao Teluk. In 2012 and 2013, we moved from the project planning phase to supporting the implementation of the business venture, keeping to key project objectives: improving quality of life; building a more independent community; increasing business activities within the community; and increasing social communication between company and community. The business model underpinning the project was developed through collaboration between the Company s CSR team and the community. The concept was designed to stimulate the local economy by offering the opportunity to produce unrefined crop flour and sell it to refining houses. As such, the two businesses units involved in the business model are: Craftsman houses used for agricultural education and processing the raw crop into unrefined flour and selling it to the refining houses; and Refining houses where the product is refined and shipped to buyers. Successes and results of 2013 The first cassava harvest took place during the reporting period, producing 20,000kg of cassava which are further processed to produce tapioca flour. Such CSR agriculture projects are estimated to increase the current average income of the families involved by almost 40 percent. This extra money can be used to support other business development activities and improve living standards 27. The next phase of this program will be to transition ownership and control to local farmers through a yet to be established corporate structure. The key learning from this project was the importance of gaining the confidence of the community. We did this by engaging with the community from the outset and consulting throughout the process to ensure the program outcomes continued to meet community needs. We also focused on the transfer of business process knowledge to the refining and craftsman house business units. Given the positive outcomes of the program, Newcrest is considering replicating the experience at other sites in the next reporting period. 27 Refer to Newcrest Annual Report NEWCREST MINING SUSTAINABILITY REPORT 2013

37 Respecting human rights Newcrest is committed to respecting the human rights of all stakeholders, including our employees, contractors and local communities. We seek to use our influence to prevent human rights abuses occurring in the vicinity of our operations, and will engage in dialogue with stakeholders and local communities to promote human rights. Human rights violations by our employees, contractors and/or any other persons or groups associated with our business will not be tolerated. Newcrest has approved a Human Rights Policy, and this will be implemented over the next two years. The policy is intended to ensure that there is consistency with commitment, implementation and accountability across all of our business interests. This policy is also supported by a new Security Policy and amended Communities Policy. Furthermore, Newcrest is aiming to become a member company of the Voluntary Principles on Security and Human Rights by the end of FY2014. While the Human Rights and Security policies are new, the respect of human rights has always been part of the way we do business and is embedded in our Code of Conduct and Diversity policies. Our new policies further enhance this. Part of the implementation process will include a review of the Company s various internal procedures and processes, external business relationships and, where necessary, the integration of additional relevant human rights procedures and clauses into the way we do business. As a member of the Minerals Council of Australia (MCA), Newcrest is a signatory to the Enduring Value Framework. This framework is based on the International Council on Mining and Metals (ICMM) Principles. The ICMM includes a commitment in principle three to Uphold fundamental human rights and respect cultures, customs and values in dealings with employees and others who are affected by our activities. This is reported on annually. Our Social Responsibilities NEWCREST MINING SUSTAINABILITY REPORT

38 Our Social Responsibilities continued Domestic violence against women, Lihir Haus Krai walk, Lihir. A significant issue in Papua New Guinea (PNG) is violence against women. Newcrest employees in PNG have been involved in several activities during the year as part of a response to the high rate of domestic violence in the community. Newcrest recognises the important role we can play in raising awareness of domestic violence and igniting wide community conversations contributing to ending violence. Consequently, employees have been invited to participate in a number of programs and events during the reporting period. At Lihir, as part of the national Haus Krai (the National Haus Krai is a house of mourning, where people come together and mourn/weep over killings, violence and abuse against women), Newcrest employees participated in the Lihir Haus Krai with the community, which involved a community walk to the Lihir Meri Development Centre, where all joined in the mourning for women impacted by violence and abuse. Discussion and awareness of the issues of violence against women were part of the activities during the day. The Lihir Sustainable Development Department teamed with OHS&S to plan and organise the event in Lihir, and organised all logistics, marketing materials and traffic management for the day. The national Haus Krai Advisory Committee had representatives from Newcrest, LMALA, Lihir Subdistrict Administration, Lihir Meri Development Centre, Town Resident Representatives and the Catholic Church. Newcrest Lihir supported the day, enabling employees working at the mine to participate on the day through their morning tool box meetings, raising further awareness within the workforce and setting an example to other stakeholders in Lihir. Awareness sessions for 47 graduates provided an opportunity to learn more about the impact of domestic violence on individuals, as well as the wider community. The graduate conference held from May included a workshop on domestic violence titled Walking in Her Shoes. One of the objectives is to build awareness with employees so that they are able to pass the message back to families and villages, and contribute to breaking the taboo of silence around this issue. As part of Domestic Violence Week, key messages about domestic violence were communicated as part of a site-wide communications strategy, championed by the site leadership team. An important part of the information provided has been the focus on appropriate and effective responses to violence and the opportunity to explore possible solutions that may be implemented to bring about change, as well as the opportunity to explore responses to domestic violence. To learn more about what Newcrest stands for, how we interact with our stakeholders and what they can expect from us, please refer to our Code of Conduct, available on the Newcrest website at about-us/company-policies. 36 NEWCREST MINING SUSTAINABILITY REPORT 2013

39 Our Employee Responsibilities We are fortunate to have a workforce consisting of skilled, committed and capable people who are collectively responsible for our success. NEWCREST MINING SUSTAINABILITY REPORT

