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SUSTAINABLE DEVELOPMENT REP

OR

T

07.09DEVELOPMENT

REPORT3rd issue2007-2009

SUSTAINABLESUSTAINABLE DEVELOPMENT R

EP

OR

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DEVELOPSUSTAINABLEDEV

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TABLE OF CONTENTSABOUT IMERYSSD STRATEGYOUR PERFORMANCE 2007ENVIRONMENT,HEALTH & SAFETYINNOVATIONCOMMUNITYHUMAN RESOURCES

32 INNOVATION

32 Reducing our environmental footprint

35 COMMUNITY

35 Adapting relations to the local context

38 HUMAN RESOURCES

38 Autonomous teams with common management principles

45 STATUTORY AUDITORS' REPORT

46 GLOSSARY

47 SUSTAINABLE DEVELOPMENT INDICES AND RATINGS

47 Contacts

04 ABOUT IMERYS

04 A world leader in industrial minerals

07 A dynamic growth strategy

08 SUSTAINABLE DEVELOPMENT STRATEGY

08 Corporate Governance

10 A global approach

14 Progress and objectives

16 The Imerys group and its shareholders

17 OUR PERFORMANCE 2007

17 Imerys Sustainable Development indicators

18 ENVIRONMENT, HEALTH & SAFETY

18 Prevention and audits as internal principles

20 Continuously improving health

22 Safety is a core value

25 Environment: an integral part of our culture

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This document is the third Sustainable Development report Imerys has published

in the last six years. As you can see, we have made signifi cant progress in 2007

towards our Sustainable Development goals.

In every pillar of our Sustainable Development strategy, programs have been

launched and progress has been made, often in a clear and measurable way.

We are proud of the success of our Safety Program and have a strong safety culture

at Imerys. Safety remains one of our core values. Our EHS Audit program, the Safety

University, the new reporting on Fatality Prevention and our “Serious Six Initiative”

have brought the Group to a frequency rate of 5.76 in 2007, versus the

11.79 measured in 2005.

Two new programs were launched in 2007 with the same approach and structure as our Safety Plan: an

Environment Improvement plan and an Energy Productivity plan. We expect that results from these strategies

will be quick to be realized and we strongly believe that performance improvements will be seen in 2008 in

these areas. Over the past year, for example, we have improved our energy effi ciency by 3.4%, and our CO2

footprint(1) by 5.1%, giving us a strong foundation upon which to build.

We have continued to register successes in ISO 14000 certifi cation, with 19 more plants achieving

certifi cation in 2007. Our new Environment Improvement program will provide a more systematic way to

measure and improve waste management, rejects and emissions from our plants. This program will include

the launch of a regional environmental training program, similar to our Safety University, along with a focus

on fi ve priority environmental protocols. This systematic approach will, in turn, have a benefi cial effect on

relations with the communities in which we operate. We are also successfully testing the use of biogas

as alternative energy in manufacturing in France and the United States – initiatives that will help reduce

the Group’s environmental impact as well as its production costs.

Our Sustainable Development Challenge was again a success. A range of exciting and diverse initiatives

was put forward, focusing on Community, Human Resources, Environment and also a responsible approach

to water management.

Last but not least, Imerys has launched several products with environmental benefi ts in the past year, as

we continually seek to develop innovative solutions in order to reduce the environmental footprint of our

products.

In 2007, the Group carried out twelve(2) external growth operations which strengthen its positions in

emerging countries, particularly Asia-Pacifi c. We will now concentrate all our efforts to apply the SD Group's

policies and best practice in these newly-acquired operations as we always do in our worldwide activities.

For Imerys, Sustainable Development is defi nitely more than a goal; it is a journey that all of our employees

are proud to make. Our approach to continuous improvement consists of progressively introducing

new initiatives or programs to bring all parts of the Group up to the required level. We are proud of our

performance in 2007 and hope that you enjoy reading about the progress that we have made to date, and

our directions for the future.

Gérard Buffi èreChief Executive Offi cer

(1) Specifi c impact.

(2) Including the acquisition of Astron China completed on February 5, 2008.

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Ecuador

The Tropicof Cancer

The Tropicof Capricorne

Atlantic Ocean

Indian Ocean Pacific Ocean

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HungaryAustria

Czech Republic

Slovenia

FinlandSweden

Germany

Belgium

France

Turkey

United Kingdom Netherlands

Ukraine

Switzerland

Italy

Tunisia

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Performance Minerals & Filtration��Performance Minerals��Minerals for Filtration

��Pigments for Paper Materials & Monolithics��Building Materials��Refractory Solutions

A world leaderin industrial mineralsImerys has a diverse and geographically broad portfolio of unique natural resources. This portfolio, coupled with an excellent grasp of large-scale mineral processing technologies and proven innovation capability, enables Imerys to design high value-added solutions for its local and international customers.

ABOUT IMERYS

IMERYS INDUSTRIAL LOCATIONS MAP

Minerals for Ceramics,Refractories, Abrasives & Foundry��Minerals for Ceramics��Minerals for Refractories��Fused Minerals��Graphite & Carbon

New Zealand

TaïwanMexico

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Peru

Chili

Zimbabwe

South Africa

United States

Japan

China

India

ThaïlandVietnam

Malaysia

Indonesia

Australia

Argentina�

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page4a7_ANG.indd Sec1:4 10/06/08 11:05:45

The Group’s products have a large number of applications in everyday life, including construction, personal care, paper, paint, plastic, ceramics, telecommunications and beverage fi ltration.

04 | 05

(1) In which we have industrial and commercial locations.

(2) One mining site may include several mines and quarries.

(3) Before other operating revenue and expenses.

(4) Before other operating revenue and expenses, net.

20%North America

5% Japan/Australia

20%Emerging countries

55%Western Europe of which20% France

2007 SALES BY REGION

30% Materials &Monolithics

16% PerformanceMinerals & Filtration23%

Pigmentsfor Paper

2007 SALES BY BUSINESS GROUP

31% Minerals for Ceramics, Refractories, Abrasives& Foundry

2007 KEY FIGURES

� 17,552 employees

� 47 countries(1)

� More than 260 industrial locations

� 120 mining sites(2)

� 29 minerals

� €3,402 million sales

� €478 million current operating

income(3)

� €317 million net income from

current operations(4)


ABOUT IMERYS(1)

MINERALS FOR CERAMICS, REFRACTORIES, ABRASIVES

& FOUNDRY

PERFORMANCE MINERALS&

FILTRATION

PIGMENTSFOR

PAPER

MATERIALS&

MONOLITHICS

SALES 2007 €1,051 million

(31% of Group’s sales)

€564 million


€799 million


€1,026 million


NUMBER OF

EMPLOYEES

2007(2)

6,421 3,408 2,769 4,718

COUNTRIES 24 16 19 16

ACTIVITY • Minerals for Ceramics

• Minerals for Refractories

• Fused Minerals

• Graphite & Carbon

• Performance Minerals

• Minerals for Filtration

• Pigments for Paper • Building Materials

• Refractory Solutions

MAIN PRODUCTS • Clays, feldspar, halloysite,

kaolin, pegmatite, quartz,

ceramic bodies and glazes,

ground silica, “Grès de

Thiviers”, natural colors,

derived colors

• Chamottes, andalusite,

calcined kaolin, alumina,

silica, bauxite, bentonite,

clays, metakaolins

• Fused aluminum oxides,

electrocast mullites, silicon

carbides, electrocast spinels,

fused zirconia, fused

magnesium oxydes

• Natural or synthetic graphites,

carbon black, cokes,

dispersions, silicon carbide

• Kaolins

• Ground and precipitated

calcium carbonates (GCC

and PCC)

• Dolomite

• Mica

• Feldspar

• Ball clays

• Diatomite, perlite, expanded

perlite, structured alumino-

silicate, vermiculite

• Kaolins

• Ground and precipitated

calcium carbonates (GCC

and PCC)

• Clay roof tiles, clay bricks,

chimney blocks and concrete

products

• Natural slates

• Unshaped and prefabricated

monolithic refractories

• Kiln furniture and components

in cordierite, mullite or silicon

carbide

MARKETS AND

APPLICATIONS

• Sanitaryware, tableware,

fi berglass, electro-metallurgy,

fl oor and wall tiles, fl at and

container glass

• Steel, glass and aluminum

industries, casting,

electronics, ceramics,

construction, cement, drilling

mud

• Automotive, machinery,

aerospace, construction,

automotive and steel

production, domestic

appliance applications

• Mobile energy, engineering

materials, carbon additives

for polymers, metallurgy,

hot metal forming

• Additives for sealants,

adhesives, paints, plas-

tics, catalyst substrates,

rubber, construction materials

(agriculture, food, construc-

tion, automotive, pharmacy,

personal care)

• Filter aids (beer, fruit juice,

edible oils, food, chemistry,

pharmaceuticals, sweeteners,

water, wine), functional addi-

tives (agriculture, polymers,

rubber, polishes, paint,

cosmetics, insulation, paper,

plastic fi lms), construction,

automotive

• Filler and coating applica-

tions for the global paper

industry: graphic papers and

packaging

• Roofi ng renovation and new

housing, historical monu-

ments, public buildings,

single-family housing

• Iron and steel, foundry,

aluminium, cement,

incineration, power

generation, petrochemicals

• Roof tiles, fi ne ceramics, fl oor

and wall tiles, thermal

applications, kiln construction

MARKET

POSITIONS

• European #1 in ceramic

bodies for porcelain

• World #1 in ceramic bodies

for sanitaryware

• European #2 in raw materials

for fl oor tiles

• World #1 in silico-aluminous

minerals for refractories

• World #1 in minerals for

abrasives

• World #1 in high performance

graphite powders


breathable polymer fi lms


fi ltration

• World #1 in diatomite

and perlite-based products

• World #2 in vermiculite

• World #1 in kaolin for paper

• World #2 in ground calcium

carbonate (GCC) for paper

• World #3 in precipitated

calcium carbonate (PCC) for

paper

• French #1 for clay roof tiles,

bricks and chimney blocks

• French #1 for natural slates

• World #1 in alumino-silicate

monolithic refractories

• World #1 in kiln furniture for

ceramic applications

(1) Group organization in 4 business groups as of February 13, 2008.

(2) As of December 31, 2007, the Group’s employees breakdown was as follows: Performance Minerals & Pigments: 4,215 ; Materials & Monolithics: 4,715 ; Ceramics, Refractories, Abrasives & Filtration: 8,400 ; Holdings: 222.


06 | 0706 | 07

A DYNAMIC GROWTH STRATEGYImerys’ activities generate substantial, recurring cash fl ow that the Group reinvests in its internal and external development.Its ability to integrate its acquisitions and improve and develop their performance swiftly is a key feature of its value creation model.

(1) Booked capital expenditure on depreciation expense

(2) Including the acquisition of Astron China fi nalized on February 5, 2008

(3) Net of divestments

(4) Pro-forma 2007 Astron China

INCREASING CAPITAL EXPENDITURE

Every year, Imerys invests to uphold the quality of its industrial assets and to develop through organic growth. Capital expenditure was particularly signifi cant in 2007, with more than €367 million invested, i.e., 186%(1) of depreciation expense.In addition to the capital expenditure needed to keep production facilities in good working order, substantial capital expenditure was invested to implement major industrial performance impro-vement programs in kaolins for paper and Minerals for Filtration. The plans will lead to substantial improvements in these activities’ cost bases in 2008. In parallel, development actions continued in the whole Group, among others with:• the start-up of new ground calcium carbonate (GCC) for paper

production unit in Niigata (Japan);• the production capacity extension in the Saint-Germer clay

roof tile plant and the Gironde sur Dropt (France) rectifi ed clay bricks plant. The capital expenditure in bricks is part of the plan announced in June 2007: €100 million invested by 2011 to address French growth in clay bricks (5% per year) and consolidate Imerys’ leadership in this market segment. Following production capacity increases at two existing rectifi ed brick plants by 2008, two new plants will enhance the activity’s industrial network in northern and southern France;

• the acquisition of strategic mineral reserves: marble in Europe and China, as well as feldspar in Turkey.

