sustainability report 2010 - investis...

SuStainability RepoRt 2010

Contents

03 Scope of the Report04 Letter from the CEO06 Sustainability Impacts, Risks & Opportunities08 Economic Contribution10 Performance Summary12 Safety16 Health18 Environment 22 People24 Community and Society27 Report Verification

Nyrstar Sustainability Report 2010 3

Nyrstar is a leading global multi-metals business, producing significant quantities of zinc and lead as well as other products including silver, gold and copper. Zinc is our primary focus. Our operations and activities are located in Western Europe, Australia, the USA, Peru and China. This is our third annual Sustainability Report and includes information on our performance for the 2010 calendar year, our third full year of Nyrstar operation. We apply Nyrstar Group policies and procedures at all our Nyrstar operations and activities, including Joint Ventures where we have management control. However, the safety, health and environment performance data in this report generally only includes our six major wholly Nyrstar owned smelter sites and Tennessee Mines, as our Peruvian mining assets were either not operational or not under Nyrstar control for most of the year. We describe our approach for both mines and smelter sites going forward, as these activities present the material and significant sustainability risks and opportunities for the Company. these facilities, their main activities and locations are:

OperatiON (‘000 tonnes)Site emplOyeeS lOcatiON

auby zinc smelting Zinc metal 163 287 FrancebaleN / Overpelt zinc smelting, alloying & oxide washing Zinc metal 281 592 Belgiumbudel zinc smelting & alloying Zinc metal 264 439 the NetherlandsclarkSville zinc smelting & alloying Zinc metal 120 255 Tennessee, USAcOricaNcha mining & production of zinc, lead,

copper & gold concentratesZinc in concentrates 1Lead in concentrates 0.6Silver 0.0063Gold 0.00016

834 Peru

cONtONga mining & production of zinc, lead, copper & gold concentrates

Zinc in concentrates 2Lead in concentrates 0.1Copper in concentrates 0.2Silver 0.0022

426 Peru

hObart zinc smelting & alloying Zinc metal 247 479 Tasmania, AustraliapOrt pirie multi-metal smelting Lead metal 179

Zinc metal 32Copper cathode 4Silver 0.4 Gold 0.0007

705 South Australia, Australia

teNNeSSee miNeS mining & production of zinc concentrates Zinc in concentrates 63 677 Tennessee, USA

Scope of the Report

This document should be read in conjunction with the Nyrstar Annual Report 2010, which provides specific information about the company, its operations, management, business structure and governance arrangements.

Other Nyrstar public reports, including the 2010 Annual Report, a GRI Content Index for our Group level sustainability reporting, and previous years Annual Reports and Sustainability Reports are available on our website: www.nyrstar.com

For further information about Nyrstar or about this report please send your question via email to [email protected]

We have prepared this report considering the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines (Version 3, also known as the G3 Guidelines) and intend for our reporting to qualify for GRI Report Application Level B+.

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letter from the ceO Nyrstar is a leading global multi-metals company, producing significant quantities of essential resources - zinc and lead as well as silver, gold and copper. Our primary focus is zinc. During 2010 we continued to deliver on our strategy to expand upstream into mining. Our medium term goal is to produce the equivalent of 50% of our zinc raw material requirements from our own mining operations and streaming agreements. Zinc has an important contribution to make to sustainable development, particularly through the galvanizing of steel to prevent corrosion and extend the useful life of steel structures and vehicles. Zinc has diverse applications in construction, infrastructure, transport, machinery, electronics and consumer products, and is essential for

human health. This makes zinc a highly sought after resource in an ever demanding world. Our Sustainability Report provides us with an opportunity to update our stakeholders on our sustainability activities and performance targets. With the growth of our company and our expansion into mining, we have a broader range of sustainability issues to consider and a broader group of internal and external stakeholders to engage with. 2010 was a year of delivery for Nyrstar. We made further acquisitions of mining operations and we improved the financial, operational, safety and environmental performance of our existing business. Improvements in the global economic environment, zinc production levels, zinc price and the contribution from our new mining assets resulted in an underlying EBITDA of €207 million, more than double the result we achieved in 2009. Our zinc metal production was over 1 million tonnes and we remain the world’s largest producer of zinc. We launched ‘Nyrstar 2020’, an internal program to create the longer term framework for a sustainable business and developed ‘The Nyrstar Way’, a set of seven elements to embed a culture of value creation through innovation and creative thinking. We launched ‘StarNews’ as part of our internal group communications framework, to foster the Nyrstar culture and to share good practices. In the coming year we will develop new internet and intranet sites to improve the way we can work together and communicate our progress. Our focus on social and community issues to date has predominantly been on local site and community-based activities and in response to specific local needs, such as the ‘tenby10’ project at Port Pirie, and the ‘Right to Play’ initiative at Coricancha Mine. During the year we commenced development of a more formal Corporate Social Responsibility (CSR) approach for Nyrstar. Early in 2011 we will launch the Nyrstar Foundation, which will provide the future framework and platform for CSR activities at both a Group and local level. We also started an internal program in support of ‘Zinc Saves kids’, an International Zinc Association (IZA) initiative

Nyrstar Board of Directors (f.l.t.r.) Peter Mansell, Non-Executive Director; Roland Junck, Chief Executive Officer; Ray Stewart, Non-Executive Director; Julien De Wilde, Chairman; Oyvind Hushovd, Non-Executive Director; Karel Vinck, Non-Executive Director.


in support of UNICEF. We continued to make good progress on our Group safety and health programs, with a 30% reduction in the number of smelter recordable injuries, which was particularly commendable given the restart of the Balen smelter. Tragically we recorded a fatality during commissioning activities at the Coricancha Mine. Nyrstar remains fully committed to improving our safety performance across all our operations. We are also pleased to report continued improvement in our environmental compliance performance, with a 19% decrease in the number of smelter recordable incidents. However, we did not make significant progress on air and water emissions and waste, and we will be taking further actions to address these. We worked on projects at Overpelt, Port Pirie and Hobart which

will replace fresh water supplies with recycled water and we also continued to progress projects dealing with legacy issues at our smelters. At the end of 2010, the Port Pirie tenby10 project achieved a result of 72.3 percent of children tested having a blood lead level below 10 micrograms per decilitre, a very significant improvement compared to the 49.6 percent recorded in 2005. In September 2010 we launched the ‘Ten for them’ program as part of Nyrstar’s ongoing commitment to the community blood lead reduction program at Port Pirie. climate change and energy continues to be an important sustainability issue for Nyrstar, due to our smelters being energy intensive and the increase in government policy response to climate change. Most of the energy used at our zinc smelters is electricity, which means that our carbon footprint is mostly determined by the electricity source in the regions that we operate. As energy constitutes approximately 40% of our smelter operating costs, energy efficiency is something that has been, and will continue to be, very important to us. During the year we developed a Nyrstar position statement on climate change and energy, facilitated a renewable energy project on top of closed landfills at Overpelt and approved energy recovery projects which will be delivered at Balen and Hobart in 2011. In the coming year we will continue to deliver our Nyrstar 2020 strategy of further vertical integration into mining, pursuing excellence in the commercial, operational and financial aspects of our existing business, and unlocking untapped value in our current raw materials and byproducts. We will further develop our Nyrstar culture as embodied by the Nyrstar Way, which will support our sustainability initiatives and the integration of new mining operations into our business. By delivering on our strategy we are creating value for our stakeholders and a long term sustainable future Nyrstar’s business. We look forward to sharing more about our sustainability progress in the year ahead. Roland Junck, Chief Executive Officer

Roland JunckChief Executive Officer

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Sustainability impacts, Risks & opportunities

During 2010 we continued to deliver on our strategy of pursuing opportunities in mining, developed a longer term strategy to take Nyrstar into the future and evolved our previous guiding principles on the way we work into the Nyrstar Way. All of these actions are focused on ensuring the sustainability of Nyrstar going forward. Although we saw significant growth and development in Nyrstar over the past year, the underlying sustainability impacts, risks and opportunities facing the business have not changed significantly from what we reported in 2009. We have restated them here for completeness.