40 Our Employee Responsibilities continued This reporting period was a very challenging time for Newcrest and our people. We faced significant financial challenges associated with the volatility and decline in the gold price. As at 30 June 2013, Newcrest had a workforce of approximately 17,445 people 28, a reduction of 12.6 percent compared with 12 months earlier. This was undoubtedly a very challenging time for our people, and the impact will be felt for some time as we re-build and strengthen the morale and engagement of our team. Health and safety of our people The health, safety and wellbeing of our staff and contractors are our highest priority. We continue to make improvements to our systems and leadership capability in order to maintain this focus. Newcrest s goal is Target Zero in regards to health and safety impacts. We understand this is an ambitious goal, but are confident we can continue to reduce health and safety incidents in coming years. Setting a target of zero incidents is designed to motivate all employees and contractors to appreciate that health and safety is of paramount importance to Newcrest. Our highest priority focus is on preventing fatal events and life-changing injuries and illnesses. Our Safety and Health Policy is the key document outlining Newcrest s management principles and the vision at all of our sites. Our Safety ReNew Strategy 29, which has been in place since 2012, was maintained and enhanced during this reporting period, with a particular emphasis placed on addressing Major Hazards. This helped continue to drive awareness across the entire workforce regarding the need to remain safe, identify hazards and develop solutions. We are confident in our safety processes and the culture that surrounds these. It is with sadness that we report a fatality during this reporting period 30. In January, a contractor employee was killed in a mobile equipment incident at our Lihir mine town site. The loss of any person is a tragic outcome for all involved. Newcrest is committed to doing everything we can to address risks and all hazards in our business. We have identified mobile equipment as one of the most significant risks to our employees on our sites, and have continued the implementation of a focused program to increase awareness about mobile equipment and vehicle interaction safety. As reported in our previous Sustainability Report, the tragic helicopter accident at Gosowong in the first half of 2012 that killed ten people prompted a significant review of our aviation practices 31. During this reporting period, we agreed to a new five-year relationship in Indonesia with Airfast, who operates our aircraft. In addition to confirming this long-term contract, we acquired new aircraft that optimises the safety of those flying. We also invested in the re-surfacing of the airport we use at Kovok, near our Gosowong mine. This was a necessary infrastructure improvement project that will increase all aircraft s ability to land and take-off safely at the site. The frequency rates are stated in Graph 9 and do not include fatalities. Newcrest continues to focus on improving its system to formally report on frequency rates by employee type, and for occupational diseases and absentee days. Our internal community, health, environment and safety system (CHESS), which was launched during the FY2012 reporting period, provides Newcrest with a single point to consistently monitor and report health and safety data from across the business. As we continue to use, monitor and make improvements to this system, we endeavour to provide our employees with clear, accurate and up-to-date information, which can assist our sites in reporting requirements, as well as identifying measures to manage and mitigate operational risks. Graph 8: Total Number of Employees and Contractors (#) FY2009 FY2013 2,836 2, /09* 4,048 3, /10* 7,814 6, /11 8,335 Total employees (#) Total contractors (#) * Excludes ex-lgl sites /09* /10* /11 Lost Time Injury Frequency Rate (#) * Excludes ex-lgl sites. 11, / /12 9,261 8, /13 Graph 9: Newcrest LTIFR and TRIFR (#) FY2009 FY /13 Total Recordable Injury Frequency Rate (#) 28 As at 31 March 2014, the Company s workforce was approximately 9,200. The reduction in the workforce as against 30 June 2013 reflects the completion of the Company s two major development projects (in Cadia East Panel Cave 1 and Lihir Plant Expansion, referred to elsewhere in this Report) and changes implemented by the Company to simplify activities across all of its sites in the context of the continuing commodity price volatility and lower gold price environment. 29 Our Safety ReNew Strategy is focused on providing the structures and systems so that all employees have the tools to work safely, together with the key leadership and behavioural traits to encourage people to work safely. We embed our approach through safety-focussed production and prestart meetings, hazard reporting, near miss reporting, supervisor competence training, and the Mindful Leadership initiative. Legislative requirements also guide our management and performance targets. 30 On 4 December 2013, following the reporting period, a contractor employee was fatally injured at Telfer gold mine, while undertaking civil works at the tailings storage facility. 31 For more information, see the 2012 Sustainability Report. 38 NEWCREST MINING SUSTAINABILITY REPORT 2013

41 Our Major Hazards Program continues to be the cornerstone of identifying and managing the risks of high potential incidents. The program includes detailed Major Hazard risk assessments completed at each site, involving representatives of the workforce in identifying and evaluating Major Hazards, and then developing improvement plans to continually reduce the levels of risk over time. The program also includes our management safety interactions processes, our incident reporting and investigation processes, and assurance activities aimed at verifying the adequacy and effectiveness of critical controls. The coming year will see a renewed focus on the wellness of our staff, with a particular focus on mental health. While mining is generally a physically challenging profession, it is also emotionally challenging, with a significant amount of time often spent away from home and families. We will address wellness through a series of workshops, which will provide staff with techniques to identify who may be dealing with mental health issues and tools to help provide support. In time, the wellness program will also incorporate nutrition and physical activity as we look to provide a workplace that is healthy and mindful of wellbeing. Striving to improve the health of our employees and local communities Our Employee Responsibilities Combatting neglected diseases at Lihir Lihir Operations have partnered with International SOS (ISOS) and the World Health Organization (WHO) to successfully eliminate the most prevalent Neglected Tropical Diseases (NTD) on Lihir Island. The NTD Filariasis and yaws still represent a major public health problem in many regions of Papua New Guinea (PNG). Lymphatic Filariasis is caused by a parasitic worm transmitted by blood-feeding mosquitoes, and the disease is present at high prevalence in some parts of PNG perhaps the highest in the world. The worm occupies the lymphatic system and lymph nodes, and unless diagnosed and treated in its early stages, Filariasis can lead to severe visible swelling and deformities of limbs that can affect people s lives, productively and socially. A mass treatment program, led by ISOS and funded by Newcrest Mining, has reduced Filariasis by 80 percent in the last six years within the Lihir Island group, and the program will continue with the explicit aim to eliminate the disease from Lihir Island. The coordinated drug delivery strategy has been inspiring to the National Department of Health, which plans to launch a campaign for the elimination of Filariasis in the entire province in March The mass treatment in the province will be supported by the American non-profit organisation Family Health International 360. Newcrest has supported medical research to treat yaws, a chronic infection, which primarily affects the skin and bones of children. In the long term, yaws can lead to severely deforming bone lesions. A mass treatment campaign in the 1950s almost eradicated the disease from 90 countries around the world; however, it soon returned to parts of the Pacific Islands, Southeast Asia and Africa. In 2011, the PNG Department of Health estimated the number of cases across the country to be more than 28,000. Local boy with yaws treatment. Lihir Operations committed to provide joint funding for yaws research in collaboration with the World Health Organization (WHO) and the National Department of Health. The research for the treatment of yaws in Lihir is world break-through and provides a pathway forward for eradication of yaws from the Lihirian community. The first pilot treatment campaigns on Lihir Island are underway to demonstrate the feasibility of eradicating the neglected disease. About 17,000 people have been treated, and the community has been very supportive. The WHO has agreed to a second attempt at eradicating the disease by 2020 in Resolution WHA66.12 of the World Health Assembly (2013). Newcrest has embraced a clear commitment to improve the local context in a sustainable way, and this type of research is certainly delivering positive impacts. These operations leverage their international profile to support in-country partnerships and activities that not only improve the life of the local communities but can have more far-reaching positive results. NEWCREST MINING SUSTAINABILITY REPORT