OUR DEVELOPMENT IN HIGH-GROWTH ZONES

The Group pursued a very active acquisitions policy in 2007 with 12 operations(2) completed for a total of €310 million, representing approximately €270 million in additional sales(3) and approximately €30 million in operating income.

With the acquisitions of UCM (April 2007) and Astron China (February 2008), Imerys became the world #1 in fused zirconia products, an excellent addition to its offering in refractories, ceramics and investment casting. UCM is also active in fused magnesium oxyde.In parallel, the Group signifi cantly increased its exposure to growth in emerging countries by carrying out most of its acquisitions in such zones in 2007 (10 out of 12). Emerging countries now represent(4) 20% of Imerys’ sales, compared with 16% in 2006.In China, the acquisition of Astron China gave Imerys the criti-cal mass it needed with fi ve modern and effi cient new plants and a distribution network with good geographic coverage. The operation is in addition to the acquisitions of Yilong and Xinlong (65% Imerys-owned), companies specializing in andalusite and vermiculite production, Baotou (85%), a producer of natural high-performance graphite, and ZAF (60%), a third joint venture in brown corundums for abrasives in China.In India, the Group gained a fi rm foothold through the acquisitions of ACE, the leader in silico-aluminous monolithic refractories, and Jumbo Mining, a feldspar producer. Imerys already had an industrial base in pigments for paper in India.The acquisitions of Perfi ltra, the Argentinean leader in perlite for fi ltration, and the takeover of VKV (86%), a Ukrainian company specializing in the production of chamottes (calcined clays) for refractory markets, also positioned the Group on high-growth markets.

Andalusite


SD STRATEGY

ROLES AND RESPONSIBILITIES

Since the last Sustainable Development report

published in 2006, the composition and function

of Imerys’ Board of Directors have remained

unchanged. These elements are reviewed and

assessed on an annual basis by the Board of

Directors and may be adjusted, if required,

to refl ect best practices demonstrated by our

peers. Information on our current corporate

governance, including specialized committees,

membership, roles and remuneration of the

Board of Directors and specialized Committees

can be found in our Annual Report and in

the Internal Charter adopted by the Board

of Directors. These documents are publicly

available on Imerys’ group website

www.imerys.com.

An Executive Committee chaired by the CEO

is responsible for the management of Imerys’

operations. The Executive Committee is made

up by the heads of Imerys business groups and

the main corporate departments. Responsibility

for our Sustainable Development strategy,

performance and action plans is allocated to two

Board level committees, the Strategic and Audit

Committees. The Board of Directors decided

in 2008 to give to the Audit Committee the

responsibility to conduct an annual review of our

Sustainable Development organization, policy

and achievements, and report its fi ndings to the

Board of Directors.

SUSTAINABLE DEVELOPMENT STEERING

COMMITTEE

The SD Steering Committee meets quarterly

and is responsible for establishing objectives

and targets as well as monitoring achievements.

The SD Steering Committee is also responsible

for establishing performance indicators that

meaningfully measure the Group’s Sustainable

Development performance.

The SD Steering Committee reports to the CEO

and is comprised of the following company

offi cers:

• Vice-President, Innovation, Research &

Technology & Business Support(*)

• Vice-President, General Counsel & Company

Secretary(*)

• Vice-President, Human Resources(*)

• Vice-President, Environment, Health & Safety

• Head of Financial & Corporate

Communications

• Internal Communications Manager

The SD Steering Committee is supported by

the SD Working Group. The members of the

SD Working Group are full-time environmental,

health, safety and human resource professionals

from our operations. The members of the

SD Working Group are representative of the

business units as well as the geography

where the Group conducts its business. As

the members are from South America, North

America, Asia and Europe, the SD Working

Group conducts most of its business by web

conference. They meet face-to-face once per

year for their annual strategic planning event.

BUSINESS ETHICS

Since our last report, we have issued a

Group Code of Conduct that describes the

ethical rules by which everyone in the Group

must abide. This covers aspects of business

ethics, corporate governance, human rights

and environmental protection. The Code of

Conduct is posted on the Imerys group website

to which all employees and interested third

parties have access. Signifi cant progress has

been made in 2007 in raising awareness and

training staff on the Code, although we intend

to extend this communication and education

process in 2008. One page of the Imerys News

magazine #17 was dedicated to the Code of

Conduct in order to raise in-house awareness.

Regular presentations have been made to local

managers and selected groups of employees,

and mandatory interactive online training is

now established in the United States and was

followed by around 95% employees in 2007.

Corporate GovernanceWe recognize that being a responsible business organization is not just about recognizing and managing our impacts on the environment and society, but also managing our business soundly, effectively and transparently.

(*) Indicates a member of the Imerys Executive Committee.Sylacauga site (Alabama, United States)

page8a16_ANG.indd 8 10/06/08 11:06:29

RISK MANAGEMENT AND INTERNAL

CONTROLS

A new department, Internal Controls, was fi rst

created at the Group level in early 2006. This

department has three primary responsibilities:

risk management, administration of Group

policies and procedures and assessment of

internal controls.

Risk management

A risk-mapping exercise was fi rst undertaken at

the end of 2006 to determine and discuss the

main fi nancial and business risks faced by each

activity and how those risks are managed. The

output identifying the key risks and associated

levels of control at a Group level has been

communicated to the Executive Committee and

all operational managers. This risk mapping

was expanded in 2007 and will be reviewed

and updated every year. No specifi c Sustainable

Development issues were identifi ed.

As our business moves into developing

countries, there are signifi cant potential risks

associated with environment, health and

safety. The Group anticipates that the local

regulations will become more stringent in the

future. The Group’s strategy is to enhance the

environmental, health and safety standards at

newly-acquired companies in emerging markets

to prepare them for these changes.

08 | 09

Group policies and internal controls

Policies for corporate governance and Group

functional activities (such as fi nance, human

resources and legal) were developed and

fi nalised in 2006 and are available to all

employees through the Imerys intranet. These

principles, rules or procedures applicable to

all business activities, provide for consistency

in these areas. In line with our decentralized

management approach, responsibility for

implementing these policies lies with our

business units.

Internal control assessment

As part of assessing compliance with our

policies and effi ciency of our internal controls,

we are rolling out an internal self-assessment

program with the aim of reviewing 15 identifi ed

key internal processes in the Group’s main

legal entities that represent 80% of Imerys

consolidated turnover by the end of 2009.

EXECUTIVE COMMITTEE

(as of February 13, 2008)

• Gérard Buffi ère, Chief Executive Offi cer

• Jérôme Pecresse, Chief Operating Offi cer,

Minerals for Ceramics, Refractories, Abrasives

& Foundry business group

• Christian Schenck, Executive Vice-President,

Materials & Monolithics business group

• Olivier Hautin, Vice-President,

Pigments for Paper business group

• Daniel Moncino, Vice-President,

Performance Minerals & Filtration business

group

• Christophe Daulmerie, Chief Financial

Offi cer and Vice-President Strategy

• Denis Musson, Vice-President,

General Counsel & Company Secretary

• Thierry Salmona, Vice-President, Innovation,

Research & Technology & Business Support

• Bernard Vilain, Vice-President,

Human Resources

BOARD OF DIRECTORS

Non-independant members: 7 Independant members: 7

Aimery Langlois-Meurinne, Chairman Aldo Cardoso

Paul Desmarais, Jr, Vice-Chairman Eric Le Moyne de Sérigny(1)

Gérard Buffi ère Gilbert Milan

Jacques Drijard Jean Monville

Jocelyn Lefebvre Grégoire Olivier

Maximilien de Limburg Stirum Robert Peugeot

Thierry de Rudder Jacques Veyrat

(1) In June 2008, Mr. Le Moyne de Sérigny will cease to have independent status because of the length of his

successive terms as Director of Imerys (more than 12 years).

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SD STRATEGY

As a global organization, we have a long-term

commitment to operate in a responsible manner

for our employees, our shareholders, our

communities and the environment. Based on

our stakeholder engagement activities, we have

identifi ed that our stakeholders expect us to:

• Manage our operations in an environmentally

responsible manner including the effi cient use

of mineral reserves;

• Provide safe and healthy work environments;

• Ensure positive, challenging and rewarding

careers for our employees while contributing

to their social well-being by providing relevant

benefi ts;

• Be a responsible member of the communities

in which we operate;

• Develop and manufacture quality products and

technologies that are environmentally safe.

We recognize that failing to meet any one of

these expectations could impact adversely

our activities and their license to operate. As

a consequence, environmental and social

performance is a key component of the Group’s

performance. This report, our third global

Sustainable Development Report, provides

specifi c information on this performance.

OUR SD JOURNEY SO FAR

Sustainable Development programs have been

a core part of day-to-day business for many

years across our operations. In 2003, after

consolidating several signifi cant acquisitions,

Imerys decided that a Group Sustainable

Development strategy was necessary to defi ne

the Group’s commitment and expectations.

Our fi rst Group level Sustainable Development

Charter and strategy was adopted in early 2004

and covered six key action areas: Environment,

Health & Safety, Human Resources, Community,

Innovation and Corporate Governance.

Our fi rst Sustainable Development report, issued

in late 2004, communicated our strategy and

provided information on our management of

environmental and social issues. During 2005,

our Sustainable Development infrastructure

and programs evolved, and a network of

senior managers and specialists was created

to establish and implement new Sustainable

Development action plans. One signifi cant new

program launched in 2005 was the Sustainable

Development Challenge, an internal competition

designed to identify and highlight the excellent

environmental and social practices in our

operations. Following its success in 2005, the

SD Challenge was repeated in 2006 and 2007

(see page 13).

The SD Challenge and the Group’s other

Sustainable Development achievements in

2004 and 2005 were described in our second

Sustainable Development report issued in 2006.

At the request of the SD Steering Committee,

the SD Working Group began developing a new

SD strategy in July 2006. Meeting via web

conference, the SD Working Group developed

a list of over 100 best practices implemented

by world-class companies and created a draft

strategy that was concluded at a face-to-face

meeting in Imerys’ Paris headquarters in

October 2007.

Four priorities for action emerged from this

process:

• Communicate clearly the Imerys SD vision,

values and targets;

• Better coordinate among functions and

operations;

• Select appropriate targets through a

transparent process;

• Develop a mature and fl exible data collection

network.

A global approachSince 2004, Imerys has made concrete improvements towards the sustainability of its businesses. After initially focusing on safety, human resources and corporate governance, we are now tackling the other elements: innovation and environment.

“We develop our relationships with SRI investors and rating agencies”

Cornwall (Great Britain)

page8a16_ANG.indd 10 10/06/08 11:19:47

Specifi c objectives supporting these four

priorities for each of our actions areas were

subsequently developed. Core Teams were

established for each of the areas of Human

Resources, Environment, Health & Safety and

Community to support the strategic planning

process by providing subject matter expertise.

For Corporate Governance and Innovation,

this expertise was provided directly by the

Vice-President, General Counsel & Company

Secretary and the Vice-President, Innovation,

Research & Technology & Business Support,

respectively.

After identifying the 2007 objectives, the

integrated network of senior managers and

specialists focused specifi cally on the priority

to “clearly communicate the vision, values and

targets”. This entailed three actions:

• Revision of the SD Charter to more accurately

refl ect the current Imerys vision on SD;

• Creation of a twelve-page brochure

communicating the 2006 SD strategy

including the 2007 targets;

• Increase of relationships with SRI investors

and rating agencies.