Our businessNyrstar is a supplier of metal bearing raw materials, intermediates and commodity grade metals, including zinc, lead, silver, gold and copper. We also produce significant quantities of sulphuric acid. Our customers use our products in further processing and manufacturing activities. Our metal bearing raw materials and intermediates are used by Nyrstar smelters or others to produce metallic products. Key users of our zinc metal products are die-casters and galvanisers, and those of our lead metal are lead-acid battery manufacturers. Sulphuric acid is used in the production of other chemical products such as fertilizer and nylon, and as an electrolyte in lead-acid batteries. Zinc production is our primary focus. Its diversity of applications and uses from construction and infrastructure to transport, industrial machinery, communications and electronics, consumer products and human health will continue to make zinc an essential and highly sought after resource going forward.

Our approach to sustainabilityWe undertake a holistic approach to our business sustainability and this is recognized in our Nyrstar strategy, the Nyrstar Way, our code of business conduct and our business risk management policy. We have an enterprise risk management framework that uses a consistent approach

to identifying and assessing risks and prioritizing actions required for all types of business risk: financial, safety, health, environmental, legal compliance, stakeholders, quality, production and organizational structure. Oversight of enterprise risks and risk management processes is maintained at the Nyrstar Board level. A summary of our key business risks can be found in the Nyrstar Annual Report.

Nyrstar has core Corporate Policies for Safety and Health, Environment, Risk Management and Quality. These policies are translated into the relevant local languages and allow us to integrate operations globally by establishing common business processes and procedures, which underpin the Nyrstar Way and provide more specific guidance for decision making in key sustainability areas. We have Corporate Safety & Health and Environmental assurance processes to allow us to assess our performance and track our progress against sustainability objectives.

key sustainability impacts, risks and opportunities Due to the nature of our business, our key sustainability impacts, risks and opportunities do not tend to change significantly from year to year. The key change to our business in 2010 was the continuation of our expansion in mining, with


the acquisition of Contonga and Pucarrajo Mines in Peru and the announcement of our intention to acquire the Campo Morado Mine in Mexico.

Most of our mines and smelters have long operating histories and although licenced and operated under current legislation, were established at a time when standards were different to what they are today. Our operations are located in regional areas, typically in close proximity to local residents and often form a significant part of the local economy. For our business to be sustainable, we must ensure that we meet the expectations of all our stakeholders, which will continue to evolve over time.

Our key sustainability impacts, risks and opportunities are:

- Creating value by continually reviewing our portfolio of assets, improving returns from existing assets and seeking to grow the business.The zinc and lead industry has historically been characterized by variable returns to shareholders reflecting the lack of industry consolidation and the cyclical nature of commodity metal prices. In order to provide adequate return to our investors, we need to pursue growth opportunities in line with our strategic objectives and continually improve the return on capital from our current assets. Going forward, we will

continue to deliver on our strategy of improving and expanding our existing business whilst selectively pursuing opportunities in mining.

- Ensuring that our activities do not adversely affect the health and safety of people that work at and live close to our operating sites.The first element of the Nyrstar Way is preventing harm - to our employees, the communities around us and to the environment. There are a number of physical and chemical hazards at our operations that we need to identify and understand. To minimise the potential for injury or illness we need to assess and manage the risks relating to these hazards and to ensure the effectiveness of risk controls we have in place. We take a holistic approach to preventing harm which includes addressing workplace equipment and management systems, workforce culture and behaviours, and engaging with our local communities.

- Minimising the impact our production sites have on the local environment by improving current emissions performance and addressing legacy issues.Metals are naturally occurring substances; however emissions from mines and processing facilities can result in elevated levels of metals in the air, soil, groundwater and surface

water around the site. Most of our sites have been operating for many years, so there are potential environmental impacts not only from current activities, but also from historical operations and practices. There are a number of factors which influence whether metals in the environment pose a risk to people or the ecosystem, and these need to be taken into account when prioritizing investments to reduce emissions or to address historical contamination or waste stockpiles.

- Improving our natural resource efficiency, including the use of raw materials, water and energy.Natural resources are extracted by mining to make mineral concentrates. We make metals and acid predominantly from zinc and lead concentrates, however we also process secondary zinc and lead containing materials, which provides a valuable recycling route for by-products of other industries such as galvanized steel recycling. The zinc and lead smelting process is very energy intensive, with electricity used to convert dissolved zinc into zinc metal in the electrolysis process and coke and coal needed for the lead smelting process. Water is used as the primary process medium in making

mine concentrates, and in the leaching and electrolysis stages of zinc smelting. All of these materials have sustainability impacts associated with their supply and use, and industry must be as efficient as possible in their use so as to balance their needs for energy and water with the rest of society.

Progress on our key risks and sustainability issues during 2010 are summarized in the Performance Overview table in the following pages and are discussed in more detail in the various sections of this report.

As in the past year, Nyrstar’s key sustainability challenges in the short to medium term continue to be:

- further transforming the business to deliver on our strategy of pursuing value creation for all our stakeholders.

- meeting the challenges of new legislation and business requirements such as proposed changes to or introduction of greenhouse gas emissions trading schemes and REACh legislation in Europe.

- delivering ongoing improvements in our safety, health and environmental performance and continuing to address historical environmental legacy issues.

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economic Contribution

Nyrstar delivered a strong financial performance for 2010, with results in terms of revenue and profitability both being much improved over 2009 due to record zinc production, a significant first contribution from mining operations and an improved zinc price. Zinc metal production achieved a record level of 1.076 million tonnes, 33% higher than in 2009, due to the return of Balen, Budel and Clarksville operations to full production levels. At the end of 2010, Nyrstar’s Coricancha, Contonga and East Tennessee Mines had reached full production rates. Although ongoing zinc price volatility was seen during the year, the average zinc price during 2010 of US$ 2,159 per tonne was 30% higher than in 2009.

opeRating CoStS by Region (*) (€ millionS)

307 M€, 43% Europe278 M€, 39% Australia128 M€, 18% Americas

Capital Spend by Region (*) (€ millionS)

68.2 M€, 48.4% Americas 35.6 M€, 25.2% Australia37.2 M€, 26.4% Europe

37.2 M€, 26.4% Europe35.6 M€, 25.2% Australia68.2 M€, 48.4% Americas


2008 2009 2010

2,696

1,664

2,410

Revenue fRom exteRnal CuStomeRS (€ millionS)

undeRlying ebitda (€ millionS)

2008 2009 2010

207

93

153

Site opeRating CoStS (*) (€ millionS)

The increased production levels, as well as increased metal prices, resulted in the much improved revenue of €2,696 million and profit result of €207 million in 2010.

Our sites are generally located in regional areas, so they represent a significant employer in and contributor to the local economy. Our most significant site operating costs are for employee benefit expenses (30%) and energy (37%), both of which increased in real terms during 2010.

Employee benefits increased by 26% due to the ramp up of mining assets and increased production activities. Energy expenses increased in the past year due to higher production rates and changes in exchange rate. Capital expenditure was significantly higher in 2010 than in 2009, with € 81 million invested in smelting and €60 million in mining, including approximately € 24 million for mine ramp-up activities. From a regional perspective, direct economic benefits in terms of

site operating costs increased to €307 million in western Europe, €128 million in the Americas and €278 million in Australia; and in terms of capital and cyclical maintenance, spend increased to €37.2 million in western Europe, €68.2 million in the Americas and €35.6 million in Australia. The increased proportion of spend in the Americas reflects the implementation of Nyrstar’s growth strategy in mining.