42 Our Employee Responsibilities continued Striving to improve the health of our employees and local communities Mosquito larvae monitoring for mapping distribution of malaria at Gosowong. Medicine for Malaria Venture partnership Malaria is a serious health concern in several of the regions our sites are located, including Papua New Guinea, Indonesia and Cote d Ivoire. We recognise the impact that malaria can have on the health, wellbeing and life expectancy of our employees and local communities. Newcrest has been proactively conducting programs at each of our sites to curb the incidence of malaria, including personal and environmental controls. Newcrest has a five-year partnership with the Medicine for Malaria Venture (MMV), a non-profit organisation that works around the world conducting research and development towards eradicating the disease. During the reporting period, our second year of the partnership, we commissioned an entomologist from MMV, who visited malaria-impacted sites to review the effectiveness of our existing malaria management framework and identify opportunities for improvement. Training was also held at Lihir, Gosowong and Bonikro to provide employees with information on how to prevent the incidence of malaria. Program to reduce the incidence of malaria in neighbouring communities also continued at Lihir. A future aim of the alliance is to assess the feasibility of eradicating malaria from the Lihir Island Group in collaboration with the Barcelona Institute for Global Health Foundation (ISGlobal). 40 NEWCREST MINING SUSTAINABILITY REPORT 2013

43 Employing and developing a local and diverse workforce Newcrest recognises the benefits of a diverse and inclusive workforce. Given the breadth of careers we have, the location of our operations and the size of our workforce, it is not surprising that we have a diverse team. Our diversity helps create an environment where innovative ideas are generated and problem-solving capability is enhanced to enable Newcrest to be a competitive, sustainable organisation. Diversity at Newcrest is led by the Board and the Executive Committee (ExCo), together with the ExCo Diversity Sub-committee, and is driven by the recognition that an inclusive culture and diverse workforce supports high performance. Diversity also better enables the Company to foster enhanced community connections and increased morale, motivation and engagement. Diversity at Newcrest incorporates differences that relate to gender, age, ethnicity and cultural background. It also extends across differences in background and life experience, communication styles, interpersonal skills, education, functional expertise and problem-solving styles. Our approach recognises that individuals are important and that each person has a unique contribution to make. The benefits of diversity are maximised when each person feels included and able to participate fully. Diversity and inclusion at Newcrest are business imperatives. The Company s approach is based on four key drivers: our vision to be the Miner of choice ; our desire to attract, recruit, engage, develop and retain diverse talent; our belief that our workforce should reflect the communities in which Newcrest operates; and a high performance culture to deliver leading industry performance by encouraging our people to incorporate creativity, innovation, continuous improvement and a high standard of ethics and effort into their work. Underpinned by the Company s values, the Diversity Policy outlines how Newcrest supports a diverse workforce including treating employees fairly, setting measurable targets, ensuring legislative compliance and supporting diversity in its communities. The Diversity Policy actively promotes a culture that values difference. In 2010, the Newcrest Board established measurable objectives for achieving greater diversity at all levels of the Company. These externally reportable measures are tabled in the About Newcrest Mining section of this Report. Our Employee Responsibilities NEWCREST MINING SUSTAINABILITY REPORT

44 Our Employee Responsibilities continued In addition, Newcrest has a detailed diversity action plan that sets out the specific actions that are to be taken to deliver improved outcomes. Our Diversity Action Plan includes a number of other measures and specific initiatives to support the development and advancement of a diverse workforce. A key component of this is the training and development programs for employees from local communities near our mine sites. We continue to remain a successful employer of people at entry level roles in sites outside of Australia. However, at these sites, it is more challenging to employ appropriately skilled and qualified candidates from local regions at more senior levels. This is largely due to the underdeveloped education facilities and curriculums in these locations where we work. Our approach to tackle this challenge is to run programs at our offshore locations to develop leadership skills so that existing employees have the opportunity to increase their capability and take on these more senior roles in the future. In particular, the Australian frontline leadership program has been redesigned to target a national PNG workforce and is currently being delivered to predominately national frontline leaders in Lihir. The superintendent program is also now targeting national participants. In addition to this, we have designed a coaching for high performance program, and this program has been piloted in Lihir, PNG. The coaching program aims to provide all potential leaders with practical one-on-one skill in coaching conversations, a critical leadership skill. A number of changes were made during the reporting period, including appointment of a single point of accountability for training at each site, with site trainers reporting to this role and realignment of site-based training functions to technical streams to allow trainers to focus on individual technical disciplines. Further, dedicated safety training teams were established at each site to build our employees safety awareness and capacity, as well as to focus on the safety needs of each site specifically. Graph 10: Total Number of Male and Female Employees by Site (#) FY2013 Cadia Valley Operations Telfer Lihir Operations Gosowong Hidden Valley Bonikro Namosi Project Corporate Office ,248 1,419 2,020 Male (#) Female (#) Exploration and Wafi-Golpu Project unavailable. 42 NEWCREST MINING SUSTAINABILITY REPORT 2013