These broad initiatives on communication have

been further supported by other more focused

or specifi c programs such as the Supplier

Qualifi cation System described page 12 which

has enabled sustainable development issues and

improvement actions to be communicated within

the purchasing community.

10 | 11

OUR SUSTAINABLE DEVELOPMENTCHARTER

We believe that Sustainable Development is essential to achieve the fi nancial and non fi nancial goals of the Group. We believe that Sustainable Development includes economic success, social equity and environmental responsibility. We organize our Sustainable Development efforts in the following six action areas:

ENVIRONMENT: We identify the environmental aspects and impacts of our sites, and wherever possible, prevent or otherwise minimize harmful effects of their activities on the environment.HEALTH & SAFETY: We identify health and safety risks at our sites, and wherever possible, prevent or otherwise minimize these risks.HUMAN RESOURCES: We enable our employees to realize their capabilities through professional development, while contributing to their social well-being by providing relevant benefi ts.COMMUNITIES: We assess and act to continually improve the impacts of ouroperations on our stakeholders and communities, taking different cultures and customs into consideration.INNOVATION: We continually seek to innovate our processes and products to improve our environmental footprint. We believe that our environmental footprint includes product stewardship.CORPORATE GOVERNANCE: We implement and continually improve our corporate governance practices to fulfi ll the above commitments and meet the best practices of our company peer group.

Each operating activity within the Group will implement these Sustainable Development principles in their business plans and decision-making process. We will continually improve and measure our Sustainable Development activities.

Gérard Buffi èreChief Executive Offi cer

Christopher Sheehey, Vice-President, Environment, Health & Safety,Sustainable Development Coordinator

Newquest plant (Bhigwan, India)

page8a16_ANG.indd 11 10/06/08 11:24:24

SD STRATEGY

DEVELOPING SD CRITERIA FORSUPPLIERS THROUGH INTERNALAND EXTERNAL ENGAGEMENT

We have made progress towards including Sustainable Development criteria into our supplier selection process, and have developed a supplier qualifi cation tool which will be rolled out to all Purchasing Managers in 2008.

In order to develop this Supplier Qualifi cation System, we have conducted both internal and external benchmarking studies to identify best Sustainable Develo-pment practices with suppliers. More than 100 of them have been identifi ed and will be published on our purchasing intranet site. The process of developing this tool has provided great opportunity for engaging on sustainable development matters both within the Imerys purchasing community and more widely with our key suppliers.

The evaluation criteria of this Supplier Quality System will include four SD factors: Environment, Safety, Human Rights and Labor practises. For each criterion, suppliers will be required to complete a self assessment form covering: compliance with local laws, acceptance of the Imerys criteria and management systems. For Human Rights, we specifically want our suppliers to provide declaration that they comply with generally accepted standards such as that published by the International Labor Organization (ILO) on child labor, etc. Audits of individual suppliers will be conducted on a selective basis to strengthen the self-assessment process.

In 2008, we plan to:• Set up this Supplier Quality System as an electronic tool to avoid paper

consumption;• Train our Purchasing Managers to conduct supplier audits and to use the

Qualifi cation Tool;• Establish a plan for future supplier assessment and audits.

OUR SD REPORTING JOURNEY

Throughout the development of our reporting,

we have sought to continually improve data

collection, collation and reporting, and have

responded to recommendations and suggestions

for improvement made by our independent third

party auditors.

The assurance work conducted for our 1st SD

report led to an opinion on the overall effi ciency

and methods of data collection used, as well as on

the quality of a limited number of indicators for a

sample of operations. Following this assessment,

we took actions to integrate the suggested

improvements into the systems and processes for

data collection, collation and reporting.

For the 2005 reporting, the auditors undertook

a detailed review of the reporting procedures

in place for human resources, safety and

environment indicators. On the basis of their

fi ndings and recommendations, we continued to

develop and formalize our reporting procedures,

in particular concerning controls. These

improvements are refl ected in this 3rd report.

OUR INDICATORS

Each of the indicators included in our

reporting has been selected in line

with our key focus areas, and has been

selected and developed in conjunction

with key personnel within the business.

At the start of our SD reporting, working

groups were actioned with identifying

the key performance indicators for

environmental and safety performance

and developing guidance applicable to

our global operations. In each case, the

indicator selection was focused on those

issues of key relevance to our business

operations. Guidance such as the Global

Reporting Initiative (GRI)(1) and the scope

of reporting by our peers was considered

in this process. A specific analysis of our

consistency with the GRI is provided on the

Imerys internet at www.imerys.com.

(1) GRI is a Collaborating Centre of the United Nations

Environment Program. Their vision is to encourage

an environment in which “reporting on economic,

environmental, and social performance by all organizations

becomes as routine and comparable as fi nancial

reporting”. They utilize a consensus-seeking process and

most recently have published the G3 Reporting Guidelines.

In February 2005, GRI also published the “GRI Mining and

Metals Sector Supplement, Pilot Version 1.0.”.

“Reporting in linewith the GRI(1)”

page8a16_ANG.indd 12 10/06/08 11:45:13

12 | 13111222 111333

22 LOCAL INITIATIVESRECOGNIZED OVER THREE YEARSIn 2007, the in-house Sustainable Development Challenge proved a success for a third year. Open to every activity in the Group worldwide, the competition is designed to motivate Imerys’ employees commitment to sustainable development by rewarding the actions taken by local line management teams. The projects refl ect everyone’s determination to act as a responsible citizen in the communities where the Group carries out its business. Twenty-two initiatives have been rewarded to date.

Since 2005, when the Challenge was launched, 87 projects have been entered in different categories, including Environment (reduction of energy consumption, site rehabilitation), Innovation, Human Resources and Community Relations. Each year, the jury has been comprised of a representative from each of Imerys’ business groups and the members of the SD Steering Committee.

In 2007, the jury singled out initiatives with signifi cant environ-mental or community impact. Prize money of €140,000 was awarded to the fi ve winners:• Ecological restoration of the Quartz et Sables du Lot quarry

(France – Minerals for Ceramics);• Use of landfi ll gas by the Langley plant

(USA – Minerals for Ceramics); • Creation of innovative, less energy-intensive products

(Brazil – Pigments for Paper South America);• Literacy program

(United Kingdom – Performance Minerals and Pigments for Paper Europe);

• Creation of a fowl run and grain mill around Shawa mine(Zimbabwe – Minerals for Filtration).

In fall 2007, the Group reviewed the progress made by the win-ning projects from the two previous years of the SD challenge (2005 and 2006) and communicated the progress throughout the organization in a special SD issue of the in-house magazine Imerys News.

Most of the initiatives are still active, with important new deve-lopments in several cases: • The reforestation program in Cornwall (UK) has made signifi cant

progress with 476,000 trees planted;• In Brazil, the school set up on the Treibacher site continues to

teach children with an emphasis on hygiene and housekeeping. The company has also developed a dengue disease prevention program;

• Following the damage caused by the 2004 tsunami, the rebuil-ding of Sigli village in Indonesia has made good progress. A second construction phase of 260 houses is under way. An additional 200-ton shipment of roof tiles has been delivered from the Pargny (France) plant. In 2007, the partnership with “Les Architectes de l’Urgence” also evolved as Imerys TC pledged to select fi ve young bricklayers and bear the cost of their relief assignment;

• The “Child & Art” program is being extended in the Vila do Conde region (Barcarena, Brazil). The Group’s contribution funded the renovation of sanitary and other facilities. A sports team and rea-ding room have been established. The artistic disciplines offered to children now include folk dancing, theater and music.

The “Child & Art” program (Brazil)

page8a16_ANG.indd 13 10/06/08 11:47:27

SD STRATEGY

Progress and objectivesIn the years to come, our strategy is to progressively roll out new SD initiatives in order to systematically bring all Imerys units at the required level in each segment of our SD strategy.

We recognize that a proactive Sustainable

Development strategy can become a competitive

advantage and this is our long-term goal. We

have already identifi ed some areas where our

activities are helping us reach this goal, for

instance:

• increasing demand for sustainable

products could open new markets for

Imerys applications. Our unique know-

how in transforming minerals into useful

applications means that we are well placed

to take advantage of this potential and are

already having success in developing more

sustainable alternatives for certain product

ranges (see page 33);

• the escalating costs of fossil fuels and carbon

emission credits should make our drive for

energy effi ciency a long-term commercial

competitive advantage (see page 27).

More generally, it is clear that the wide range

of Sustainable Development issues affecting

mineral extraction, from safety to biodiversity to

landscape aesthetics, will continue to provide

operational challenges that we will need to

address. A proactive approach to Sustainable

Development should help us be better prepared

for these challenges and we believe that our

2008 objectives will help us progress further

towards this ultimate goal. Whilst we do not

yet have all the answers, we consider that the

Group’s Sustainable Development programs are

progressing in the right direction.

2007 OBJECTIVES PROGRESS

ENVIRONMENTAL

Add water and waste KPIs Achieved

10% increase in KPI for environmental management systems/ISO 14000 1% increase achieved

5% improvement in energy effi ciency 3.4% improvement but CO2 reduction 5.1% achieved

HUMAN RESOURCES

Defi ne and begin implementation of a standard of minimum benefi ts in Brazil and China Achieved

Establish Imerys literacy guidelines in order to offer education in basic literacy to all Imerys employees Achieved

Implement a crisis management and communication system Initiated only

Add KPI for seniority Achieved

SAFETY

Lost Time Accident rate less than 6.0 Achieved

Post acquisition safety seminars at all new acquisitions 16 events achieved

11 Safety Culture Improvement Team events 20 events achieved

7 Safety University events6 events achieved (post-acquisition seminars determined to be more strategically important)

COMMUNITY

Finalize community relations policy and communicate it to site managers Achieved

INNOVATION

Implement at least one process and one product that represent a progress for the environment Achieved

page8a16_ANG.indd 14 10/06/08 11:50:12

14 | 15

2008 OBJECTIVES

ENVIRONMENTAL

Add key performance indicator for “Environmental Incidents”

Complete 4 regional environmental training sessions

Complete 10 Environmental Support Team events

Obtain ISO 14001 certifi cation at all Building Materials facilities producing over 100,000 tons per year

SAFETY

Zero fatalities

5.0 employee lost time accident rate

Install SafeStart© (or equivalent behavior-based safety system) on additional 30 sites (or involving 1,500 additional employees)

Complete 4 Safety University sessions in France, Great-Britain, China and South Africa

Complete orientation events for all new acquisitions

HUMAN RESOURCES

Launch a minimum of at least one pilot literacy/numeracy program in an operation within each activity

Develop minimum benefi ts programs in Brazil and Germany

Strengthen education and training on Code of Ethics and Business Conduct

Strengthen education and training on crisis communications

COMMUNITY

Develop guidelines for establishing community liaison groups at critical

operations

ENERGY

Establish and monitor Energy Savings Action Plan

Improve Energy Effi ciency

PURCHASING

Train Category Managers on the Supplier Qualifi cation System (SQS)

Identify highest risk product categories

Apply SQS to highest risk category

INNOVATION

Implement at least one process and one product that represent a progress for the environment

GOALS FOR THE FUTURE

ENVIRONMENTAL

Implement additional performance indicators consistent with the Global Reporting Initiative

Continue Regional Environmental Seminars and Environmental Support Team events

Complete water use sensitivity analysis

Increase scope of management systems

SAFETY

Maintain zero fatalities

Continue to reduce the employee lost time accident rate

Increase scope of behavior-based safety

Continue Safety Universities and orientations

Launch education and training on ergonomics

HUMAN RESOURCES

Continue literacy/numeracy improvements

List the existing initiatives in favor of disabled persons within our operations

Develop minimum benefi ts programs for additional geographic areas

Develop a new KPI on absenteeism

COMMUNITY

Implement guidelines for establishing community liaison groups at critical operations

ENERGY

Further improve Energy Effi ciency

PURCHASING

Apply SQS to additional categories

INNOVATION

Develop additional processes and products representing a progress for the environment

Factor carbon footprint into new product development

page8a16_ANG.indd 15 10/06/08 11:52:36

SD STRATEGY

OPEN DIALOG WITH OUR SHAREHOLDERS

AND THE FINANCIAL COMMUNITY

Imerys strives to build a relationship of trust and

openness with its shareholders. As part of this, we

have created several communication tools to help

our shareholders keep informed of our activities,

strategy, results and outlook. This includes:

• An annual corporate brochure;

• An Annual Report fi led as a Reference

Document with market regulators AMF;

• A semi-annual report on the fi nancial

statements to June 30;

• A Letter to Shareholders published four times

a year;

• A Sustainable Development report every two

years;

• The website www.imerys.com is frequently

updated to give the latest information on the

Group;

• A dedicated service to answer any questions:

Imerys

Shareholder Relations

Financial Communications

154, rue de l’Université

75007 Paris - France

Tel. +33 (0)1 49 55 66 55

Fax +33 (0)1 49 55 63 98

E-mail: [email protected]

We also have frequent meetings with fi nancial

analysts and investors to present the Group’s

results and strategy.