Nyrstar revenue and profitability reflect results of the entire company. (*) Operating costs and capital spend are for the smelting and mining segments only.

2008 2009 2010

231

268

214

134

186

165

273

251

181OtherEnergyEmployee Benefits

10

performance Summary

Our 2010 targets related to further development and implementation of company-wide systems and processes, continual improvement on our performance and establishment of baseline performance for new assets.

2010 gOalS 2010 perFOrmaNce 2011 targetSaFetyNo fatalities N One fatality recorded at Coricancha Mine No fatalities12.5% reduction in smelter recordable injuries from 2009 result. Baseline injuries data to be recorded for mines.

A 30% reduction in smelter recordable injuries, down from 101 in 2009 to 71 in 2010. Baseline established for TN Mines.

12.5% reduction in the recordable safety incident rate compared to the 2010 result. Establish a verified baseline for new mine assets.

Implement ‘Working Safely 1’ at the mine sites and complete ‘Working Safely 2’ program at all smelters.

P Mine sites completed ‘Safety for Leaders’ training and have Working Safely 1’ scheduled for 2011. ‘Working Safely 2’ completed at 4 of the 6 smelter sites.

Continue rollout of safety training modules ‘Working Safely 1’ and ‘Working Safely 2’; develop ‘Working Safely 3’ module.

healthImplement Group wide database across all smelters and Tennessee Mines for confidential recording of medical and exposure monitoring data.

P Database is operational in Europe, however roll-out was delayed in the US and Australia for technical reasons. Due for full implementation in 2011.

Complete implementation of the Group wide medical database. Implement the Group Standards for health surveillance and exposure monitoring.

eNvirONmeNt15% reduction in smelter recordable environmental incidents from 2009 result.

A 19% reduction in smelter recordable environmental incidents, down from 21 in 2009 to 17 in 2010. Baseline of 9 recordable incidents for TN Mines.

Achieve a 15% reduction in recordable environmental incidents from 2010 result. Establish a verified baseline for new mine assets.

No environmental incidents with significant off-site impact.

A None of the reportable spill or emission incidents in 2010 resulted in a significant off-site impact or in regulatory action.

No environmental incidents with significant off-site impact.


2010 gOalS 2010 perFOrmaNce 2011 targetSites to develop regular site management level reporting, and targets where appropriate, for key environmental performance measures.

P Revised key environmental performance indicator reporting for the Group RIMS database. Other aspects superceded by Nyrstar 2020 Operational Excellence approach.

Mine Closure & Reclamation (New Goal for 2011) All Mine sites to have a Closure Plan at least at a Framework level.

cOmmuNityDevelop formal site community engagement plans at all sites.

P All sites undertook community activities in 2010, however formal plans only developed for key sites. Developed a Corporate Social Responsibility approach for Nyrstar.

Continue to develop the Nyrstar Corporate Social Responsibility Program under the framework of the Nyrstar Foundation.

gOverNaNceDevelop the next set of modules in the Code of Business Conduct Development Program.

P The Nyrstar Business Code of Conduct is part of the new employee induction pack. In addition to the Competition Law module, we developed a module on Directors Duties.

Review the Nyrstar Code of Business Conduct in light of the Nyrstar Way and continue to develop modules in the Code of Business Conduct Program.

Conduct Enterprise Risk training workshops for newly acquired sites. Validate enterprise risks and controls in Group database.

N Activity delayed, will be conducted in 2011.

Conduct Enterprise Risk training workshops for newly acquired sites. Validate enterprise risks and controls in Group database.

maNagemeNt SyStemSAll sites to develop a workplan for integrated Quality, Environment and Safety Management Systems certification.

P All smelters maintained current ISO certifications in the period. TN Mines developed an ISO14001 certification plan.

All sites to develop a workplan for integrated Quality, Environment and Safety Management Systems certification.

All sites to achieve an audit rating of ‘all basic requirements have been implemented and are effective’ for Nyrstar Safety & Health Management Standards.

P This goal was met or exceeded by the end of 2010 at all smelting operations except for Auby, where notwithstanding the progress made in 2010, was below the required level.

Establish a partnership with external safety & health service providers to assist with future delivery of the Group Safety & Health assurance program.

A = Achieved P = Progressed N = Not achieved / Not progressed

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Safety

The first element of the Nyrstar Way is to ‘Prevent Harm’. We commit to always putting safety first and to proactively managing risks relating to our people. Nyrstar has core policies and procedures to support a consistent approach to safety and a culture of looking after each other and keeping each other safe. Our Nyrstar Safety and Health Policy is underpinned by a set of Management Standards that cover all aspects of safety and health. For each Management Standard, a set of expectations and requirements has been specified. The requirements under each expectation define the level of safety management we would anticipate to deliver above average industry performance. Ongoing implementation of the requirements specified in the standards is planned to deliver Nyrstar’s goal of world class safety performance by 2012.


The most significant safety risks at our smelter sites relate to exposure to the hazards inherent in our operations such as: molten materials; dusts and fumes containing metals such as lead, cadmium, mercury, and arsenic; acidic liquids; working at height; electricity; materials handling; moving machinery and vehicles; and the manual nature of many of our tasks. At our recently acquired mining assets, the most significant risks are related to exposure to dust and diesel particulates; underground evacuation; fire; inundations; ground instability or rock falls; use of explosives and hoisting activities.

Our key strategies for reducing the potential for workplace injury, and therefore the key areas where we have opportunities to further improve are:

- systematic identification of hazards, risks and appropriate controls;

- standard best practice management systems, practices and procedures;

- a safe work culture where all individuals take responsibility for their own actions and also ensure that their colleagues are working safely; and

- strong and consistent safety leadership at frontline supervisor level.

Nyrstar Safety management StandardsThe annual Corporate audit program was completed, which includes an evaluation of site compliance with Nyrstar requirements as defined in the Management Standards and with legislation. A rating of current site management systems and performance was given against a standard scale, with the goal being to achieve a minimum rating of ‘all of the company’s basic safety & health requirements being implemented and fully effective’. This goal was met or exceeded by the end of 2010 at all smelting operations except for Auby, where notwithstanding the progress made in 2010, the result remains below the required level. Baseline assessments were performed at the newly acquired mining assets and focused on legal compliance, reduction of significant risks and determining the sites’ journey to world class safety, a goal to be achieved within 5 years.

Safety leadershipWe recognize the critical role of safety leadership and safe work behaviours in

ensuring that our people are not harmed in the workplace. Our approach to safety leadership and behavioural safety involves roll-out of the ‘Safety First Standard’, outlining the company’s expectations regarding safety leadership and accountability, followed by the ‘Safety for Leaders’ program and the behavioural safety courses ‘Working Safely 1’ and ‘Working Safely 2’ for all employees. These programs cover the full range of safety leadership topics, including a basic knowledge of behavioural safety theory, communication skills applied to safety, organizational cultures, practical tools for the frontline leader, and practical skills for all employees such as behaviour observation and feedback, hazard recognition, safety awareness and the causes of unintentional at-risk behaviour.

During 2010 we conducted additional external benchmarking which resulted in a 2 year strategy for the further development of our safety leadership programs. Key concepts will include maturity based safety programs, a cognitive behavioural safety approach and an ever increasing focus on the development of our frontline leaders.

Workplace health & Safety committeesFormal Site Health and Safety Committees which represent the entire site workforce are in place at all our smelters. The Committees help monitor our health and safety performance and provide advice on improvement initiatives.

catastrophic risk managementMost of our major operating sites are subject to additional regulations applying to industrial facilities with the potential for ‘catastrophic risks’, which are defined as risks which could result in multiple fatalities or serious off-site impacts. In Europe, we continued with risk analysis, explosion hazard management and emergency response activities relating to the requirements of the ‘Seveso II’ directive. In Australia, we are assessing the proposed requirements of Major Hazard Facility legislation for Port Pirie. Hobart was declared a Major Hazard Facility and is completing additional risk management activities as required in State legislation.