45 We also documented training priorities and set training targets based on operational requirements. This included reviewing operational and strategic training plans at all levels of the organisation and consulting with key internal stakeholders to develop a suite of system components, including: site-based operational training plans; a Group training plan on a page ; site training plans on a page for Lihir, Cadia and Telfer; site departmental training team key performance indicators (KPIs) and objectives; and KPIs and objectives cascaded to individual trainers across the business (with each KPI linked to productivity improvement). Other key initiatives undertaken during the reporting period included: development of an On Job Trainer (OJT) Program designed to build internal training capability and capacity to conduct specific roles; development of a functional Learning Management System (LMS) to allow Newcrest to identify current competency gaps in the current workforce and respond appropriately through a targeted plan to fill these gaps; development of a Training Program and Portal Development that includes all training programs, standards, procedures, forms and templates; and the consolidation of 1,100 existing training programs into 341 standardised programs to be used across the business. Our Employee Responsibilities These improvements will fundamentally change the way that training is conducted within Newcrest. We are committed to building the capacity of our staff on-site and providing them with the training and tools to deliver what is needed for Newcrest to meet its future production targets. Graph 11: Average Training Employee Level Hours per Employee Level (#)* FY2012 FY2013 Cadia Valley Operations Telfer Lihir Operations Gosowong Bonikro Corporate Office Average hours of training per Senior Executive (#) Senior Manager (#) Manager (#) Senior Professional/Supervisor (#) Technician/Professional/Clerical roles (#) * Data under-reported due to systems not currently being in place to collect the data. Newcrest continues to review its training systems to improve data collection. NEWCREST MINING SUSTAINABILITY REPORT

46 Our Employee Responsibilities continued Training and development at Morobe Mining Joint Ventures Helicopter Landing Officer course training. The training and development of our employees remains an integral part to retaining our employees, as well as providing them with the fundamental tools to safely perform their work more effectively. At Morobe Mining Joint Ventures (MMJV) during the reporting period, skills development and mentoring programs continue to be key focus areas, while a performance improvement program was initiated. Currently at MMJV, a three-year training plan is in place until 2015, which includes localisation of key positions to be completed during this period. A three-year training plan targeting exploration activities was also reviewed at the commencement of the reporting period. Due to the challenges in acquiring competent heavy equipment operators in PNG, the MMJV continues to focus its efforts on training and mentoring employees from local landowner areas of Hidden Valley. The Leadership Development Program, which was initiated in 2010 and primarily focuses on building team management skills, continued during the reporting period. This program encompasses management and employee appraisal training and is offered to managers, superintendents, coordinators and supervisors. During next reporting period, MMJV plans to deliver formal leadership training to its employees. MMJV also developed a supervisory development program in FY2013, focusing on technical skills, effective workplace team management and professional development. Specifically, a key component of this program on career progression equips employees with the necessary skills required for continuous individual improvement. At Hidden Valley, this will enable a clearer relationship between the criteria relevant to our business goals and the professional development of our employees. 44 NEWCREST MINING SUSTAINABILITY REPORT 2013

47 Operations NEWCREST MINING SUSTAINABILITY REPORT

48 Operations continued Cadia Valley Operations The Cadia Valley Operations (CVO) are located in central western New South Wales, Australia, 25km south-west of the city of Orange and 250km west of Sydney. CVO is 100 percent owned by Newcrest. CVO comprises the Cadia Hill open pit, Ridgeway underground and Cadia East underground mines. The Cadia Hill gold-copper porphyry deposit was discovered by Newcrest in Gold was first produced in 1998, and after 14 years of operation, the Cadia Hill open pit mine was placed in care and maintenance at the end of June Stockpiled open pit material is available for processing, and technical studies of future mining options for the remaining Cadia Hill Ore Reserve will continue. The Ridgeway gold-copper mine, discovered in 1996, is located three kilometres from the Cadia Hill open pit. Production commenced from the underground sub-level cave in April 2002, and in 2010, Ridgeway transitioned to a block cave operation beneath the original sub-level cave. The Cadia East deposit is a porphyry zone of gold-copper mineralisation adjacent to the eastern edge of the Cadia Hill ore body. It was discovered before Ridgeway and is one of the world s largest gold deposits. The Cadia East underground panel cave mine will be Australia s largest underground mine, with a mine life of more than 30 years. The Cadia East project commenced construction in April 2010 and comprised the development of the Cadia East underground panel cave mine and the expansion of the existing Cadia Valley processing plant capacity to 26 million tonnes per year. Commercial production levels were achieved in January 2013, and annual production from Cadia Valley operations is expected to increase to around 700, ,000 ounces of gold and 90,000 tonnes of copper in the coming years. Development of the second Cadia East panel cave, Panel Cave 2, is ongoing. Waste management, Cadia Valley Operations. 46 NEWCREST MINING SUSTAINABILITY REPORT 2013