In 2007, we targeted an increased level of

engagement on Sustainable Development with

the fi nancial community focusing on socially

responsible investments. As part of this initiative

we met around 20 SRI analysts and investors

at roadshows or individual interviews. Many of

the action plans presented in this report are

stemming from this positive and fruitful dialog.

The Imerys groupand its shareholdersImerys is listed on Euronext Paris. Its main shareholders, the Frère and Desmarais families(1), hold 54.09%(2) of its capital. The latest shareholder survey(2) showed 205 institutional investors holding 42.27% of outstanding shares. Individual shareholders represent approximately 3.43% of capital while employee shareholders account for 0.21% (21% of Group employees).

As of December 31, 2007 Number % of % of

of shares capital voting rights

Pargesa 17,246,462 27.32% 35.38%

GBL(3) 16,898,778 26.77% 34.67%

Sub-total 34,145,240 54.09% 70.05%

Other shareholders(4) 28,981,616 45.91% 29.95%

LETTER TO SHAREHOLDERS NOVEMBER 2007

#41

Message from the Chief Executive Officer

Dear Shareholder,

Since the beginning of the year, the Group’s overall market environment has been positive. Only the US construction sector slumped further from the endof the summer but it represents just 5% of the Group’s outlets and production capacitieswill be adjusted accordingly. Moreover, the US dollar continued to depreciateand some raw material prices rose towards the end of the period, weighing on the improvement in our operating performance in the 3rd quarter.

In that context, Imerys proves its robustness by once again posting vigorous organic growth(1) for the first nine months of the year with increases of + 4.2% in sales and + 8.6% in current operating income. Net income from current operationsgrew + 3% over the period. This improvement in the Group’s main financialindicators is a source of satisfaction.

In 2007, we have resumed substantial external growth. The 11 acquisitionsimplemented reflect the Group’s determination to bolster its presence in fast-growing zones including China and India, but also Argentina and Ukraine. Our greaterexposure to these dynamic markets will form a new growth lever for the Group from 2008.

The major restructuring plans announced last year are being implemented onschedule and will lead to structural improvement in our cost base for both kaolinsfor paper and the filtration business (World Minerals). In 2008, the Group’scompetitiveness will be significantly enhanced.

For 2007 as a whole, we maintain our goal of growth in net income from currentoperations. However, that growth is likely to be modest because of the impact of the USdollar’s depreciation on our financial statements in euros. In 2008, the optimizationactions taken and acquisitions completed in 2007 will again enable us to support yourGroup’s growth. I have no doubt that those who follow its progress closely will then appreciate it for its true value.

Thank you for your loyalty.

Gérard Buffière

(1) Growth at comparable Group structure and exchange rates

154-156 rue de l'Université - F - 75007 Paris

Téléphone : + 33 (0) 1 49 55 63 00 - Télécopie : + 33 (0) 1 49 55 63 01 - www.imerys.comTRANSFORM TO PERFORMTransformer pour valoriser

ANNUAL REPORT 2007

(1) Belgian and Canadian family groups, Frère and

Desmarais.

(2) As of December 31, 2007

(3) For the purpose of this table, GBL represents all the

companies in Groupe Bruxelles Lambert. Shares in the

Company have been held since December 15, 2004 by

Belgian Securities BV, a subsidiary of Groupe Bruxelles

Lambert.

(4) Including 5,110,441 shares held by the Prudential Plc

group.

page8a16_ANG.indd 16 10/06/08 11:29:52

OUR PERFORMANCE 2007

Imerys Sustainable Development indicators

16 | 17

Health & Safety• Frequency rate

• Severity rate

Environment• Number of prosecutions and amount of fi nes

• Water use

• Energy effi ciency

• Energy consumption

• CO2 emissions and Energy use

• Waste generation and recycling

• Number of ISO 14001 or EMAS certifi ed sites

Human Resources• Headcount by business group, geographic zone

and functions

• Percentage of women

• Seniority

• Age

• Working hours lost through strikes

• Employee Shareholders

Full information concerning perimeter and methodology on each of the action

areas are provided on the Imerys internet at www.imerys.com in Sustainable

Development section.

page17a23_ANG.indd 17 10/06/08 11:07:13

At a Group level, we focus on clearly defi ning

the EHS standards we expect, and through

employee training programs support the

operations to achieve these standards.

Responsibility for developing systems and

programs to meet the Group’s defi ned standards

lies at an operational level in accordance with

Imerys’ overall decentralized management

approach. The Group’s standards are focused on

the key EHS risks and impacts associated with

our operations and products to ensure relevance

and help target our resources.

Our Group EHS team provides support and

assistance to local operations as needed, as well

as working to continually review and update our

standards and increase awareness and capacity

at an operational level through employee

training.

Our progress in EHS management and

performance is tracked through two key

methods. First, we use a set of Key Performance

Indicators (KPIs) to monitor our performance

progress, and second, we assess the

compliance of our operations with local EHS

legal requirements and the Imerys 27 Global

Standards through our EHS Audit Program.

Prevention and auditsas internal principlesOur management approach for Environment, Health & Safety (EHS) is refl ected by the principles contained in our EHS Charter.

ENVIRONMENT, HEALTH & SAFETY

ENVIRONMENTAL, HEALTH& SAFETY CHARTER

Imerys believes that high standards of Environmental, Health & Safety (EHS)performance are essential in all its businesses in order to achieve the fi nancial and non-fi nancial goals of the Group. Each person at Imerys is responsible for implementation of our high standards for EHS. We are committed as a Group to the following principles:

• We identify risks to the environment on each of our sites and, whereverpossible, prevent or otherwise minimize harmful effects of their activities on theenvironment;

• We identify health and safety risks on each of our sites, and wherever possible, prevent or otherwise minimize these risks;

• We will, at a minimum, ensure compliance with all applicable EHS laws and regulations as well as Imerys EHS policies and procedures;

• We are committed to continual improvement of our EHS performance through management systems;

• We will conduct periodic audits of our operating facilities to assess compliance with EHS laws and regulations and to drive continual improvement.

page17a23_ANG.indd 18 10/06/08 11:11:52

The Executive Committee regularly examines

EHS performance indicators and the result of

audits in the different activities. The Group’s

Sustainable Development action plans and

performance are examined regularly by the

Group’s Audit and Strategy committees. The last

assessment was conducted in December 2007.

COMPLIANCE AND EHS AUDITING MASTER

Imerys encourages a culture that goes beyond

compliance. Nevertheless, we believe that

compliance programs are important to lay the

foundations for excellence.

To establish solid compliance foundations,

Imerys has created a set of Global EHS Protocols

18 | 19

Though the number of prosecutions is substantially the same, the amount of fi nes increased slightly from 2006 to 2007. This slight increase is related toenforcement of the air regulations in the United States.

(1) Does not include government action in response to June 2007 release

of kaolin from Rio Capim Caulim operation – see page 26.

NUMBER OF PROSECUTIONS

1916

2007(1) 2006

AMOUNT OF FINES IN EUROS

50,648

64,483

2007(1) 2006

applicable to all operations worldwide. Currently,

there are 14 safety protocols, 5 health protocols

and 8 environmental protocols. These protocols

have been communicated to the managers and

relevant personnel of all our operations and are

resident on the Imerys EHS intranet.

The Imerys EHS Audit Team checks compliance

with these protocols as well as local regulations.

The EHS Audit Team comprises approximately

15 of the leading EHS professionals from the

Imerys operations, under the leadership of the

Group staff. These EHS professionals are trained

annually to administer approximately 35 audits

each year under the Group’s EHS Auditing

Procedure. The audit schedule is determined

using a risk matrix which weighs the operations

based on aspects such as size, proximity to

population, proximity to sensitive ecosystems,

highly regulated legal system and lost time

accident rate.

Prior to each audit, the internal EHS

professionals are paired with one or more

external consultants, which provide expertise

in the local regulations and languages as well

as an independent perspective. To ensure

consistency among the audits conducted

throughout the year, the EHS professionals

conducting each audit are required to obtain

peer review from other team members prior

to presenting the audit results to the site

managers. After the audits, the sites’ corrective

actions are tracked to completion through a

web-based software system.

“EHS professionals are trained annually to administer internal audits”

page17a23_ANG.indd 19 10/06/08 11:14:51

HEALTH

Continuously improving health In 2005, the Group initiated an industrial hygiene program to supplement the actions of individual operations. Initially this program was focused on reviewing compliance with applicable local regulations. These efforts have continued and are being supplemented with new programs.

OCCUPATIONAL DUST EXPOSURE

Dust exposure is assessed regularly across

the Group. These assessments are focused

mainly on employee exposure to mineral dust.

Group standards and guidance documents have

been created to support sites in establishing

an occupational dust management program

(including risk assessment, exposure monitoring,

control measures and health surveillance) and

providing awareness to our employees on the

risks related to occupational dust exposure.

Most of Imerys’ European operations participate,

through their local professional organizations,

in the fi rst bipartite cross sectorial agreement

in the workers health domain and will implement

the “Social Dialogue Agreement on Workers

Health Protection through the Good Handling

and Use of Crystalline Silica and Products

Containing it”. This bipartite agreement,

signed on 25 April 2006 in the presence

of the EU Commissioner for Employment,

Social Affairs and Equal Opportunities, consists

of 17 European Employer and Employee

associations, representing 14 sectors which

handle, use or produce crystalline silica.

Sylacauga (Alabama, United States)

page17a23_ANG.indd 20 10/06/08 11:24:01

A COMMITMENT TO SAFER PRODUCTS THROUGH REACh

Imerys is preparing for the implementation of the European Union Regulation on the Registration Evaluation and Authorization of Chemicals (REACh). REACh is directed at manufacturers and importers of prescribed substances. An exemption in the regulations covers “minerals which occur in nature”. This exemption signifi cantly reduces the impact of these new regulations on our operations. However, we have identifi ed two possible impacts:

• Firstly, suppliers providing Imerys with chemicals may experience an increase in transaction costs to comply with REACh. Analysis of our suppliers does not indicate this is likely to be a material impact;

• Secondly, a few of our products are not covered by the exemption and will be subject to REACh. The registration process will stretch over the next 11 years and will begin with a pre-registration phase later this year.

We have appointed a Group level REACh Implementation Team, to assess REACh impacts on our operations and product portfolio. The team objectives are to confi rm that our suppliers are implementing REACh and enable timely compliance for all of Imerys.

The Group has also set up different REACh working groups covering supply chain and marketing department. Their role is to:• Assess REACh impact on our business and communicate on REACh internally

(provide standards and guidance document);• Contact suppliers to assess their REACh action plans;• Respond to customers’ requests.