Workplace injuriesNyrstar’s third operating year has been characterized by a significant and sustained decrease in both Lost Time

14

Injuries (LTI’s) and Recordable Injuries (RI’s). The number of LTI’s at our smelting operations decreased by 16% from 25 in 2009 to 21 in 2010, while the number of recordable injuries decreased by 30% from 101 to 71 despite a significant increase in the number of hours worked, mostly due to the start-up of the Balen after being on care and maintenance in 2009. Meanwhile baseline data gathering was completed at the company’s mining assets. Tennessee Mines recorded 37 RI’s in 2010, of which 7 were LTI’s.

This improvement significantly exceeded our target of a 12.5% reduction in smelter recordable injuries for the year. We believe that this was due to a number of factors: continued focus on safety; the continued roll-out of Nyrstar’s Group-wide initiatives such as our safety leadership and behavioural safety programmes, the company’s newly developed technical safety standards and the assurance programme; and

ongoing safety improvement efforts at the operational level.

Due to the significant expansion of Nyrstar’s operations by the acquisition of mining assets in the US, Peru and Mexico, the company is moving to the use of frequency rates as its main performance indicator for lost time and recordable injury incidents in the future. Frequency rates will provide a more accurate picture of the company’s safety performance when significant changes in number of employees and hours worked occur.

Another important measure of the company’s safety performance is the number of ‘critical incidents’, that is, incidents that did result, or could reasonably have resulted in a fatality or permanent serious disability. By setting clear expectations and encouraging sites to report this type of incident, we aim to increase awareness of critical risks to our people and to our business. During the year 16 critical incidents were

reported, an apparent increase on the previous year’s number of 12, however this was mostly due to the inclusion of newly acquired mines in Tennessee. Both the reporting and prevention of such incidents will remain one of our main priorities going forward.

As well as continuing to track recordable injuries and critical incidents, in line with our goal of preventing harm, we are also identifying a set of proactive safety performance indicators. These will be introduced and baseline data collected across our sites during the second half of 2011.

looking forwardOur key safety priorities and targets for the coming year include:

- Develop our next behavioural safety initiative, building on the success of our programs Working Safely 1 and 2;

- Achieve a 12.5% reduction in the recordable safety incident rate compared to the 2010 result;

- Collect verified baseline injury data for Peru Mines, Campo Morado and any new acquisitions;

- Complete the development and implementation of our technical Safety & Health Standards, in particular those relating to mining specific risks such as ground control, mine rescue and the use of explosives;

- Complete the integration of the company’s new mining assets in our safety & health programs;

- Further implement company wide systems aimed at standardized and more efficient incident and performance reporting, medical data management and improved operational safety risk analysis; and

- Conduct baseline safety and health audits at newly acquired mining sites.

Lost time and recordable injuries includes all people on site: employees, contractors, casuals and visitors. 2009 results did not include newly acquired mining assets, 2010 results includes TN Mines only.


EUUSAAUS

WoRfoRCe loSt time inJuRieS by Region

EmployeesContractorsCasual

EUUSAAUS

WoRfoRCe ReCoRdable inJuRieS by Region

4

23

81

2009Smelters

2009Mines

2010Smelters

2010Mines

2009Smelters

2009Mines

2010Smelters

2010Mines

11

3

11

7

14

7

48

14

39

26

4237

3

WoRfoRCe ReCoRdable inJuRieSby employment type

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Health

The elements of the Nyrstar Way, Nyrstar Group Policies and Management Standards that apply to safety also apply to health. We have established a global health and hygiene network to ensure a common group wide approach to health management and the sharing of best practise within the company. The most significant health risks arising from our operations relate to exposure to the physical and chemical hazards inherent in our work environment, including: metals such as lead, cadmium, mercury and arsenic; acidic solutions; acid mist; diesel particulates; toxic gases such as sulphur dioxide, hydrogen sulphide and chlorine; noise and heat. A new risk is altitude sickness which is a significant risk at our newly acquired Peruvian mining operations (Contonga, Coricancha and Pucarrajo) which include operations well over 4000 m above sea level.


There are also a number of common health risks for our employees and contractors that are not related to hazards in the workplace, but to the demographics of our workforce. These include health issues relating to an aging workforce and to lifestyle choices such as smoking, diet and exercise.

Our key strategies for supporting a healthy workforce include:

- systematic identification of workplace exposures, monitoring of exposure levels and application of systems or practices which minimize exposure to acceptable levels;

- monitoring of workforce bio-markers and health indicators; and

- supporting our workforce in general health awareness issues and wellness programs, encouraging individuals to make healthier lifestyle choices.

Workplace exposure standards and monitoringA group-wide exposure monitoring standard has been developed to set minimum company requirements for the evaluation of workplace exposure monitoring. This standard specifies requirements for exposure monitoring of

substances including lead, cadmium, mercury and arsenic. The standard will be finalized and rolled out in 2011.

As part of the reduction in the legal exposure limit for sulfuric acid mist in Europe, Nyrstar, working together with the European Sulfuric Acid industry, has taken the lead in the development of a new standardised measurement method relevant to workplace exposure. This technique was accredited during the second half of 2010, providing a solid basis for the company’s efforts going forward. It will allow us to accurately measure sulfuric acid mist levels and the impact of improvement initiatives at our operations, in order to protect the health of our workers and ensure continued legal compliance.

routine medical assessmentNyrstar has developed group-wide health surveillance and exposure standard covering the requirement for pre-employment medicals, annual health assessments, end of employment medicals and any relevant follow-up processes. The scope of these medical assessments focuses on ensuring physical capability of people in the workplace and includes physical examinations, blood/urine analysis, spirometry,

audiometry, functional capacity testing, and where appropriate, suitability for alternate duties. The standard will be implemented at operating sites in 2011.

A new medical information database was piloted at the European sites during 2010 to facilitate the reporting and analysis of confidential medical data. System testing and training was completed during the year in Australia and the US, with full database implementation planned for 2011.

Sharing of best practice on health issuesThe medical department at Balen has developed the use of a specialised buffering solution for the treatment of chemical burns, as acidic solutions are a key hazard at zinc smelters. This ‘best practice’ has also been implemented at the two Australian smelters. The solution has already been used successfully in several acid burn incidents, significantly reducing the extent of injury caused. Continuing on the success of the product to date, a pocket size bottle format is being now being developed for implementation in 2011, to facilitate rapid response in the event of workplace incidents.

Fitness for workPrograms exist to minimise the potential for drug and alcohol impacts in the workplace, including systematic testing where this is permitted by law. These programs are still to be standardized across all Nyrstar sites.

healthy lifestyle choicesWellness programs are an integral part of Nyrstar’s safety and health programs and initiatives have been developed at most Nyrstar sites. During the past year we have continued to support various initiatives, including: awareness programs; general health assessments and screening for high blood pressure, skin cancer, diabetes and other diseases with lifestyle risk factors; influenza vaccinations; and participation in stop smoking, fitness and weight loss programs.

looking forwardOur key workforce health priorities and targets for 2011 include:

- Complete implementation of the new medical database software at the Australian and US smelters; and

- Complete implementation of the company’s health surveillance and exposure monitoring standards.

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environment

The first element of the Nyrstar Way, ‘Prevent Harm’ means we commit not only to minimising the environmental impact from current activities, but also to recognizing the environmental impact from past operations and addressing legacy issues. We have a Corporate objective of having all our operating site Environmental Management Systems certified to ISO 14001. This ensures that all sites have identified their significant environmental risks and aspects and have established processes in place to minimize their emissions and continually improve their performance. Our smelters are all certified to ISO 14001 and Tennessee Mines will commence their certification implementation plan early in 2011.