49 E-A-R fit program Operations Cadia East underground maintenance workshop. Cadia Valley Operations (CVO) recognises that noise exposure readings in mining operations are often well above the action level and that the use of personal hearing protection is an important risk control. Other forms of noise control are limited in their ability to effectively prevent severe hearing losses in mining employees, particularly in ore treatment, underground and surface production occupations. A risk management approach to hearing conservation, including the identification, assessment, control and regular review of controls, is essential to ensure healthy hearing. The generic use of a Class 5 earplug is no longer considered effective, unless consideration of personalised anatomy and physiology, in conjunction with a lack of training of appropriate fitting of the earplugs, is taken into account. E-A-R fit checking is a means of measuring the effectiveness of personal hearing protection worn by at-risk employees and provides a medium for training and education in the proper fitting of earplugs as required in WHS Regulations. E-A-R fit does not rely on subjective testing, as it provides unequivocal results of the personal fit of appropriate hearing protection. The test is performed one-on-one and takes between five minutes for a pass test and up to 30 minutes for workers who fail to meet the standard of <82 db per 12 hour shift. Many workers reported a penny drop moment when they were finally able to fit their earplugs correctly even after many years in the industry. All personnel with exposure levels greater than the action limit ( 82 db) must participate in the hearing conservation program, which includes E-A-R fit checking. Provision of a variety of earplugs to suit the individual worker is available in all operational areas. CVO has committed to an ongoing PPE protection program in 2014 and beyond. The E-A-R fit program is providing a higher confidence factor in the PPE program at CVO. This was never more evident than during the introduction of the Horidiam project in Horidiam is a variation on the commonly employed raise-bore, strip-and-line technique used for the sinking of large-diameter ventilation shafts up to 1,000m deep. Noise surveys measured up to a peak of 117 db with all drills/reamers in operation and an average of 110 db over a shift. The engineers and MacMahons crew were all E-A-R fit tested to assess compliance to effective attenuation of their preferred personal ear protection. Results showed that half the crew needed instruction on the correct fitting of earplugs. Over 30 percent were wearing the incorrect earplugs to reduce their noise protection factor to within the standard. One employee failed all E-A-R fit testing and was issued with Class 5 earmuffs to reach the 33 db attenuation required to protect him from noise induced hearing loss. The project coordinator stated that the process was a simple and effective way to reduce the risk of high noise level exposures for the crew. NEWCREST MINING SUSTAINABILITY REPORT

50 Operations continued Telfer The Telfer gold-copper mines are located in the Great Sandy Desert in the Pilbara, Western Australia, approximately 400km south-east of Port Hedland. The Telfer mines are 100 percent owned by Newcrest. The original Telfer mine commenced in Ongoing exploration identified a large, low-grade oxide Mineral Resource in Main Dome and to the north-west in West Dome, resulting in a mill expansion in 1986 and a dump leach operation from Additional reefs on the eastern flank of Main Dome were identified in the 1990s and mined using narrow vein underground techniques. Mining operations at Telfer were suspended in 2000 due to escalating costs and a gold price around A$300 per ounce. Construction of the current operation commenced in early 2003, following a comprehensive feasibility study. Telfer now comprises two mines: Telfer Open Pit, including Main Dome and West Dome pits, and Telfer Underground, a sub-level cave mine beneath the Main Dome open pit with a 6 million tonne per year shaft hoisting system. Ore is combined in a large, twin train, flotation treatment plant with a capacity to process around provide 22 million tonnes per year, which produces gold doré and a copper-gold concentrate. Weed eradication The development and commencement of a weed eradication program was a key focus over the reporting period. An issue with noxious weeds emerged on and around our site (including Kapok and Buffel). These weeds threaten natural spinifex grounds in the region, which provide shelter and food for native wildlife, as well as playing an important role in supporting a healthy ecosystem. Key to this program has been the inclusion of the Martu people, the traditional owners of the region. Before commencing the weed eradication program, this group completed a four-day spray chemical training course to provide them with the knowledge and ability to safely prepare and apply chemicals and to use relevant equipment appropriately. The group participants are now certified and have the opportunity to use this knowledge for future employment once the Telfer weed eradication program has completed. A weed eradication program was trialled last year and the success of those trials led us to develop a more comprehensive weed reduction program. On-site, the Martu have been of great value in sharing information about the trials and what could have been done differently. The Newcrest environment team has also been fortunate to learn from their knowledge of the local flora and landscape and incorporate some of this knowledge into existing environmental management programs. The weed eradication program was implemented during the reporting period, and the Martu are now engaged on a monthly basis to assist with ongoing management of weed species on-site. This program will continue in the coming year as we look to better control noxious weeds on and around the Telfer site. Over time, we are confident of being able to eradicate these species and rejuvenate these areas with natural flora to re-establish a healthy natural ecosystem. Telfer. 48 NEWCREST MINING SUSTAINABILITY REPORT 2013

51 Lihir Operations The Lihir operation is located on the island of Niolam, 900km north-east of Port Moresby in the New Ireland Province of Papua New Guinea. The Lihir deposits are located within the Luise Volcano Caldera on the east coast of Niolam Island. The Luise Caldera is an extinct volcanic crater that is geothermally active. Lihir is one of the world s largest gold deposits, with an operational life projected to exceed more than 30 years. The Lihir operation is 100 percent owned by Newcrest, following the acquisition of Lihir Gold Limited (LGL) in August The Lihir deposit was discovered in 1982 and extensively drilled prior to commencement of construction in 1995 and the commencement of gold production in May The operation employs a conventional open pit mining method comprising drill, blast, load and haul, and comprises a single ore body with three linked open pits: Minifie, Lienetz and Kapit. Ore is predominantly refractory sulphide ore, which is treated using autoclaves and a pressure oxidisation process before the gold can be recovered by a conventional leach process. A major expansion of the Lihir process plant was completed in FY2013, which substantially replicated the existing process stream, including installation of an additional autoclave and milling equipment, oxygen production capacity, leaching capacity and flotation. This is designed to increase throughput and provide greater operational flexibility in treating the different ores and stockpiles within the Lihir system. Operations Lihir process plant. NEWCREST MINING SUSTAINABILITY REPORT

52 Operations continued Training programs at Lihir Coaching for high performance. Female Lihirian haul truck graduates. There continues to be a focus on leadership and operational training programs at Lihir. A framework for leadership development at all levels has been developed. It is anticipated that the framework will support Newcrest s goal of achieving an increase in the representation of locals in all levels across the organisation. Programs providing employees with formal training in management and leadership have been provided during FY2013 and will continue into the next reporting period. These include: Coaching for high performance This program aims to strengthen leaders confidence, competence and accountability so they can more effectively optimise the skills of their people. This applied skills program has strong links to the Lihir Frontline Leadership program in equipping leaders to coach their people to transfer learning on-the-job. During the program, participants develop and practice their skills in conducting effective coaching conversations, improve their communication skills and strengthen their capability in developing people for improved overall performance. Outage supervisor development program This program has been designed to provide a comprehensive understanding of the Newcrest Outage Management System and provide key supervisory skills to Outage Supervisors. The program aims to explain and identify the components of the Outage Management System, improves supervisory skills in leading a team of outage technical professionals and introduces a number of supervisory tools that assist in addressing issues and challenges during an outage. Lihir Frontline Leadership (LFL) The Lihir Frontline Leadership program is designed to build the skills of supervisors and other leaders so that they are better able to support the workforce and achieve the organisation s goals. The Newcrest LFL is a significant initiative in enhancing business improvement while optimising performance. The program sets an example in terms of the Newcrest values and behavioural standards. The key skills developed are around leading a frontline team to deliver on key results areas, creating an environment of trust and positive engagement, managing the performance of teams, leading continuous improvement and managing change. Leaders will be better equipped to support the workforce and achieve Newcrest s goals. 50 NEWCREST MINING SUSTAINABILITY REPORT 2013