We are confi dent that these preparations will enable Imerys to incorporate the changes resulting from the REACh initiative into its business without material impacts.

20 | 21

The objectives of the program are:

• Protecting the health of employees;

• Minimizing exposure to respirable crystalline

silica by applying the best practices;

• Increasing knowledge about potential health

effects of respirable crystalline silica.

The fi rst report on the application of the

agreement will occur in June 2008.

OCCUPATIONAL NOISE EXPOSURE

Machinery used at many Imerys facilities

typically includes crushing and grinding units

that generate signifi cant noise. Over the last

three years, Group standards and guidance

documents have been created to support sites

in establishing occupation noise management

programs (including risk assessment, exposure

monitoring, control measures and health

surveillance) and raising our employees

awareness of the risks related to exposure to

noise. Noise surveys are implemented in our

plants in order to determine noise exposure

levels, and if necessary, establish noise exposure

reduction programs in compliance with local

regulation and Imerys requirements.

ERGONOMICS AND WORKING CONDITIONS

Although some of our sites are highly

automated, manual-handling issues can exist

for specifi c activities involving the movement

of heavy loads or repetitive tasks. The Group

objective is to provide guidance, standards and

training to improve manual handling conditions

over the next two years.

PRODUCT STEWARDSHIP

Imerys endeavors to identify and manage health,

safety and environmental risks throughout all

stages of a product’s life. Imerys provides its

operations with education and support to:

• Assess impact on our business of the new

European Regulation REACh;

• Provide proper hazard communication for

customers (mainly through our safety data

sheets);

• Comply with regulation and corporate

standards.

page17a23_ANG.indd 21 10/06/08 11:30:26

SAFETY

Safety is a core valueMining and minerals processing are environments requiringa strong safety culture to prevent worker injuries. Imerys operations have always recognized the importance of safety,and have implemented safety programs for many years.

In 2005, the Group decided to supplement the

efforts of local operations by implementing a

series of strategic safety initiatives that are

described below. These initiatives are designed

to provide our operations with the tools and

training they need to achieve continuous and

sustainable improvement in workplace safety.

These initiatives require signifi cant resources,

demonstrating our serious commitment to

employees, their families and the communities

beside our operations. Our approach to safety

has six components: a global training program

with the safety university, a behavior-based

safety program, an accident analysis program,

a set of safety KPI’s (Key Performance Indicators)

tracked throughout the Group, a fatality

prevention program (the “Serious Six Initiative”),

and safety culture improvement events run

at specifi c sites. Since the launch of these

programs in 2005, the Group lost time accident

rate has been halved.

FATALITY PREVENTION PROGRAM

Imerys believes that preventing near misses and

small injuries in the workplace will help reduce

the number of serious injuries and fatalities in

the workplace. This classic theory of workplace

safety is depicted by the following “safety

pyramid.”

Programs such as the Safety University focus

on this approach, and as demonstrated by the

decrease in lost time injuries, the Group has

made excellent progress in improving its overall

safety performance data. We regret, however,

that in 2007, three contractors employees lost

their lives in the course of work for Imerys.

We are deeply saddened by these events and

determined to continue to improve.

To focus specifi cally on potential fatalities and

serious injuries, we launched in January 2007,

the “Serious Six Initiative”. This initiative builds

on the 14 global safety protocols initiated by the

Group(1) in 2006. After benchmarking internally

and externally, we concluded that six of these

protocols cover activities that are associated

with the highest risk of serious injuries and

fatalities in the mining industry:

• electrical safety;

• “Lockout/Tagout”;

• machine guarding;

• working at heights;

• mobile equipment (bulldozers, forklifts, haul

tricks, etc.);

• ground control.

At the beginning of the initiative in January

2007, Imerys’ CEO instructed each operation

to form a team of managers, workers and

contractors to assess their sites against the

requirements of these protocols, and implement

appropriate corrective actions to enable

compliance. In April 2007, each operation

was required to report on the status of their

implementation on a “Serious Six Scorecard”.

This report is now a standard part of the

quarterly operations review conducted by

Imerys’ CEO.

(1) The 14 Global Safety Standards are: Blasting Operations, Confi ned Spaces, Control of Hazardous Energy, Electrical Safety,

Emergency Preparedness and Response, Excavation and Trenching, Fire Safety, Hot Work, Housekeeping, Machine Guarding

and Conveyor Safety, Mobile Equipment, Personal Protective Equipment, Working at Heights, and Ground Control.

SAFETY PYRAMID

NUMBER OF FATALITIES

NUMBER OF SERIOUS INJURIES

NUMBER OF MINOR INJURIES

NUMBER OF NEAR MISSES

NUMBER OF UNSAFE ACTS

P

FAFAFAAAAAAAAAAFAFAAAAAAAAATATATATATALTATATATATATTATATATATATATATATTAA IT

INJNJNJNJNJNJNJNJNJNJJNJNJNJNJNJJNJJJJJURIUUUUUUUUUUUUUUUUUUUU E

ESSSSSSSSSSSSSSSSSS

P

BERERERRERERERERERERERERERERERERERERERRR O OF

MMMMMBERBEBERBERBEBEBEBEBEBEBEBERBEBEBEBERBEBEBEBEBEBEBB O

NNNNNNUNNNNNNNNN

NUMBER OF UNSAFE ACTS

NUMBER OF NEAR MISSES

MBER OF MINOR INJURIEESSSSSSSSSSSSSSNNNNNNNNUMNNN

page17a23_ANG.indd 22 10/06/08 11:38:42

22 | 23

BEHAVIOR-BASED SAFETY AND

“SAFESTART©”

It is generally recognized that the majority of

accidents occur as a result of unsafe acts rather

than unsafe conditions. Seeking to change the

safety behaviors of our employees, both on and

off the job, is therefore a key part of improving

safety in our workplaces. In keeping with

Imerys’ decentralized culture, we do not require

operations to adopt any specifi c behavior-based

safety approach. However, to help stimulate

a behavior-based safety culture and provide

support, we have introduced the “Safestart©”

behavior-based safety approach in our operations.

This approach encourages the employees to

identify four “at risk” mental states:

• Rushing;

• Frustration;

• Fatigue;

• Complacency.

These four mental states result in four critical

errors:

• Taking mind off task;

• Taking eyes off task;

• Entering the “line of fi re” of moving objects;

• Loss of traction, balance or grip.

If our employees can identify the “at risk” mental

states, they will help to reduce the critical errors

and associated injuries. Approximately 20 sites

(1,300 employees trained) have launched

Safestart© or an equivalent behaviour-based

program in 2007; in a survey of these operations,

100% of the participants recommended the

approach to the other operations. 30 additional

operations (1,500 employees) are planning

to install Safestart© in 2008 and many other

operations have or are planning to launch other

behavior-based safety programs.

KEY PERFORMANCE INDICATORS

FOR SAFETY

At the Group level, Imerys tracks all lost time

injuries involving employees or contractors’

employees. These data are distributed

each month to all managers globally, and

improvement in the frequency rate is part of the

performance measurement for the operation

managers.

Each of our operations submits its data to Group

monthly through our web-based data

tool (Enablon©). Training and guidance on our sa-

fety reporting policy helps our contributors unders-

tand our expectations and increases consistency

in reporting from across our global operations. A

series of data quality control steps are applied to

the data once entered into our web tool. These

include identifying signifi cant variation in year-over-

year data for which checking and commentary is

required. Prior to publication, the general manager

of each activity is required to verify the accuracy of

the data in his or her activity.

Our safety KPIs are analysed on a monthly basis

and activity managers regularly receive comments

from the CEO and their Business Group leader, on

their safety performance.

SAFETY CULTURE IMPROVEMENT TEAM

In 2006, we formed the Safety Culture

Improvement Team (SCIT) to assist our

operations that had been identifi ed as “most

help needed”. The criteria for identifying the

“most help needed” facilities include the

scope of the mining activities, the number of

contractors and employees, the number of lost

time accidents, previous audit fi ndings, and the

date of acquisition. The SCIT team conducts

on-site events designed to achieve rapid safety

culture improvement. During these events, the

safety culture of the operation is assessed using

six “keys” to safety success:

• Management Leadership;

• Accountability;

• Incident Management;

• Risk Reduction Activities;

• Employee Involvement;

• Training and Communication.

Corrective action plans are developed with the site

based on this assessment. Progress against these

action plans is tracked to closure via an internet-

based program.

After the fatalities in our operations in 2006 and

early 2007, senior management directed the

SCIT team to expand and accelerate its activities.

This resulted in the addition of members from

operations in France, the US, the UK, and China,

with a further 12 “most help needed” events

being conducted in 2007. In addition, after

recognizing that serious injuries were occurring at

newly-acquired businesses, senior management

also instructed the SCIT team to systematically

and rapidly conduct safety orientations at all

newly-acquired operations.

The substantial decrease in the employee frequency rate is a result of the proactive safety programs described in this section.

(1) Frequency rate: (number of lost-time accidents x 1,000,000)/ number of work hours.

EMPLOYEE FREQUENCY RATE(1) CONTRACTORFREQUENCY RATE(1)

2007 2006 2005

7.98

2007

5.76

7.96

11.79

page17a23_ANG.indd 23 10/06/08 11:50:50

SAFETY

IMERYS SAFETY UNIVERSITYIMERYS SAFETETY UNIVERSITY

EMPLOYEE SEVERITY RATE(1)

0.33

2007 2006 2005

0.24

0.18CONTRACTOR

SEVERITY RATE(1)

2007

0.14

The substantial decrease in the employee severity rate is a result of the proactive safety programs described in this section.

(1) Severity rate: (number of lost days x 1,000) / number of work hours.

In total, 16 orientation events were conducted in

2007. 25 SCIT events are planned for 2008, and

an Asia-Pacifi c team will be formed to meet the

growing demand for safety support in the region.

ACCIDENT INVESTIGATIONS

AND THE SAFETY ALERT PROCESS

Maintaining zero incidents is our ultimate goal,

but when an incident does occur, we recognize

it as an opportunity to learn as an organization.

Each of our operations is required to establish a

formal system for investigating and reporting all

EHS accidents involving employees, temporary,

interim or agency workers, contractors and

members of the public. Responsibility for

managing our incident response rests with the

supervisor for the operation where the incident

occurred, with specifi c actions being:

• Ensuring that the injured person receives

medical care;

• Securing the incident scene to prevent further

harm and preserve evidence;

• Conducting a thorough investigation of the

incident to determine the root cause;

• Developing and implementing appropriate

corrective action;

• Communicating the successful implementation

of corrective action to local management and

employees.

If the accident is serious and has the potential

to occur at multiple operations, the operation

is requested to complete a Safety Alert. This

describes the root causes, countermeasures

and lessons learned from the incident. After the

operation has completed the Safety Alert, it is

circulated via email throughout the Group and

published on the EHS intranet.

We believe that a cornerstone of our safety improvement efforts is theImerys Safety University (the “ISU”). The ISU was fi rst launched in September 2005 in South Africa, and since that time, 17 sessions have been held in 12 countries and 5 languages. The ISU is a two and a half day program designed to improve safety lea-dership skills among site managers. Itincludes numerous interactive exercises including risk assessment, employee coaching, behavior-based safety and root cause analysis. Several role playing exercises are also conducted such as a simulated accident and incident res-ponse. Before departure on the last day, all participants are required to create action plans for their mine or factory based on the techniques learned during the course.

In 2007, the Imerys Safety University “II” was inaugurated to cascade safety lea-dership concepts down to supervisors. Over 400 managers and supervisors are now “graduates” of ISU I and II.

“ In 2008, seven

sessions are planned

with a goal of graduating

210 safety champions.

