During 2006, Group companies worked to entrench environmental management systems and ensure that we have the means to deliver against our targets. Activity focused on energy efficiency, reducing energy intensity, improving water management and continuing to evaluate operational biodiversity action plans.

Anglo Platinum’s PPRust mine is currently involved in a biodiversity offset pilot project, which is assisting international NGOs and ecologists develop a robust methodology for mitigating impact on biodiversity in one area by investing in conservation elsewhere. Three areas close to the mine were identified as potential offset areas. These are among the few examples of Savannah biome left in the area. Much of the surrounding area has been degraded through wood collection, grazing and crop production. The objective of this offset programme is to establish a community-owned reserve to maintain and, where necessary, improve the diversity and functioning of the system and provide an income from breeding threatened species of game, promoting tourism and by the establishment of a training centre. Unresolved land claims exist on portions of the offset areas, but it is believed that the claimants could be integrated into the management of the offset areas, with benefits beyond the life of the mine.

At a policy level, the Group has been engaged, both internally and through collaborative partnerships, in developing and testing new thinking on biodiversity offset programmes, developing norms for mine planning and closure, which have sustainable development principles at their core, and working on tools to create water inventories.

Regulatory environment

The pace of regulatory and legislative change continues to be a concern in many of the regions in which we operate. In South Africa, a number of operations are waiting for water-use licences to be issued. Forthcoming changes in UK waste legislation have implications for Tarmac’s quarry waste. In addition, the effect of a number of new EU directives will have to be investigated.

Environmental incidents

All operating companies report annually the number and severity of environmental incidents. Level 1 incidents have only minor impacts or short-term effects and form the bulk of those reported. They are a useful indicator that our environmental management systems are functioning effectively. In 2006 9,313 Level 1 incidents were recorded (9,169 in 2005). These are managed at operational level.

The Group recorded 176 Level 2 incidents in 2006 (174 in 2005), with 137 of these in core businesses. Many of these, throughout the Group, were water-related and are discussed in more detail on Water use. We have not experienced any Level 3 incidents, which have significant impacts or long-term effects. Our business units set internal targets and introduce controls to reduce the likelihood and consequences of future incidents.

Legal actions

During 2006, Group operations paid over $42,000 ($29,292 in 2005) in environment-related fines and recorded a number of warnings and legal actions. Anglo Industrial Minerals paid fines for exceeding noise levels in China, for dust problems in Poland and the Czech Republic and for late response to issues raised during an official inspection ($3,302). In the UK, a number of warnings and enforcement actions were issued. Anglo Base Metals recorded 19 minor environmental legal actions for the reporting period and paid fines of $24,888.

Certification

About 86% of the Group, measured by turnover, is certified to ISO 14001 (or equivalent such as the Forest Stewardship Council). The remaining Tarmac operations will be certified by December 2007. New operations are required to achieve certification within two years.

Awards

A number of business units received awards for environmental performance during 2006:

• Anglo Coal South Africa’s Isibonelo colliery and Anglo Platinum both won Nedbank Green Mining Awards.
• Vergelegen won two Mail & Guardian Greening the Future awards for improved environmental practice and its work on water. It has also been recognised by the wine industry as a biodiversity champion.
• Anglo American Chile and Mondi’s Richards Bay mill won energy efficiency awards (see Energy use and Climate change).
• Mondi Business Paper received a WWF Panda Award for its efforts to certify more than one million hectares of forest in Russia to the Forest Stewardship Council standards.

Competition for resources

Anglo Platinum has formed a partnership with the South African Department of Water Affairs and Forestry and other mining companies active in the eastern limb of the Bushveld complex in Limpopo province, to secure essential water resources for its operations. The De Hoop dam will service some 21 mining companies and approximately a million people in several towns and rural communities including Polokwane and Mokopane.

Construction will commence in April 2007 on the R5 billion ($0.7 billion) dam. Costs will be borne by the South African government and recouped over 20 years from users. Approval was granted by the Department of Environmental Affairs and Tourism in October 2006, after a lengthy appeal process focused mainly around the impacts of damming on downstream users and ecosystems. It is, however, understood that not all stakeholders have accepted the decision and further appeals are possible.

Construction is expected to be completed within four years, with the dam fully operational by 2014. As a result of projected water shortfalls prior to 2014, Anglo Platinum is considering the construction of a dam on the Richmond farm to source the additional water. The Environmental Impact Assessment (EIA) process has commenced and focus group meetings with stakeholders have been planned to ensure that all concerns and impacts are appropriately managed.

Air quality

Emissions of sulphur dioxide (SO2) from processes amounted to an estimated 136,000 tonnes in 2006 due to the inclusion of estimates of emissions from fossil fuels. Without the inclusion of fossil fuels, the process emissions would have increased from 60,198 tonnes in 2005 to 67,056 tonnes in 2006. Emissions related to fossil fuels arise from 24 operations. Meaningful emission reduction targets will be set at site level.

Anglo Platinum’s Waterval Smelter, previously the largest emitter of SO2 in that business unit, further reduced its emissions by 24% to 16 tonnes per day (21 tonnes per day in 2005) which is within compliance requirements. Seven stationary monitoring stations record SO2, particulate matter and meteorological data on a continuous basis. There were only three exceedances of the hourly SO2 guideline of 135 parts per billion.

Anglo Platinum’s Paardekraal and Mfidikwe monitoring stations recorded most of the high particulate matter concentrations. The most significant sources of these emissions at Paardekraal are the tailings dam, unpaved roads, crushers and domestic coal burning, while the key source at Mfidikwe appears to be domestic coal burning during early mornings and late evenings in winter.

Anglo Platinum has invested R45 million ($7 million) in a wet scrubber to further control boiler emissions and improve local air quality.

Land use management

Land used by operations for mineral extraction, processing, infrastructure and industrial use was 86,203 hectares at year end. This total excludes land used by Hippo Valley and Exxaro, both of which had by then left the Group. Mondi had 1,9 million hectares of land under company charge in its South African forests and the logging area in the Komi Republic in Russia. Anglo Platinum owns large tracts of land but is presently using a relatively small section for mining and infrastructure.

Land rehabilitation is an ongoing activity and all operations are required to review regularly and update their closure plans, which must be costed. A mine closure toolbox, which integrates social, environmental and economic aspects of closure, is being tested at operational level. Anglo Coal has fully rehabilitated 1,780 hectares of the 15,807 hectares disturbed for mineral extraction. A rehabilitation project at Goedehoop colliery was completed and downstream water quality and the surrounding flora and fauna are being monitored.

At Anglo Base Metals’ Loma de Níquel site in Venezuela, various restoration techniques are being tested to speed up the regrowth of vegetation on land disturbed by its nickel mining operations. Revegetation is particularly challenging on steep slopes, where young plants are easily washed away in heavy rain. The techniques being tested include using mesh over the topsoil and compost to hold young plants and grass seed in place and, on very steep slopes, the plants are grown in bags of soil which are anchored for stability. Loma de Níquel sources plants for rehabilitation from a community nursery which it helped to establish.

Environmentalists are studying natural biodiversity and indexing species for their importance in reforestation.

Anglo Coal South Africa has an active land rehabilitation programme. Ecologist Johan van der Walt inspects a rehabilitated pit area at Kriel colliery where grass species have started to diversify.