53 Hidden Valley Hidden Valley is a gold and silver mine located approximately 90km south-west of Lae in the Morobe Province of Papua New Guinea. Regionally, the goldfields district of the Morobe Province covers a portion of the Papuan Orogenic belt, which hosts a number of world-class gold and copper-gold deposits, including Porgera and Ok Tedi. Hidden Valley is owned by the Hidden Valley Joint Venture, one of three unincorporated joint ventures between subsidiaries of Newcrest and Harmony Gold Mining Company Limited, collectively known as the Morobe Mining Joint Ventures. The Hidden Valley Mine consists of the Hidden Valley Kaveroi and Hamata open pits located approximately 6km apart, and an ore processing facility situated in steep, heavily forested, mountainous terrain. Both pits employ conventional load and haul mining techniques. The ore treatment plant was commissioned in August Tailings from the processing plant are treated and stored in a purpose-built engineered Tailings Storage Facility (TSF). Hidden Valley is the first major open pit mine in Papua New Guinea to build a TSF to contain all tailings permitted under the Environment Act In May 2010, construction and commissioning of the Hidden Valley operation was completed and the production ramp-up commenced. Operations Safety performance at Hidden Valley Safe vehicle operation and aviation activities continue to be ongoing challenges at Hidden Valley. Due to the terrain and the level of safety awareness among workers, Hidden Valley has identified vehicle operation as its primary safety risk. As a result, a vehicle focus group was established, and a risk workshop organised to identify necessary improvements. Some improvements identified from this workshop included: Increasing the use of data from an in-vehicle monitoring system and installing live tracking systems in some vehicles. Reviewing and improving road signage and conditions where possible. Forming a dedicated traffic-focus group to monitor the behaviour of drivers. Improving escort control for delivery convoys. Providing education sessions. Activities, such as reviewing and updating traffic management plans and driver competency assessments, remain ongoing at Hidden Valley, with the development of relative procedures and audit protocols currently underway. Aviation activities are considered a key risk for Hidden Valley. Towards the end of FY2013, a review was completed on third-party providers and their alignment to the basic aviation risk standard. While no immediate flight or safety issues were identified, a series of recommendations for improvement were made. Road safety billboard at Zenag farm along the Lae-Bulolo highway. NEWCREST MINING SUSTAINABILITY REPORT

54 Operations continued Gosowong The Gosowong operations are located on Halmahera Island, Indonesia, and are owned and operated by PT Nusa Halmahera Minerals, an incorporated joint venture company, which is owned by Newcrest (75 percent) and PT Aneka Tambang (25 percent), a company listed on the Indonesian Stock Exchange and the ASX. PT Aneka Tambang increased its stake from 17.5 percent to the current 25 percent in December Gold mineralisation at Gosowong was discovered by Newcrest exploration in 1993 and comprises multiple high-grade epithermal deposits. Mining operations commenced in 1999, initially from the Gosowong open pit and subsequently from the Toguraci open pit. Decline development at the high-grade Kencana underground mine commenced in July 2005, with ore production commencing in March 2006 and continuing to the present day. A further cutback of the Gosowong open pit commenced in October 2010 and was completed in the June 2013 quarter. The Toguraci underground mine is the second underground project developed at Gosowong, with first ore production in September The processing plant at Gosowong has a capacity in excess of 800,000 tonnes per year. The Gosowong Province remains highly prospective, and exploration activity to identify further epithermal vein structures and link zones is ongoing. MalCon program at Gosowong Gosowong is owned and operated by PT Nusa Halmahera Minerals (PTNHM), in Indonesia. The Gosowong mine is located within a malaria-endemic area of Indonesia, and due to the high risk of contracting malaria, a Malaria Control (MalCon) program was formed to minimise malaria incidence within the mine site footprint. During the continued development of the MalCon program, the team has established various mitigative strategies across the site, resulting in a significant reduction in malaria cases. A number of control measures have been implemented, targeting both vector (mosquito transfer of malaria) control and prescribing personal measures as part of the MalCon program. These measures include: Vector control Hazard reporting conducted by employees and during monthly mosquito larval surveillance. Larvae breeding sites are treated with larvicide, providing immediate action. Large larvae breeding sites are reported to the Health Specialist, and the site is either managed via filling, draining activities or introducing local fish to help control the site. Indoor residual spraying conducted on all buildings within the work and housing areas. Regular inspections and maintenance (where required) conducted of screens on buildings. In some circumstances, thermal and ULV fogging is used by the MalCon team. A metre clearing of vegetation surrounding site camps is performed every two years to minimise resting sites and enable breeding sites to be easily identified, as well as regular herbicide application to maintain the cleared area. Insecticide treated mosquito nets (ITN) and long-lasting insecticidal nets (LLIN) are provided to employees and local health care centres for distribution. Residual wall spraying. Personal control Training and awareness packages. Chemoprophylaxis (a preventative method of malaria control using malaria medication) is provided to employees. Malaria kits are provided to employees living in non-endemic locations, e.g. expatriates, who may have limited access to appropriate medical facilities or medicines. These kits contain treatment medicine, as well as finger prick blood tests to check for the presence of malaria. Effective repellents are provided for employees. PTNHM aims to continually improve upon these malaria control methods. In addition, PTNHM appreciates the importance of effective communication and education, and seeks to provide employees and local community members with regular up-to-date information and guidance to assist in minimising personal exposure and, overall, malaria incidence at Gosowong. 52 NEWCREST MINING SUSTAINABILITY REPORT 2013