17 ISU were carried out

in 5 different languages

(including Mandarin

Chinese)”

Point of view

Michael Campbell, Global Manager of Safety Improvement


24 | 25ENVIRONMENT

Environment: an integral part of our cultureAs a signifi cant manufacturing business with global operations, Imerys has a responsibility to the environment. How do we manage our key impacts? What are we doing to reduce our greenhouse gas emissions? As with our health and safety programs, managing our activities environmental impact has always been part of our operating culture.

At Group level, we are now focused on achieving

further improvements in our environmental

performance through creating a Group-wide

systematic approach that builds on existing

practices and activities.

In the following pages, we outline this systematic

approach to managing our key environmental

impacts including water use, waste, dust

emissions and energy use. Our strategy to

reduce our greenhouse gas emissions is a

core element of our environmental program; a

strategy which is primarily focused on improving

the energy effi ciency of our operations.

ENVIRONMENT ACTION PLAN

In November 2007, we launched our new

Environmental Improvement Initiative. It is

designed in many ways to mirror the safety

initiatives of recent years. There are fi ve aspects

to the initiative:

• Implementation of a new Key Performance

Indicator for “environmental incidents”. 2008

will be our fi rst year of collecting and collating

this data systematically across all of our

operations. This new indicator will include any

releases of dust or discolored water that have

the potential to create a public nuisance and

any credible complaints from third parties;

• Launch of a regional environmental training

program similar to the Imerys Safety

University. In 2008, four sessions are planned

for Europe, South & North Americas and Asia;

• A focus on the fi ve highest priority global

Imerys environmental protocols: air emissions,

hazardous material storage, wastewater

and stormwater, post-mining restoration

and minerals solids storage facilities. From

April 2008, performance against these fi ve

indicators will be examined by Imerys’ CEO at

each quarterly operations review;

• Evolution of our existing EHS audit plan to be

more risk-based;

• Provision of on-site support to critical and

new operations through a newly-formed

environmental performance improvement

team.

We are confi dent that this new initiative will

enable us to continue to meet our stakeholders’

expectations, prevent adverse effect on our

operations and better protect our license to operate.

UNDERSTANDING AND MANAGING

WATER USE

To access minerals below the water table, Imerys

pumps large quantities of water from

the ground to surface impoundments. In the

KT Clays (Langley, South Carolina, United States)

Many Imerys operations transfer water from one location to another location without ever using the water in its products or processes. Water transferred in this manner is not quantifi ed by Imerys.

2007 In thousand of liters

Water obtained from water suppliers 7,007,108

Water withdrawn from groundwater 38,916,517

Water withdrawn from surface water 20,888,533

Water obtained from other sources 4,823,825

WATER USE

surface impoundments, the water either

re-infi ltrates into the ground or commingles with

surface water. Some water is also used in mineral

separation and miscellaneous cleaning operations.

In addition, some water is incorporated into fi nal

products such as kaolin slurry. Many Imerys

operations perform dry minerals processing only.

These use only small quantities of water.

In 2007, we began collecting data on water use,

which is presented below.


REDUCING POLLUTION FROM OUR

WASTEWATERS

Some Imerys operations discharge wastewater

such as sanitary wastewater, surface mine

drainage, compressor/boiler blowdown, process

wastewater and non-contact cooling water.

Discharges are required to be monitored

to ensure that they meet the applicable

standards and requirements of the governing

agencies. Where there are no permit or license

requirements, Imerys requires the operations

to maintain wastewater discharges so as not

to cause signifi cant degradation of the local

water quality.

In its kaolin operations, Imerys transports

large quantities of kaolin slurry in pipelines

and stores large quantities of kaolin slurry in

impoundments. Releases from these pipelines

and impoundments are very rare.

In June 2007, there was an accidental release

of process water containing approximately 5%

kaolin from its processing plant, Imerys Rio

Capim Caulim, in Brazil. There was a visibly

white impact to the local waterways, but water

quality quickly returned to its natural state.

Imerys immediately advised the local authorities

of the incident, paid a fi ne of 0.4 MR$ and

cooperated fully with their response.

LIFE-CYCLE ANALYSIS

In our 2nd Sustainable Development Report, we described the completion of a Life-Cycle Assessment (LCA) on one of our paper pigment products made of ground calcium carbonate.

Beginning 2007, Imerys has been taking part in a LCA project, initiated by the Euro-pean Industrial Minerals Association (IMA Europe). Our participation followed an invitation from the European Commission to business associations to collaborate in the development of a platform on LCA, including a life-cycle inventory database(1). In line with the objectives of the European Integrated Product Policy and the Euro-pean strategy on the sustainable use of natural resources, the database is intended to provide businesses and EU policy-makers with information that can be used to integrate life cycle thinking into either product development or future policies.

The project’s objective is to develop LCA datasheets on the environmental impacts of 20 mineral products, from the initial mining of the raw materials through to the manufacture of commercial mineral products. The LCA datasheets are developed based on environmental data provided by several European minerals manufacturers. Imerys has provided data for a number of these LCAs (e.g. kaolin products).

The IMA Europe LCA project started in 2007 and the datasheets are due to be published on the European LCA platform by the end of 2008.

(1) http://lca.jrc.ec.europa.eu/lcainfohub/index.vm

ENVIRONMENT

“The world is changing very fast and environmental issues have become a very serious and a critical matter for our business“


26 | 2726 | 27

REDUCING OUR GREENHOUSEGAS EMISSIONS

The key source of greenhouse gases (GHG) from our operations is the use of fuels and electricity. The main use of energy in our operations is to physically transform our raw materials or products (grinding, heating, drying, classifying, refi ning, fusing, sintering, calcining, etc.). In addition, a few sites generate carbon dioxide emissions from their processes. For instance, sites which fi re clay to produce tiles and bricks generate CO2 when the clay contains calcium carbonate.

We also recognize our broader contribution to GHG emissions from within our supply chain including transportation. Examples of initiatives to reduce these GHG emissions are presented in the Supply Chain and Innovation sections.

Since our last report, there have been signifi cant changes to how we manage energy. In May 2007, we appointed a new Group Energy Manager, whose role is focused on co-ordinating energy management at the Group level and making sure that energy effi ciency and carbon reduction action plans are developed and implemented by the operational activities within the Group and that best practice is actively shared across the Group.

For 2008, the action plans and investments that have already been implemented are expected to lead to a further global 4% energy effi ciency improvement. Further actions will be required to enable us to meet our corporate goal of 5%.

Our GHG emission reduction stategy is primarily focused on

improving the energy effi ciency of our operations; although we also investigate opportunities to replace fossil fuels by cleaner alternatives. Actions taken to date include:• Reducing the energy intensity of our processes and equipment

(e.g. dry mining instead of wet mining, pressure fi ltration instead of heat for drying purposes);

• Considering energy effi ciency at the design stage;• Using biogas from municipal or other landfi lls as a partial

substitution for fossil fuels.

Changes recently agreed as a result of our review of our overall energy saving strategy include:• Development of systems to encourage sharing of information

and best practices across the Group operations;• Identifi cation of individuals responsible for energy at each site

and at an activity or business unit level. In December 2007, a conference of all energy managers was conducted for the third year in a row;

• From 2008, each site will develop and implement an Energy Saving Action Plan. Energy audits of major equipment will be conducted;

• Energy performance indicators will be reported every quarter rather than on an annual basis.

“Twenty-two of our sites fall within the European

Union Emissions Trading Scheme. Over the initial

period of the scheme (2005-2007), their emissions

have remained below the allowances”Paul Fanielle, Group Energy Manager

Point of view

2006-2007 ENERGY VARIATION (IN TJ)

859

Actions launched in 2006 and at the beginning of 2007 were aimed at improving energy productivity by 2 to 3%.At constant perimeter, Group’s energy consumption decreased 1.2%, whilst its production volume increased 2.2% in 2007/2006. This gives an energy effi ciency improvement of 3.4%.

2006 2007

39,50038,620

1,338

(1,318)

productivy/mixperimeter volume


ENVIRONMENT

MANAGING OUR MINERAL WASTES:

RECYCLING BY-PRODUCTS

Our operations generate minimal quantities

of industrial waste, because Imerys uses

non-chemical processes such as magnetic

separation to refi ne its products. In 2007,

Imerys began collecting data on waste

generation and recycling, and this data is

presented above.

Many of our operations separate minerals that are

valuable to our customers from minerals that have

no current market value. The minerals that currently

have no perceived market value are typically stored

on or near our sites as they may have important

potential uses. In many cases, these materials

can be used in post mining restoration, thereby

minimizing the use of virgin resources in our

REDUCING OUR LONG TERM

ENVIRONMENTAL IMPACT THROUGH SITE

RESTORATION

Almost all Imerys mines are surface quarries. In

order to extract its mineral resource from these

surface quarries, Imerys must remove the top

layer of earth, at least temporarily. Typically, the

top layer is later restored to backfi ll the mined

area. To manage the environmental impacts of

this activity, Imerys requires its operations to

maintain a mining rehabilitation plan. The mining

rehabilitation plan describes actions to be taken

to minimize the potential impacts of the Imerys

operations on the environmental conditions. The

mining rehabilitation plan also describes the

rehabilitation methodologies to be implemented

during the operational phase as well as at

the time of closure. To support the mining

rehabilitation plan, Imerys requires its operations

to conduct an environmental impact assessment

consisting of three important elements: a

baseline assessment of existing environmental

conditions, a description of the potential

impacts of Imerys operations on such existing

environmental conditions, and recommendations

for minimizing these potential impacts.

2007 In tons

Hazardous industrial waste 1,563

Recycled hazardous industrial waste 128,657

Non-hazardous industrial waste 270,505

Recycled non-hazardous industrial waste 73,613

WASTE GENERATION AND RECYCLING


Our CO2 emissions from energy consumption increased 57 Kt compared with 2006. This rise takes into account:• Consolidation of the acquisitions made during the period, refl ected in a 159 Kt increase in total CO2 emissions (+19 Kt from conversion processes, +140 Kt from energy consumption);• Higher production volumes to meet market demand, leading to a +64 Kt increase on emissions;• The positive effect of our efforts to improve energy effi ciency and use clean fuels, as well as the evolution of our product mix. These actions enabled us to cut emissions by 147 Kt, i.e. a 5.1% reduction in total emissions from energy consumption.

restoration. Also, technological innovation or new

market opportunities may enable us to identify a

commercial use for the material. Such minerals are

not quantifi ed as “waste” by Imerys.

SEEKING TO REDUCE DUST EMISSIONS

Where we handle and process minerals in dry

climates, our operations can release dust. We

require our operations to identify and characterize

all dust emission sources to manage relevant risks

and monitor compliance with local regulations.

We require dust emissions to be controlled to

minimize adverse off-site impact under normal

operating conditions. Control measures may

include road watering, sprinkler systems, and

plant of vegetation. Utilization of used oil as a

dust suppressant is specifi cally prohibited.

VARIATION IN CO2 EMISSIONS FROM ENERGY USE

2006 2007

2,9662,909

14064

(147)

CO2 mitigationperimeter volume


28 | 29

The slight increases in carbon emission and energy use refl ect an increase in the volume of the Group’s business both from internal and external growth. When adjustment is made to account for this growth, the Group shows an improvement in both carbon and energy effi ciency (see box page 27).

RESTORATION IN FRANCE AND THE UNITED STATES

Two recent restoration projects have been particularly successful in restoring mined areas.

In 2007, Imerys Ceramics France (ICF) began implementing an ambitious remediation project at its Quartz & Sables du Lot quarry. ICF re-contoured and re-vegetated three hectares to create four separate wildlife habitats on the former mine: wetlands, prairie, forest and arid lands. In conjunction with its partners, the French forestry agency (ONF) and the local and regional industrial and environmental authorities (DIREN), ICF will monitor biodiversity at the former mine over fi ve years to assess progress in rege-nerating biodiversity.