Nyrstar’s key environmental risks and opportunities relate to: - continually improving the performance of our production facilities and minimizing emissions; - meeting legal obligations and the requirements of our voluntary agreements which become more complex and stringent over time; - addressing legacy issues, particularly historical disturbance, soil and groundwater contamination and accumulated by-products and wastes; and - providing material stewardship through: efficient and responsible use of resources, including water and energy; minimizing waste; and expanding recycling options.

group environmental StandardsWe have developed core Group wide environmental standards and processes covering areas such as legal and other requirements, risk management, performance measurement and incident reporting, and environmental provisions estimation. We developed a Standard for mine closure planning which will be finalised in 2011. Compliance with our Group environmental standards and reporting processes is assessed as part of the environmental assurance program which was undertaken at all sites in 2010.

environmental awarenessEnvironmental awareness training for employees is undertaken at an operating site level. Building upon the same approach used for Safety Leadership, the intent of the training is to ensure that the workforce is aware of the significant environmental impacts relating to the site, compliance requirements, and what they could do personally to improve the environmental performance of the site.

environment improvement projectsOur environmental improvement programs are generally site specific, as the most significant risks at each site differ, depending on the site history and location, physical and regulatory environment, and the level of past investment in environmental protection measures. We have continued to progress a number of key site projects over the past year, including: - commencing projects to install the final capping on closed landfills at Auby; - reaching agreement with the Authorities on the final community soil remediation standards and developing a program for the final Phase 2 remediation works in the community areas close to the Balen and Overpelt sites;


- commencing installation of the contaminated groundwater interception and recovery system at Overpelt, which is on plan for completion in 2011; - finalising the Aftercare Plan arrangements for the historical landfill area at Budel with the Province of Noord Brabant. A modified plan was agreed which will see staged handover of the landfill area, commencing in 2013; - commencing a project to seal the basement beneath the Cell House at Hobart, which will mitigate future groundwater contamination in this area. The site also continued with a program for historical mercury waste treatment and approved disposal; - continuing on-site fugitive lead emission reduction measures including the ‘Quit the Pit’ project and continuing support for measures to reduce community lead exposure at Port Pirie. At the end of 2010, 72.3 percent of children tested had a blood lead level below 10 micrograms per decilitre, compared to 49.6 percent in 20051. The ‘Ten for them’ program was formally launched in September as part of Nyrstar’s

1 South Australia Department of Health data, measured as 5 year moving cohort.’

ongoing commitment for the community blood lead reduction program at Port Pirie; - implementing plans to eliminate non-compliances with wastewater discharges for zinc during mine dewatering and developing an ISO14001 implementation plan at Tennessee Mines; and - completed arrangements enabling lifting of the emergency decree and commenced relocation of tailings from the Coricancha Mine to the new Chinchan Tailings Storage Facility.

compliance with licence conditionsOur key compliance measure is recordable environmental incidents, which are defined as environmental incidents or events requiring notification to the relevant Regulatory Authority, which are a non-compliance with consent conditions. The total number of recordable incidents in 2010 was 26, which was greater than the previous year total of 21 due to the inclusion of new mining assets. Of the 26 incidents in 2010, 17 related to the smelters and 9 to Tennessee Mines. The smelter result was a 19% reduction on the 2009 result, which exceeded our 15% improvement objective for comparable sites. The most frequent incident types were

non-compliance with discharge limits, for wastewater (38%) and for air emissions (27%). All of the recordable environmental incidents were of a minor nature and none of the incidents resulted in significant off-site environmental impact or in regulatory action.

emissions to air & WaterWe measure emissions of key pollutants discharged at licensed air and water emission points. Our overall target is to reduce emissions.

Group emissions to air from licensed point sources for nitrogen (as NOx) increased by 19% from the 2009 result, due to increases in production rates and sampling variations. Total Group emissions of sulphur (as SOx) did not significantly change, with 96% of these emissions relating to Port Pirie which has limited sulphur capture. SOx emissions at the zinc smelting sites more than doubled to 2,039 tonnes in 2010, the most significant difference representing the return to normal production at Balen smelter which had been closed for most of 2009.

Wastewater discharges of key metals from licensed point sources are measured by receiving water type. Zinc discharged in treated wastewater increased by 13%, although this was mostly due to

the mine sites being included in the 2010 total. Lead emissions reduced by 13%. Cadmium emissions increased by 6%, again due to the addition of mine site data. Discharge of key metals in wastewater was reduced by over 90% at Overpelt due to the upgraded wastewater treatment plant being fully operational; however this was offset by variable performance at other sites.

energy & greenhouse gasesOur position statement on climate change and energy is available on the Nyrstar website www.nyrstar.com. Zinc and lead production are energy intensive, predominantly due to the use of electricity in the electrolysis step of the zinc production process. Our carbon footprint is mainly due to indirect (electricity generation related) emissions rather than direct site emissions and is therefore highly dependent on the electricity source in the regions that we operate. We measure our energy use and greenhouse gas emissions, both by direct and indirect sources. Our overall target is to increase energy use efficiency and reduce greenhouse gas emission intensity. During 2010 we supported the installation of a 6.6 MWh solar generation installation on top of the closed landfill area at Overpelt

20

by a third party. The Nyrstar Board also approved capital expenditure for two significant energy efficiency improvement projects at Balen and Hobart.

Total Group energy use increased from 17.2 Petajoules (PJ) in 2009 to 21.5 PJ in 2010 as a result of the restoration of full production rates at Balen, Budel and Clarksville during the year and the addition of the Tennessee Mines, however energy use efficiency increased from 16.9 to 16.3 Gigajoules per Tonne of metal product. Similarly, total greenhouse gas emissions increased from 1.6 to 2.1 million tonnes of carbon dioxide equivalents (Mt CO2-e); while emissions intensity increased only slightly, from 1.60 to 1.62 tonnes CO2-e per tonne of metal production over the last year. At our zinc

2010 the proportion of zinc derived from secondary raw materials increased significantly to 21%, up from 15% in the previous year.

Water useWe measure fresh water used on site for process purposes, as supplied by local utility companies or from local surface or groundwater resources. Recovered stormwater or contaminated groundwater is also used at some sites to replace fresh water. Our overall target is to increase water use efficiency, particularly for fresh water supplies. Fresh water use increased by 30% across the Group over the past year as production levels increased, however overall water use efficiency improved by 13% from 9.2 kilolitres per tonne of product in 2009 to 8.0 in 2010.

smelters in 2010, an average of 94% of energy use was indirect energy (electricity), most of which is used in the electrolysis step of the process. Similarly, indirect carbon dioxide emissions averaged 91% of the Group’s zinc smelter CO2 emission profile and 78% of the total Group’s CO2 profile in 2010. Direct energy use and carbon dioxide emissions are greater than indirects at the Port Pirie smelter which uses different processes to produce a variety of metal products.

raw material useWe extract metals and other valuable by-products not only from natural raw materials, but also from secondary recycled sources such as zinc oxides. Our overall goal is to increase the volume of zinc production from secondary materials. During

A number of water recycling projects are under investigation or underway for the coming year, with construction of a smelter wastewater recycling plant at Port Pirie, proposals for a municipal stormwater recycling plant in Hobart and increased recovery of contaminated groundwater at Overpelt. All of these would result in a reduction in site fresh water use as a portion of current supplies would be replaced by recycled water.