55 Bonikro The Bonikro operation is located in the central-southern portion of the West African nation of Côte d Ivoire, approximately 250km north-west of the commercial capital of Abidjan. The Bonikro operation is owned and operated by LGL Mines CI SA, an Ivoirian company in which Newcrest holds percent, following the acquisition of Lihir Gold Limited (LGL) in August Minority interests are held by the Cote d Ivoire Government (10 percent) and the residual interest is held by a minority shareholder. Construction of the Bonikro mine began in May 2007, with gold production commencing in October The operation employs a conventional open pit mining method comprising drill, blast, load and haul. The predominant method of gold recovery is via carbon in leach technology, with some gold recovered via a gravity circuit. A growth option to expand the plant at Bonikro remains viable, but has not been approved at this point. Newcrest is exploring numerous prospects within 30km of the Bonikro mine that have the potential for additional ore supply. In addition, Newcrest holds rights to a very large regional package of exploration tenements in Côte d Ivoire acquired through the acquisition of LGL in August Operations Community engagement for sustainable development. NEWCREST MINING SUSTAINABILITY REPORT

56 Operations continued Cote d Ivoire s partnership with UNDP UNDP chicken farm project. Bench donation to local school. In mid-2011, a Memorandum of Understanding between Newcrest Cote d Ivoire and the United Nations Development Program in Cote d Ivoire (UNDP) was ratified with the purpose of providing a framework of cooperation and to facilitate collaboration between the Parties, on a non-exclusive basis, in areas of mutual interest. The parties agreed to cooperate in sustainable development affairs, with initial emphasis on the following areas of activity: technical and vocational training for dropout boys and girls; youth employment and implementation of labour intensive projects; community-based infrastructure development; setting up of income-generating activities such as farming, breeding and trading; and any other area deemed appropriate by the parties through mutual agreement. The Company has committed to provide some US$450,000 per annum towards the agreed objectives, which will assist UNDP to manage the selected projects. Moreover, part of the role that the UNPD will play is to mobilise other donor funds to complement the core funding provided by Newcrest. The overall development framework within which the activities are currently being developed and implemented is based on an official Local Development Plan, conceptualised by the local stakeholders with the technical and financial support of the government, UNDP and Newcrest. This plan covers the region within which the Bonikro mine is situated. Major activities for 2013 were: Activity Expenditure (US$) Agro-pastoral micro business 28,818 Hiré town sanitation and maintenance 182,410 Agricultural development of low land areas 6,850 Extension of local high school 68,125 Creation of local radio station 63,660 Local capacity development 39, ,354 In 2013, 90 percent of budget funds were provided by Newcrest, the residual being provided by the UNDP and the local government. It is planned that additional funding will be mobilised from UNDP and other donors in Hiré Town Hiré is a township of some 40,000 people, which is located approximately 15km from the Bonikro mine. The Hiré town has developed rapidly in recent years, and much of the growth has been driven by the nearby Bonikro mine, as well as other mining activities in the region. At this stage, the facilities and services in Hiré are simply not adequate to cope with the population, and thus the town sanitation and maintenance project is a major capacity-building exercise to facilitate adequate waste management and drainage controls to ensure an acceptable level of public health is maintained and the overall management and control of the town can be upgraded to meet the needs of the local population. The Newcrest-UNDP sanitation project aims at achieving a fundamental revaluation and re-education on how a micro-society should manage their wastes in a developing urban setting where people are not fully educated in the management of modern waste. The other programs for 2013 are aimed at improving the economic activity in the region and in upgrading the local education institutions. They include income-generation and food security activities such as fish-farming, chicken and pig-farming, rice-growing and creation of a rural radio station to service communities relying mainly on voice media because of low literacy rate, etc. The program has resulted so far in the creation of hundreds of jobs in the surrounding communities and this will continue to be a focus into next year. In summary, this partnership, which is unique in concept and is a first of its kind for Newcrest, is turning out to be quite promising as it mobilises the expertise in development work (a key strength of the UNDP), acting as a catalytic agent between Newcrest and the community stakeholders, effectively streamlining the sustainable development process. 54 NEWCREST MINING SUSTAINABILITY REPORT 2013

57 Projects NEWCREST MINING SUSTAINABILITY REPORT

58 Projects continued Wafi-Golpu Wafi-Golpu, located in the Morobe Province of Papua New Guinea, approximately 65km south-west of the town of Lae, is an advanced exploration project owned by the Wafi-Golpu Joint Venture (WGJV), one of three unincorporated joint ventures between subsidiaries of Newcrest and Harmony Gold Mining Company Limited, collectively known as the Morobe Mining Joint Ventures. Wafi-Golpu comprises an extensive body of gold-only epithermal style mineralisation (Wafi) and deeper porphyry related copper-gold mineralisation (Golpu and Nambonga). Spatially, the Golpu and Wafi deposits are located in close proximity to each other. The Golpu deposit is located immediately north of and below the Wafi deposit. The Nambonga porphyry mineralisation is located to the west of the Wafi-Golpu diatreme. A technical pre-feasibility study completed in August 2012 confirmed Golpu as one of the world s largest undeveloped resources. Study work continues, with a focus on reducing start-up capital, improving ore body knowledge and engaging with all stakeholders. The Golpu development option has the potential to underpin production growth at Newcrest in the next decade. Namosi Namosi, located approximately 30km west of Fiji s capital, Suva, is an advanced exploration project. It is centred on a district that has been periodically explored over the past 40 years and is highly prospective for copper-gold porphyry systems. Namosi is one of the largest porphyry copper systems in the Pacific Islands. Newcrest has a percent interest in the Namosi unincorporated joint venture and is the manager of the joint venture. Activities have been focused on the large Waisoi copper-gold deposit, the mineralised Waivaka Corridor, the Wainabama copper-gold prospect and a portfolio of early stage exploration targets. The Waisoi Project is a copper and gold project in the pre-feasibility phase, with a study underway to evaluate development alternatives. This includes an environmental and social impact assessment of the potential impacts of a mine at Waisoi and to help the joint venture and the Fijian Government decide if the Waisoi Project can be built and operated in a safe, economical and environmentally responsible way. The Namosi Joint Venture contributes to the Fijian and local economies in a number of ways, including through the engagement of services, employment of people, payment of rents and rates to government, payment of compensation to local landowners, and implementation of community support and educational assistance programs. It sources some of its goods and materials from large local supply chains, mindful of balancing the use of suppliers in the community wherever the capacity and resources are available. Land rental and compensation payments, as well as investments in public infrastructure, community projects and other donations, are part of Namosi s approach to contributing to the local economy. A compensation and access agreement with the Tikina Namosi Landowners Committee (TNLC) includes a dispute resolution process. Namosi employs more than 40 permanent and semi-permanent local employees and there are six specialist expatriates also working on the project. Local people are employed where relevant skills and experience are available, and training and development is provided where needed. 56 NEWCREST MINING SUSTAINABILITY REPORT 2013