In 2006, Pigments for Paper North America activity received the President’s Award from the Georgia Mining Association for its reclamation of the Congo Boone Mine in Hancock County Georgia. This 104 acre area was mined for kaolin from 1987 to 2002. After closure, Imerys re-contoured and re-vegetated the surface with native grasses, wildfl owers and pine trees. Imerys also created four ponds and stocked the ponds with fi sh. The President’s Award recognizes the Group’s commitment toenvironmental stewardship in the areas of erosion control, stocking of plants and trees, drainage, appearance from nearest neighbor and overall wildlife benefi ts.

“These projects clearly

demonstrate the Group’s fi rm

commitment to responsible mining

rehabilitation”Pierre Daniellou, Vice-PresidentGeneral Manager, Minerals for Ceramics, jury member for Imerys’ third Sustainable Develop-ment Challenge

Point of view

Quartz & Sables du Lot (France)

ENERGY USE

38,62039,500

2007 2006

In thousand of GJ

1,398 Biomass

(wood powder)

17,964Natural gas

9,028Other conventional

fossil fuel

11,110Electricity

ENERGY CONSUMPTIONIn thousand of GJ


ENVIRONMENT

MANAGING OUR ENVIRONMENTAL

IMPACTS THROUGH EFFECTIVE

MANAGEMENT SYSTEMS

The Imerys EHS charter endorsed by Imerys’

CEO clearly states our commitment to

management systems (see page 18).

Our focus is on each operation having an

effective environmental management system.

We have developed a self-assessment process

that covers the following eight key elements of

an effective management system:

• Presence of an environmental policy;

• Understanding of environmental aspects and

impacts;

• Understanding of legislative and regulatory

requirements;

• System for driving and tracking environmental

improvements;

• Clearly defi ned roles and responsibilities;

• Competency and training;

• Emergency planning;

• Auditing and review.

In addition to self-assessment against these

eight criteria, certifi cation to ISO 14001 or EMAS

is encouraged and considered as a best-

in-class distinction at Imerys. However, at the

Group level, our focus is on developing effective

management systems, rather than obtaining

these certifi cates.

NUMBER OF ISO 14001 OREMAS CERTIFIED IMERYS SITES

65

84

2007 2006

These data characterize the Imerys operations in terms of both ISO 14001 and EMAS certifi cations.

REVIEWING AND IMPROVING

OUR PERFORMANCE REPORTING

As part of its strategic plan, the Sustainable

Development Working Group formed an

Environmental Core Team to take a critical look

at the existing environmental reporting indicators

and methods, with a view towards expanding

the scope and accuracy of our performance

reporting in the future.

The team was led by the Minerals for Ceramics

EHS Manager for Asia and the Americas and the

Environmental Manager for the Imerys Minerals

Limited operations in the UK. Under these two

managers, the team pursued a two-pronged

action plan. First, the team benchmarked Imerys

SD reporting against reporting by companies in

our peer industries. Second, the team analyzed

the consistency of Imerys reporting with the

Global Reporting Initiative (GRI)(1). The team

assessed these two sets of guidelines using two

scoring criteria: importance to Imerys, and “do-

ability” (i.e., diffi culty of implementation given

time and resource limitations). As a result of

their assessment, Imerys has added water and

waste metrics to further align with the GRI’s

“EN 8” and “EN 22” standards.

(1) See defi nition page 12.



30 | 31

BIOGAS, A PROFITABLE INDUSTRIAL FUELIn France and the United States, Imerys is successfully testing the use of biogas(1) in manufacturing. These three initiatives help to reduce the Group’s environmental impact and cut its fuel bills.

Mably - France

In 2006, the town of Mably was looking for long-term chan-nels to manage the biogas given off by the municipal landfi ll. Specifi cally, the town was hoping to fi nd a partner which would use the gas for industrial fuel. The local Clay Roof Tiles and Bricks facility expressed interest in the project. Once the administrative permit was obtained, Imerys engineers, in partnership with CERIC (a French kiln manufacturer), developed a mixed burner that can supply either natural gas or landfi ll gas. This mixed burner gives the operation the fl exibility to switch to natural gas if there is any interruption in the production of biogas.

Specifi c kiln equipment for biogas was installed in March 2007, and the facility became fully operational in May of the same year. Current consumption corresponds to 90% of the needs of the biogas furnace. Annually, a total of 5,000 tons in CO2 emissions are avoided. Hoping to build on this success, the operation is now exploring further potential uses for biogas in its furnaces.

Clérac - France

Under a partnership with SITA Sud-Ouest, AGS (Minerals for Refractories activity) invested €700,000 in a process to reuse biogas at its facility in Clérac (Charentes, France). The facility was inaugurated on April 13, 2007, and approximately 30% of the energy needs for its chamottes production furnace are now met using biogas. Annually, a total of 6,500 tons in CO2 emissions are avoided.

“Using biogas is a promising ecological alternative.

The projects by KT Clay at Langley, Imerys TC and

AGS in France prove this”Grant Rennison, industrial manager, Monolithic Refractories activity, jury member for Imerys’ third Sustainable Development Challenge

Point of view

Langley, SC - USA

In October 2005, Aiken County (South Carolina, USA) approa-ched Kentucky-Tennessee Clays (KT Clays) with a proposal to sell the operation biogas in return for investment in the necessary extraction and delivery systems. KT Clays and Aiken County agreed to conduct a feasibility study. The County drilled exploratory wells and analyzed the quantity and quality of the biogas. Meanwhile, KT Clays analyzed the operational and fi nancial issues associated with the project. The results of these feasibility studies were positive, and KT Clays signed a contract with the County for the exclusive use of the gas. Installation was completed in late 2006 and early 2007, and since late summer 2007, fi ve of the plant’s furnaces have been running on biogas. In addition to reducing CO2 emissions and reducing operating costs, the project also reduces unpleasant smells from landfi lls and improves safety by avoiding the risk of gas leaks.(1) Gas resulting from the maceration and decomposition of fi nal waste buried in a landfi ll.

Mably (France)


INNOVATION

Our objective for 2007 was to implement at

least one process and one product that have

environmental benefi ts. We have exceeded

this objective, as shown by the number of

new processes and products presented in this

section.

A NEW INNOVATION DEPARTMENT

Our organization is based on decentralized

operating activities focusing on various markets.

In the past, the Imerys’ operating activities

have shown great talent in developing specifi c

innovations within their areas of business and

expertise.

We think that there is a signifi cant additional

potential at the interface between our business

units. The mission of the newly-created central

Innovation Department is to identify those

opportunities and turn them into new business

for the Group. As an initial step, we mapped

the technical competences of Imerys against

the markets in which we operate. As a result of

this mapping process we identifi ed 400 project

ideas. The feasibility and attractiveness of these

ideas were further analyzed, and 17 project

ideas were fi nally selected for development.

Projects focused on these 17 ideas are now

being conducted within our research and

technology laboratories with the help of central

project managers. We believe this will help us to

get the full potential out of the 270 researchers

and technicians which we employ in our 7 main

Research and Technology (R&T) centres and

18 market-focused support laboratories.

The Group’s R&T expenses in 2007 represented

1% of sales of Imerys and this percentage is

expected to be similar for 2008.

DEVELOPING INNOVATIVE PROCESSES

Several innovative processes with environmental

benefi ts have been introduced in 2007. Many

of these focus on energy savings and reduction

in greenhouse gas emissions, as we recognize

that they are a key issue for our operations.

Examples of such innovative processes include:

• Energy effi cient kaolin dewatering and drying

processes implemented in the UK and in

Brazil, which have the potential for signifi cant

energy savings. It is estimated that, as a result

the production platform in Brazil, we will use

an average 10% less energy per dry ton of

kaolin;

• Replacement of wet mining techniques by dry

mining techniques in china clay quarries in

Cornwall;

• Use of alternative energy sources.

Reducing our environmental footprintWe continually seek to develop innovative solutions that reduce the environmental footprint of our products throughout their life cycle.

Ground calcium carbonate (GCC) (Qingyang, Anhui, China)

WET TO DRY MINING IN CORNWALL

In the western area of Cornwall, the “wet mining” processes traditionally used to extract china clay have been partly repla-ced by “dry mining” processes, resulting in signifi cant energy savings.

In the “wet mining” process, a high pressure water jet is directed at the quarry face to dislodge the china clay and other minerals. This forms a clay slurry which after a fi rst treatment process, is pumped to the top of the quarry and transported via a pipeline to a refi nery plant. In the “wet mining process” pumping a highly diluted kaolin slurry from the bottom to the top of the pit is a very energy-intensive activity.

In the “dry mining” process, the whole kao-lin matrix is mined by traditional mining methods in the quarry, then hauled by trucks to the slurry plant, therefore avoiding the energy intensive water recirculation within the pit. The overall energy savings achieved by the move to “dry mining“ are expected to reduce the energy required for the pro-duction of ceramics kaolin by 60% per ton of clay produced.


32 | 3332 | 33

DEVELOPING INNOVATIVE PRODUCTS

Through the development of innovative solutions,

we endeavor to reduce the environmental

impact of our customers, and improve the safety

of our products. To maximize the potential for

innovation, it is important that we consider the

whole life cycle of the products which often

results in improving the sustainability of our

customers’ activities as well as our own. Among

the numerous new products we have launched

in 2007, many of them have environmental

and/or Health & Safety benefi ts. Selected

examples are shown in the table page 34.

A GREENER RAMP-UPAT IMERYS RIO CAPIM CAULIM (IRCC) PLANT IN BRAZIL IRCC’s successful expansion shows how economic development and energy conservation can be reconciled. The new platform should consume 10% less energy per ton of kaolin produced than the former one.

Two main breakthroughs are behind this achievement. The fi rst is the development of pressure fi lter technology for dewa-tering pigment slurry. Once impurities have been removed and the required particle size has been obtained by wet processing, the water content of the slurry must be decreased. The previous way of achieving this was by evapora-tion, an energy-intensive technique. By applying pressure fi ltration technology,

the water is mechanically squeezed out, which is less energy-intensive.

The second major innovation is a new granulated product form. This process allows IRCC to make a dust-free pro-duct, which is easier to handle at our customer’s premises, and also uses less energy when produced by our custo-mers. IRCC’s entire fi ne coating product range will soon be available in granulate form.

Together with the high-pressure fi ltration process developed for coarse pigments in 2005, these innovations will substanti-ally reduce IRCC’s impact per ton of clay produced on the environment.

“Our customers’ response has been positive, especially as granu-

late also solves dust problems during handling. Full-scale marketing

is in progress. Tests also show that some customers can save up to

75% of their energy in the pigment make-down process”

Point of view

Bob Pruett, Kaolin Product Manager for Global Pigments


PRODUCTS WHAT IS IT? ENVIRONMENTAL BENEFITS

Alodur 96 Sintered rods for the manufacture of heavy-duty abrasive wheels (used for metal abrasion).

Less abrasive product is needed and less energy is used to remove a given quantity of metal.

TIMREX® T-SLC30and TIMREX® SLG3

New graphite products used as key components in lithium-ion batteries with improved energy density. Lithium-ion batteries are commonly used in consumer electronics like mobile phones, personal computers, and digital cameras. Both TIMREX® T-SLC30 and TIMREX® SLG3 allow higher charge capacity at higher current rates, thus allowing more rapid charging of the battery.

TIMREX® T-SLC30 and TIMREX® SLG3 allow more effi cient use of lithium-ion batteries and contribute to longer battery calendar life.

KKW SAC Corumdum-coated hollow fused alumina, allowing the manufacture of lighter, more heat resistant grinding wheels used for metal abrasion.

Energy savings during the grinding process due to lighter grinding wheels and reduced heat losses.