Waste We measure both process and non-process wastes arising from our operating sites, with our overall objective being to reduce waste to landfill and volumes of wastes stockpiled on site over time. The volumes of non-process waste increased by 117% in the past year, with a

emiSSionS to aiR - nox (tonneS)

2010 ReCoRdable enviRonmental inCidentS by type

wastewater emissionsspillsemissions to airstormwater emissionsprocedures 2008 2009 2010

307 320380

2008 2009 2010

SmeltersMines

2421

17

9

ReCoRdable enviRonmental inCidentS

eneRgy ConSumption (pJ)

15.412.5

16.6

4.9

4.7

4.8

Direct EnergyIndirect Energy

2008 2009 2010

eneRgy uSe effiCienCy (gJ/t)

16.2

2008 2009 2010

16.9 16.3

gReenHouSe gaS emiSSionS (mt Co2-e):

2008 2009 2010

1.521.15

1.66

0.48

0.47

0.48

Direct EmissionsIndirect Emissions

Co2 emiSSionS intenSity (t Co2-e / t pRoduCt)

Direct EmissionsIndirect Emissions

0.39

1.21

0.46

1.13

0.36

1.26

2008 2009 2010

10

5

2

72


emiSSionS to aiR - Sox (tonneS)

2008 2009 2010

Zinc smeltersPort Pirie

58,0

80

56,8

97

55,9

51

1,748 995 2,039

emiSSionS of metalS to WateR by deStination (%)

Mines to Streams / WaterwaysSmelters to Streams / WaterwaysSmelters to Estuary / Sea

emiSSionS of metalS to WateR (t)

Cd

Pb

Zn

CdPbZn

3.6

3.7 3.3

30.725.7 26.2

0.6

0.5 0.5

2.7

0,01

0.04

2008 2008 2009 2009 2010 2010

fReSH WateR uSe by SouRCe (ml)

Municipal SupplySurface WaterGroundwater

2008 2009 2010

2,23

63,

202

4,37

5

1,72

13,

322

4,26

4

2,56

13,

151

4,79

2

125% increase in volumes to off-site recycling and 151% increase to off-site landfill. Some of this increase can be explained by increased production activity, with the TN Mines contributing 15% of the increase over the previous year, however increases were also recorded at all smelter sites. There will be a renewed focus on waste reduction activities during 2011.

land management and rehabilitationWe have an overall objective of reducing our environmental footprint. For smelters this generally involves taking the opportunity to remediate old process plant areas after decommissioning, while for mines this includes progressive remediation activities taken in parallel with the ongoing mine plan.

At Hobart, approximately 0.3 hectares in the centre of the site, where the old leach plant had been demolished in the 1990’s, was rehabilitated and re-vegetated. As part of the Port Pirie ‘Quit the Pit’ project, a total of 2.4 hectares that had previously been used for material storage was cleared and re-vegetated. At Tennessee Mines we commenced a project for the removal of former processing plant infrastructure and other redundant equipment still remaining from previous ownership at the Elmwood Mine facility.

looking forwardDuring the coming year we plan to continue our existing initiatives in the areas of risk management, the reduction of emissions from current activities and addressing historical

contamination and waste issues. In addition, there will be a focus on integration and ramp-up of mining activities. Key activities and initiatives for 2011 include:

- Complete updating of Group Environmental Standards to ensure that they adequately address mining specific issues;

- Continue the establishment of programs at Nyrstar mining sites to ensure that these sites meet Group Environmental Standards and processes;

- Submit the final Aftercare Plan for the historical landfill area to the Province of Noord-Brabant;

- Complete the first phase of contaminated groundwater interception and recovery infrastructure at Overpelt; agree the revised concept

for the Balen groundwater remediation project with the Regulatory Authorities; and commence works for the final phase of community soil remediation activities close to the Balen and Overpelt plants;

- Continue the Port Pirie ‘Ten for them’ project to ensure ongoing and sustainable improvements in community blood lead levels;

- Continue cell house basement sealing and complete historical mercury waste treatment and approved disposal at Hobart;

- Achieve a 15% reduction in recordable environmental incidents from the 2010 results for smelters. Establish compliance baselines for Peru Mines and Campo Morado.

2008 2009 2010

7.89.2

8.0

fReSH WateR uSe effiCienCy (kl/t pRoduCt)

ZinC by RaW mateRial type (%)

81.6

18.4

85.5

14.5

78.6

21.4

2008 2009 2010

non-pRoCeSS WaSte (t)

RecyclingRecovery/IncinerationOff-site landfill

974

1,33

01,

646

469

862

812

683

1,93

62,

038

2008 2009 2010

Smelter Mine Smelter Mine Smelter Mine

SecondariesConcentrates

86

68

22

people

At Nyrstar, we believe that people are the foundation for our success. Our long-term sustainability depends upon recruiting, training, developing and retaining a talented, dedicated and motivated workforce.

We are committed to open and honest relationships with our employees, and we aim to be consistent, fair and transparent in our practices and processes and, as a minimum, to meet all legislative requirements in our jurisdictions of operation.

After the establishment of our new Global Corporate Headquarters in Zurich, Switzerland in mid 2010, we commenced the Nyrstar 2020 Initiative, with the goal of establishing a longer term vision for the company. One of the Nyrstar 2020 workstreams was focussed on the way we work and the outcome of this was the development of the Nyrstar Way, which built upon our previously communicated values and operating principles. The Nyrstar Way serves to provide guidance on our actions and behaviours, and includes the following seven elements: Prevent Harm, Be Open and Honest, Keep our Word, Take Bold Decisions, Create Value, Use Innovative and Creative Thinking, Be Driven.

The Nyrstar Way was formally launched at all operating sites early in 2011. To further reinforce our commitment to the Nyrstar Way, we will link the elements to individual reward via our performance management process in 2011. An assessment of demonstrated behaviours in line with The

Nyrstar Way will be an element of our Annual Incentive Plan for employees, with a 360 degree feedback process used for those at management level. We believe that the Nyrstar Way and the behaviours associated with it will not only support delivery of our key strategies, but also create a culture that attracts and retains talented employees.

In addition to The Nyrstar Way, the Code of Business Conduct further defines the standards of integrity and business conduct expected of all employees in their dealings with our community, environment, customers, suppliers, competitors, shareholders and the assets of the company. All employees are exposed to these expectations, typically during the induction process. At this time they are given a copy of the Code of Business Conduct booklet, which also contains a useful framework for ethical decision-making.

human rightsSupport for fundamental human rights is an integral part of how we operate. We believe companies can and should play a constructive role in upholding and promoting human rights. We are committed to respecting our employees’ rights in line with the International Labour Organisation’s Declaration of

employeeS by ContRaCt type

employeeS by loCation

employeeS by gendeR

employeeS by age (%)

Full TimePart Time

MaleFemale

Europe AmericasAustralia Other

>20 20-29 30-39 40-49 50-59 60-69 70<=

3,472

116

3,319

269

1,199

1,449

932

8

< 0.1

9

19.5

40

27.5

4

< 0.2


Fundamental Human Rights at Work.

Workforce composition and terms of engagementIt is a Nyrstar policy to comply with relevant legislative employment frameworks wherever we operate. We recognize the right of freedom of association by our employees. We have a number of operations where we have a mix of collective and individually regulated employment agreements, however this does not affect the rights of employees to choose to belong to trade unions.

In 2010, approximately 73 per cent of our workforce was covered by Collective Agreements. Most of our employees are engaged on a full time basis, however the same standard terms and conditions of employment apply to both full and part time employees.