59 Resumption of exploration studies and Rehabilitation Action Plan Projects Rehabilitation of access track. In September 2012, Newcrest resumed exploration activities and the Waisoi Project Environmental Impact Assessment (EIA) continued following an announcement by Prime Minister Commodore Vorege Bainimarama. Exploration had been halted in early 2012 following concerns from the local community that the exploration activities were causing harm to local environments and communities. These perceived impacts were associated with both historical exploration activity undertaken over the past 40 years of exploration on the SPL area and current practices. There were a number of other issues that also were brought to the attention of government that landowner/community members were unhappy with (e.g. unresolved boundary disputes). Exploration activities require rehabilitation to restore the land to its pre-exploration state. During the reporting period, Newcrest developed and implemented a Rehabilitation Action Plan (the Plan), which saw us deliver some impressive results in regards to the rehabilitation of historic and current drill pad sites, landslips and access tracks. Revegetation efforts at these sites are showing success to date. The Plan also dealt with the range of other issues raised by the landowners and community. We developed the Plan by working together with a range of stakeholders and had it signed off by all parties for implementation. Some of the key elements of the Plan include: at the completion of drilling, the hole is plugged and capped to ensure no water is flowing from the collar to the surface; the drill rig together with support equipment is taken off the drill pad to the next site; liquid is removed from the sumps, which are then backfilled before earthworks commence to reshape drill pad; and topsoil is respread before the planting of ferns and trees. Once drilling and rehabilitation has been completed at the site, we invite relevant landowners to review this and gain their approval that the rehabilitation has been completed appropriately. In addition to rehabilitation, we focused on a range of initiatives during the reporting period to allow us to better engage and communicate with local stakeholders. Some of the key activities undertaken included: an organisational restructure, which clarified reporting lines and increased accountability for operational outcomes; several new appointments, including a Country Manager, Earthworks Superintendent and Community Relations Manager, four additional Community Relations Officers, and two additional Land Access and Compensation Officers. These were made to provide greater resources to conduct face-to-face engagement with local stakeholders; and a new Cultural Awareness Training Program for all employees and contractors to ensure they understand and respect the protocols, traditions and customs of the Namosi people. We are confident that our work during the reporting period places us in a stronger position to continue to undertake our exploration and further investigate the feasibility of the Waisoi Project in an environmentally and socially responsible way. We understand the value of greater community consultation and will continue to work closely with local landowners, government and other community groups in the coming year. For further information, please visit the Namosi Joint Venture website at NEWCREST MINING SUSTAINABILITY REPORT

60 Exploration Newcrest s exploration team seeks to grow our minerals resource base and Ore Reserves through exploration, innovation and collaboration. The primary goals of the exploration program are to sustain our existing operations through new discoveries, and efficient conversion of resources to reserves and to discover new provinces that will deliver the next generation of operations. During the reporting period, there was a significant decrease in exploration activity. Newcrest s exploration focused on discovering new zones of mineralisation at Gosowong, searching for higher value underground resources at Telfer and completing additional resource definition drilling at Golpu. Exploration drilling was also completed at Namosi and Côte d Ivoire. The key highlights for the exploration completed during the reporting period were: discovery of the Salut vein at Gosowong, drilling has confirmed the presence of high-grade mineralisation; drill testing of the West Dome Deeps exploration target; Golpu resource definition has significantly improved the understanding of the ore body; at Namosi, drilling below the Wainoulo resource has intersected high-grade mineralisation, which highlights the potential to grow the existing resource; within the Bonikro district, drilling has returned new high-grade intercepts potential to increase the present resources; and exploration was ongoing within Morobe Exploration Joint Venture. As our exploration sites are increasingly outside of Australia and within complex social contexts, it is increasingly important that we develop the expertise to not only seek out new reserves, but also to develop relationships. Our experience at Namosi, and the significant progress made there in regards to improved community relations, has provided the exploration team with important learnings. These include placing a greater emphasis on engaging and communicating effectively with local stakeholders and ensuring that our exploration activities do not advance beyond the expectations of those surrounding the drilling sites. During the coming year, the Newcrest exploration team will be investing in its internal processes and systems as we look to further build our internal capacity. This will allow us to be well-placed when we once again expand our exploration activities in coming years. Another focus for the coming year is to continue to develop Newcrest s internal knowledge of potential exploration sites around the world. Our work at present is focused on Australia, south-east Asia and the Pacific region. We believe we have a very strong understanding of prospective gold opportunities in these locations, and, as a result, have commenced building an understanding of other gold belts around the world. Wafi 58 NEWCREST MINING SUSTAINABILITY REPORT 2013

61 Assurance Statement NEWCREST MINING SUSTAINABILITY REPORT