Nyrstar believes in constructive and open dialogue with our employees. Our policy is to consult with employees on any major organizational changes, and to ensure that appropriate processes are in place at each of our operations to manage and resolve any issues as they arise. We have processes in place at all sites to effectively manage any discriminatory incidents. There was one discrimination

claim made by an employee in the USA, which is currently under review by an independent authority. There were no other incidents or claims of violation of rights reported during 2010.

training and developmentHaving the right people with the right skills at the right time is critical to our success. We have formal processes in place to ensure that all of our employees receive regular performance reviews. To ensure that that our people have the requisite skills, we have several development programs in place.

nyrstar CollegeDue to the growth of the business and the move of the Corporate Office to Zurich, a significant number of new professionals joined Nyrstar during the year. In order to give these people a more integrated understanding of the business, we created the Nyrstar College, to give participants an overview of our business from the raw material sourcing to end product uses. There were 24 attendees at the first college held in November in Zurich and it is intended to run further colleges periodically in the future.

nyrstar leadership programAt our European sites and Peru Mines, we continued the roll-out of our Nyrstar Leadership

Program for managers and front-line leaders, which focused on the development of core people management skills and a common leadership approach across the company. This program is conducted at sites in the relevant local language.

nyrstar unlimitedThe Nyrstar Unlimited program is part of our broader cultural transformation initiative, which builds on the critical people leadership skills covered in the Nyrstar Leadership Program and aims to deepen self-awareness and reinforce the desired attitudes and spirit necessary for success. This program was conducted at our European smelter sites during 2010 and will be extended to our mining sites in the future.

graduate development programThe Nyrstar Graduate Program is a key component of our overall talent attraction and development strategy and helps us to ensure that Nyrstar is an employer of choice for young professionals. The two-year Program is structured to provide a depth and breadth of technical experience and also to enhance interpersonal skills and personal development. In 2010, Nyrstar employed 9 graduates within the Nyrstar Graduate Program, spread globally across

our operations. Of the first intake of 11 graduates in 2008, 8 completed the program in February 2010 and 6 were still working at Nyrstar at the end of 2010. A further graduate intake will occur in 2011.

leading by exampleWe strongly believe that leaders lead by example and as a result of this view, the Nyrstar Management Committee and senior management within Nyrstar continues to upgrade its leadership effectiveness by participation in an ongoing development program. As leaders they must lead the Nyrstar Way.

looking forwardOur key people priorities and targets for 2011 include:

- Integrate newly acquired mines into Nyrstar people processes and procedures;

- Further grow our leadership capabilities through continued roll-out of our suite of Leadership Development Programs;

- Implement and embed the Nyrstar Way within our systems of reward and broader human resources processes; and

- Complete the development of indicators for organizational health and for measures such as absenteeism.

People data includes 6 smelter sites, Tennessee Mines and Corporate offices as at 31 December 2010.

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Community and Society

Nyrstar’s reputation is greatly influenced by our ability to communicate in a consistent and professional manner with all our stakeholders, including employees, shareholders, the investment community, media, government and local communities. The Nyrstar Way states that we will be open and honest, that is, we will communicate openly, not compromise trust and ensure transparency in our communications.

We consider our key external stakeholders to be our shareholders, our customers, our suppliers, our regulators and the local communities around our operating sites. Our strategy for engaging our stakeholders differs with each stakeholder group. During 2010 we released a Corporate brochure to more clearly explain to our stakeholders who we are and what we do. We also developed key issue fact sheets that will be released in 2011, along with an upgraded Nyrstar website. We commenced development of a formal Corporate Social Responsibility (CSR) framework for Nyrstar, to more clearly outline how we will work with our stakeholders for mutual benefit as our company continues to grow in size and geographical spread.

investors Nyrstar is a Belgium-based company listed on the Euronext Brussels stock exchange. As a Belgian listed company, Nyrstar is obliged to provide investors in its shares with all information necessary to ensure the transparency, integrity and good functioning of the market. Nyrstar has a Disclosure Policy which outlines our approach to ensuring that we meet the requirements for disclosure of company information and

for informing the investment community.

During 2010, we produced investor communication materials on Nyrstar’s business and assets, our Nyrstar strategy and the mining side of our business. We conducted investor visits at our US operations in June and at our Belgian operations in October, as well as presenting at a number of investment and industry forums. Copies of investor presentation materials are made available on the Nyrstar website at: www.nyrstar.com/nyrstar/en/investors/reports/

customers and Suppliers Our customers are important to our success and most of our engagement with them in the past has been on an individual basis. One of the key Nyrstar 2020 Strategy elements is to strengthen our existing business by making it more externally focussed and driven by commercial, operational, and financial excellence. As part of the commercial excellence project, we will commence a more formal process for seeking feedback from our customers in 2011.

We conduct our business within the framework of applicable professional standards, laws, regulations and internal


policies; however we also acknowledge that these requirements do not govern all types of behaviour. As a result, Nyrstar also has a Code of Business Conduct and a Code of Business Conduct Development Program, which covers all Nyrstar people and sites. The Code of Business Conduct has been translated into relevant local languages and is a standard element of the Nyrstar employee induction process. Development of the Nyrstar 2020 Strategy and the Nyrstar Way, as well as the addition of mining assets as part of Nyrstar strategy implementation, will see us updating the Code of Business Conduct in 2011. Development of new modules and training in the Code of Business Conduct Development Program was undertaken in 2010 and will continue in 2011, ensuring that new employees and areas of the business are given relevant and appropriate guidance.

As part of European REACh legislation implementation, we reviewed all our European product health and safety information and made this information publicly available on the Nyrstar website. We intend to extend the information available on the Nyrstar website to all of our products globally, as we

standardise safety data sheets with the implementation of the Globally Harmonized System of Classification and Labelling of Chemicals (GHS).

There were no legal actions taken against the company in 2010 regarding anti-trust or anti-competitive behaviour. There were no non-compliances reported with regulations or voluntary codes concerning any type of marketing communications, product information or labelling or breaches of customer privacy.

communities and regulatorsNyrstar recognizes the importance of having healthy and sustainable communities around our operating sites. We believe that mutually beneficial relationships will assist us to achieve our business objectives and support sites in maintaining their licence to operate. Our support can also contribute to the viability of local businesses and support services, and promote a safe and vibrant community; which are important factors for attracting and retaining skilled employees in those regions.

Community Consultation processesAll Nyrstar smelters and mines have undertaken community engagement activities to a

greater or lesser extent during 2010. Our programs and resources are more formalised at our mines and at our Port Pirie and Hobart smelters, due to the interdependence with and proximity to local communities in those areas. Our consultation processes vary between sites and issues as appropriate, but include formal meetings and consultation committees, newsletters, site open days, issues based public meetings and mail outs, and individual contacts.

There most significant issues where we have worked closely with our communities and regulators over the past year include:

- continuing the Port Pirie ‘tenby10’ program to reduce children’s blood lead levels in the local community and development of the ‘Ten for them’ program, reflecting Nyrstar’s ongoing commitment to the program objectives.

- obtaining all necessary approvals for the restart of the Coricancha Mine, which included approvals for and construction of the new Chinchan tailings storage facility and commencement of relocation of tailings from Coricancha to Chinchan.

external partnerships, Sponsorships and donationsTo date, our program of external partnerships, sponsorships and donations has been focused on strengthening community relations at site level. During 2010 we commenced the development of a formal Corporate Social Responsibility (CSR) framework for Nyrstar and we developed the Nyrstar Foundation which will be launched early in 2011, initially as our corporate group’s contribution to Nyrstar’s overall CSR Program.

Nyrstar also commenced an internal program for ‘Zinc Saves Kids’, an International Zinc Association (IZA) initiative in support of UNICEF. Zinc Saves Kids (www.zincsaveskids.org) is an initiative to improve the survival, growth and development of undernourished children by funding UNICEF-supported zinc supplementation programs around the world.

At an operational level, we have a Nyrstar Group Standard that outlines our approach to external partnerships, sponsorships and donations and guides our actions in engaging and building goodwill with key stakeholders in a way that supports our business objectives. Our guidelines state that we will not support

26

activities that do not reflect the Nyrstar values and will not support political parties or campaigns.

Community support activities during 2010 reflected our CSR approach of improving conditions relating to health, education, social welfare and the environment. These included financial and in-kind support for local community initiatives such as children’s health, educational opportunities, cultural and sporting events. Nyrstar also facilitated site visits by community and school groups as part of overall minerals industry awareness and education. A total of just over €0.42 million was contributed by Nyrstar as local community sponsorships and donations in 2010.

Looking forward for 2011, we will continue to develop our formal CSR framework and align our ongoing activities at both a Corporate and Site level to that framework.

public policy and regulation There are a number of issues on which Nyrstar has chosen to engage with public policy makers and regulators, either directly, or through industry associations which we belong to including the International Zinc Association, International Lead

Association and Eurometaux. The issues which Nyrstar has provided input on in the past year include:

- Greenhouse Gas emissions trading schemes in Europe and Australia. The European Union (EU) is implementing changes to its existing emissions trading scheme (ETS) to come into force post 2012 and the Australian government has announced that it intends to put a price on Carbon, which will initially take the form of a C tax, from mid 2012. Nyrstar, together with other zinc smelting companies operating in the EU have provided comment on various EU ETS proposals, particularly where these impact on international industry competitiveness. Nyrstar’s smelting businesses have previously qualified for recognition as energy intensive trade exposed industries in both the EU and Australia. Hobart and Port Pirie sites also continued activities and reporting under the Australian Energy Efficiency Opportunities Act, with public reports available on the Nyrstar website.

- The EU’s Registration, Evaluation and Authorization of Chemicals (REACh) legislation which entered into force on 1 June 2007. Nyrstar

participates in a number of industry consortia formed for the purposes of REACh compliance. Relevant Nyrstar legal entities completed registration for high volume substances currently produced or imported into the EU, with Nyrstar acting as the lead registrant for several substances, including zinc metal.

- The revised Directive on Industrial Emissions and associated non-ferrous metals best available techniques reference document (NFM BREF Notes) form the basis for environmental permit conditions for Nyrstar’s European smelter sites. Nyrstar contributed both individual and zinc industry submissions to the revision process for the Directive and NFM BREF Notes.

- Developments in Belgian Corporate Governance Code. Nyrstar is an active member of the Working Group to the Belgian Corporate Governance Committee which was founded at the initiative of, amongst others, the Association of Belgian Listed Companies and Euronext. The Committee’s main objective is to ensure that the Belgian Corporate Governance Code remains relevant to listed companies and is regularly updated in line

with corporate governance practice, legislation and international standards.

- Recognition of hazardous waste issues in Tasmania and the need for a repository for such industrial wastes. Nyrstar Hobart has a representative on the Tasmanian Waste Advisory Committee established under the State Governments ‘Tasmanian Waste and Resource Management Strategy’.

- Developments in general EU environmental legislation through participation in the European group of the International Zinc Association (IZA-E) and Eurometaux.

recognition of our performanceNyrstar did not receive any external awards or recognition relating to our sustainability performance during 2010.

To encourage and recognise outstanding contributions to the business internally, we established the Nyrstar Excellence Awards. Entries will be assessed for their innovation and the degree to which they embody the Nyrstar Way. The winners of the inaugural 2010 global Excellence Award will be announced in mid April 2011.


ERM Independent Assurance Report to Nyrstar

Environmental Resources Management Australia Pty Limited (ERM) was engaged by Nyrstar to provide independent assurance of its 2010 Sustainability Report to the scope of work outlined below.

Scope of Work The 2010 Sustainability Report (The Report) covers the six major wholly-owned smelters and the Tennessee mines for the 12 months to 31 December 2010, unless stated otherwise in the text. The six smelters are Europe: Budel, Balen/Overpelt and Auby; Australia: Port Pirie and Hobart; and the US: Clarksville. Nyrstar’s Peruvian assets were excluded from the Report as they were either not operational or not under Nyrstar control for most of the reporting period. This work was performed using ERM’s assurance methodology, which is in accordance with the Assurance Standard AA1000AS (2008). The criteria used were the AA1000AS (2008) Principles of Inclusivity, Materiality and Responsiveness, against which ERM reviewed Nyrstar’s performance reporting to provide Type 2 moderate assurance. To do this, we interviewed personnel and reviewed relevant documentation for Nyrstar’s six major wholly-owned smelters and the Tennessee mines. The subject matter for this Type 2 moderate assurance consisted of the following sections of the Report: Introduction and Performance Summary, Economic, Safety & Health, Environment, People and Community & Society. The scope of this assurance excluded a review of Nyrstar’s Global Reporting Initiative (GRI) Application Level, therefore this assurance statement makes no comment on Nyrstar’s self declaration of Application Level B+.

ERM’s Independence Nyrstar was responsible for preparing the Report. The ERM team of experienced assurance auditors, led by Jo Cain, Partner, was responsible for expressing assurance conclusions in line with the scope of work agreed with Nyrstar. During 2010, ERM undertook audits, site data verification, environmental liability work, due diligence reviews, contaminated land work, environmental management systems (EMS) work and health, safety and environment (HSE) training for Nyrstar at different sites across the group.

Our Conclusion On the basis of its scope of work, and in consideration of the limitations of the Type 2 moderate assurance engagement presented above, ERM concludes that, for the specified subject matter, the Nyrstar 2010 Sustainability Report appropriately addresses the AA1000AS (2008) Principles of Inclusivity, Materiality and Responsiveness for the 12 months to 31 December 2010.

Key Findings Based on the scope of work, and without affecting our assurance conclusion, ERM identified the following key findings against the Principles of AA1000AS (2008):

Inclusivity: Nyrstar facilitates the participation of stakeholders in its response to sustainability issues, for example the tenby10 project to reduce lead levels in blood in the Port Pirie community in South Australia.

Materiality: Sites focus their efforts on those sustainability issues considered to be material to their operations, such as historical landfill closure at Auby, soil and groundwater remediation at Balen, Overpelt and Hobart, and establishment of Group consistent safety & health programs at TN Mines.

Responsiveness: Nyrstar understands its range of stakeholder groups. The development of the Nyrstar Way, which serves to provide guidance on Nyrstar employee actions and behaviours, as part of the Nyrstar 2020 Initiative, and the creation of the Nyrstar Foundation, as part of the company’s Corporate Social Responsibility (CSR) Program, is a demonstration of Nyrstar’s understanding of stakeholder expectations.

Good Practice:

• RIMS usage: RIMS is a database tool for electronic data capture. This facilitates readily accessible and verifiable data. Nyrstar has now been using RIMS for a number of years and there is a level of maturity which has an associated high level of accuracy.

• StarNews publications: The Nyrstar Corporate and Site StarNews publications represent effective communication tools, which facilitate verification of site community engagement activities, as well as key Corporate initiatives.

• Sharepoint: Nyrstar’s internal use of a Sharepoint greatly facilitated the verification of health and safety standards and initiatives.

Areas for Improvement:

• Community engagement activities: The inclusion of all site community engagement activities in the site StarNews publications would ensure completeness and assist the verification of these activities.

• Wellbeing programs and initiatives: Nyrstar sites reportedly undertake a variety of wellbeing programs and initiatives. However, they could not be readily identified or verified.

Nyrstar’s continued commitment to sustainability reporting represents good practice.

Environmental Resources Management Limited (ERM) 20 April 2011 Melbourne, Australia

Environmental Resources Management Australia Pty Limited (ERM) is an independent global provider of environmental, social and corporate responsibility consulting and assurance services. ERM has prepared this statement for Nyrstar in accordance with ERM’s standard terms and the standard practised by members of the environmental consulting profession performing this type of service at the same time. No other warranty, express or implied, is given by ERM as a result of the provision of this statement. To the extent permitted by law, this statement is provided for informational purposes only, without the right to rely, and ERM will not be liable for any reliance which may be placed on this statement by a third party. This statement may not be used by any third party without ERM’s express written permission.

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