Astra Fil K New kaolin fi ller used for fi ber replacement in paper manufacturing processes in Canada. It enables Quebec paper-makers to comply with the Quebec Forest Act. For more information on the act see their website(1).

Reduction in the quantity of cellulose fi ber required for paper-making, therefore permitting Sustainable Development of forest resources in Quebec and other wood fi ber-limited regions.

Carbonate fi llerfor non woven fabrics

Carbonate fi ller can replace expensive petro-leum-based resin in the manufacture of products such as ground covers, cleaning wipes and fi lters.

Resource savings: removes the need to use petroleum-based resin, which is produced from oil-based products.

Helia Cal 3000,LumiCarb 395

Dry-ground calcium carbonate used as additives in paints and plastics, with similar brightness proper-ties to wet ground products.

Energy savings during the manufacturing process of these two dry products (compared with wet).

Kercast GU 2303and 2308

Refractory castables with longer life at high temperature and better resistance, used for the manufacture of cast iron.

Resource savings associated with the longer life-time of these castables, which are more resistant to heat and corrosion.

Kermag dry 6001 & 8010 Mineral heat setting dry vibratable mix for steel application in tundish.

It permits quick and easy installation, improving the turn-out time of customer’s equipment.

New generationof Monomur bricks

Monomur is a high-inertia clay brick, also contri-buting to indoor air quality by preventing damp and mould.

The new generation of Monomur bricks meet the latest French thermal house insulation regulations (RT2005).

Increased energy savings during house lifetime, due to high thermal insulation performances and natural air-conditioning properties.

New generationof photovoltaic roof tiles

The new tiles are compatible with plain tiles or small format interlocking tiles. In particular, they can be integrated into old roofi ngs without compro-mising aesthetics.

Promotes the use of renewable energy in various buildings.

(1) http://www.commission-foret.qc.ca/rapportfi nal/Report_Summary.pdf

INNOVATION


We continually improve our community relations

by investing in the people that work with us,

supporting sustainable projects, building a

sustainable infrastructure and generating

economic growth through our operations. 30%

of the projects participating in the SD challenge

since its inception in 2005 have been community-

based. We encourage proactive engagement

with community stakeholders and require all

credible complaints to be taken seriously. Where

appropriate, our sites have a community liaison

offi cer, who organizes a focused communication

program to hear the views and concerns of the

communities in which we operate.

DIVERSE COMMUNITIES REQUIRE UNIQUE

APPROACHES

The communities in which we operate are

extremely diverse. We do not, therefore, require

our operations to implement a standardized

fl agship program. Rather, we feel that the

Group’s decentralized management principles

Adapting relations tothe local contextOur community relations goal is to continually increase the positive impacts of our operations, while reducing any negative impacts.

are particularly applicable to community

relations. This decentralized approach enables

each operation to adapt to the stakeholder

values, constraints and opportunities of its

community. We recognize that to maintain our

“license to operate” we need to respect those

values, abide by the constraints, respect the

rights of local residents and seek to derive

mutual benefi ts from the opportunities that exist.

LOCAL EMPOWERMENT AND ACCOUNTABILITY

Local Imerys managers are in close contact

with the communities in which they work, and

therefore are in the best position to address

local issues and build partnerships with local

organizations. Under a new community relations

protocol adopted in 2007, Imerys formally

delegates responsibility for community relations to

the most senior employee with responsibility for

day-to-day oversight of each facility.

34 | 35COMMUNITY

BRIDGING THE DIGITAL DIVIDE

As part of a computer literacy drive, a pilot school was opened in October 2006 in Bras, one of the poorest areas of Sao Paolo. The school is managed in partnership by Imerys do Brasil (IDB) and CDI, a not-for-profi t organization that fosters social inclusion through information and communication technology. Initially, 150 people, including 25 homeless individuals, received training in computer skills at the centre. The school is housed in the offi ces of Ocas, a magazine sold by homeless people. “This win-win situation came about almost by chance” , says IDB Senior HR Analyst, Carla Felix. “IDB learned thatVotorantim, its largest paper customer in Brazil, supplies Ocas with paper, so the maga-zine’s offi ce made an ideal location for the learning centre”.

Building on the success of the Bras school, the project is now entering its second phase, and a second school is planned for Pirai, close to our plant. At this school, training will be prioritised for Imerys employees, subcontractors and their families. The school may be based on the IDB site, which is within easy reach of the town, and this will encou-rage employees to support the project, whether by recycling computer hardware or volunteering time.

Three similar centers are planned near other IDB operations. These centers will be loca-ted in poor areas where people are excluded from society due to a lack of basic skills.

In total, approximately 500 people per year will benefi t directly from this project, many of whom will be IDB employees or their families, or external personnel such as cleaners and other contractors.


COMMUNITY

At all mining and production locations, this senior

manager is specifi ed as the plant manager, mine

manager, or equivalent. Under the community

relations protocol, the senior manager is required to

undertake a stakeholder assessment including the

following elements:

• Identifi cation and prioritization of stakeholders

including, but not limited to, nearby property

owners and users, local business owners and

users, and relevant governmental and non-

governmental organizations;

• An action plan including specifi c objectives to

increase positive impacts and reduce negative

impacts on key stakeholders;

• Periodic management review directed towards

achieving continuous improvement.

In the future, these action plans will be audited

as the group’s auditing program evolves to

encompass broader Sustainable Development

issues.

SPECIFIC PROJECTS

As with our environmental, health and safety

programs, proactive community relations

have always been a part of our operational

culture. We celebrate the proactive

community relations projects implemented

by our operations through the SD Challenge.

In total, 22 projects have been recognized in

the context of the SD Challenge. Three 2007

SD Challenge projects are featured in this

report: the “digital divide” project in Brazil,

the water catchment project in Australia

and the Shawa poultry project in Zimbabwe.

Several additional projects were included

in the 2007 SD Challenge including the

following ones:

• Near its operation in rural Brazil, Imerys

Rio Capim Caulim operation is providing

educational support for 248 underprivileged

children at the Pica-Pau Amarelo School;

• In the Republic of South Africa, the Samrec

operation is funding construction of two

classrooms for schoolchildren currently

attending classes in tents;

• In Indonesia, the Imerys TC partnership(1) with

“Les Architectes de l’Urgence” (emergency

architects) shifted up a gear in 2007. The

association often struggles to fi nd qualifi ed

and motivated personnel who would like

to pass on their knowledge. So, Imerys TC

pledged to select and bear the cost of a relief

mission for 5 young bricklayers.

“LIFE OF MINE”

A key issue for the mining industry as a whole

is local impact of decommissioning mine sites

at the end of the “life of mine”. Our mines

typically have long lives, and mine closures are,

therefore, infrequent. However, we recognize

the importance of this issue as well as the

impact of re-engineering or downsizing our

processing facilities. In these cases, we strive

to provide re-education, re-location and

re-employment where possible, and we also

aim to restore our sites to provide local amenity

and biodiversity value.

(1) Imerys TC helped to re-build Sigli village after the tsunami

of 2004 (see detailed information on www.imerys.

com in Sustainable Development section, Community

Relationships).

“30% of the projectsparticipating in the Imerys SD challenge have beencommunity-based”

Home built within the Imerys TC partnership with “Les Architectes de l’Urgence” (Indonesia)


36 | 3736 | 37

Point of view

Our Zimbabwe operation, Samrec Vermiculite has undertaken a simple and practical initiative to meet a vital need in its neighboring community: food production. The Group’s Shawa mine is located in the driest region of Zimbabwe, where food is scarce and few families get enough protein in their diet. “In 2006, I realized that our employees’ spou-ses were all unemployed, increasing the burden on the breadwinners”, says Managing Director Kennedy Magomo, who was then Mine Manager. “We discussed the idea, with the Workers Committee, of setting up a small poultry farm to be run by local women, together with a grinding mill.” The grinding mill removed the need for villagers to walk over ten kilometers to the nearest mill and the husks left over from the milling supplement the chicken feed.Samrec Vermiculite contributed the infrastructure and the capital for 200 day-old chicks and stock feed, and mine employees helped to build the fowl run. The poultry farm is now a cooperative with a constitution and its own trust bank account. It is run by 15 women, many of whom are married to mine employees. Output is now 400 chickens every eight weeks and capacity has been extended to make room for 1,500. Magomo says, “The project has signifi cantly improved diet and health, as well as helping to relieve poverty in the community”.But that’s not the end of the story. Samrec Vermiculite continues to look ahead. When the mine closes, the pit will be converted into a water reservoir. With funding, this could form the core of an irrigation system, allowing maize to be grown and further helping the community to feed itself.

POULTRY IN ZIMBABWE

We operate three quarries and a processing plant in inland Victoria, one of the worst drought affected areas in Australia. A former quarry at one of these sites contains approximately 300 to 400 ML(1) of water collected from around the operating site. Site management recognized that this water could be provided to the local community but the site’s permit stipulated that the water must be contained within the site boundary. At the time, the water level was being maintained by using the water to irrigate the surrounding pasture.The fi rst step to realizing this opportunity was to test the site’s water quality to see if it was acceptable for discharge into the reservoir. Following successful testing, site management approached local regulators and stakeholders with their proposal.In February 2007, the local newspaper named the region’s biggest water users, including the Imerys sites. In this same article they commended the Imerys operations for their responsible water management, as “while seeking to cut water consumption in its ope-ration, Imerys Minerals Australia has offered more than 300 mega liters of potable water from one of its mining sites to Central Highlands Water — enough to satisfy Ballarat’s residential water needs for more than a week”. The Environmental Protection Agency issued a revised license in May, permitting the project to proceed.To date, 240 ML of water has been discharged to the local reservoir through infrastructure provided by Imerys. The Local Water authority and the Environmental Protection Agency are regularly monitoring the water quality to ensure it is suitable.(1) Mega liter.

“ Imerys has provided all

infrastructures including pumps

and pipeline, using stock on site”Collin Bullen, Pigments for Paper Australia Manager

“The economic situation in

Zimbabwe is disastrous. This

initiative helps the community

to meet its vital needs”Dave Barnes,

Operational Excellenceand European

Carbonates ProjectsManager, jury member

for Imerys’ thirdSustainable

DevelopmentChallenge

Point of view

WATER CATCHMENT IN AUSTRALIAMeeting operational, environmental and stakeholder needs


Autonomous teamswith management principles in commonImerys’ ongoing success is founded above all on its people’s ability. The Group’s decentralized organization empowers its employees with great leeway to make decisions at every level.

The mission of Human Resources (HR) is

to ensure that the Group has the skills and

people necessary to support its growth.

HR teams particularly work on the smooth

integration of newly-acquired companies and

the implementation of common management

principles. In 2007, no fewer than 1,776 new

employees joined our company.

Imerys’ HR policy is structured around three

underlying principles:

• Give employees decent, safe working

conditions, guaranteed minimum standard of

benefi ts and offer them career development

possibilities;

• Give managers clear management guidelines

that are strictly in line with Imerys’ ethics, in

terms of dialog and respect for others;

• Encourage harmonious integration of our

activities into their immediate environment,

particularly through units’ active participation

in local communities.

Minerals for Ceramics, Refractories, Abrasives & Foundry is the business group with the biggest change in employee numbers. This is the result of reorganization but also of the intensive external growth activity in 2007. The volume of jobs in Performance Minerals & Pigments for Paper in Europe decreased due to industrial reorganization carried out in Great Britain.

EMPLOYEES BY BUSINESS GROUP(1) (TOTAL: 17,552)

3,408 Performance Minerals

& Filtration

4,718Materials & Monolithics

6,421Minerals for Ceramics,

Refractories, Abrasives

& Foundry

222Holding companies

2,783Pigments for Paper

Husum plant (Sweden)

(1) As of December 31, 2007, the Group’s employees breakdown was as follows: Performance Minerals & Pigments: 4,215; Materials & Monolithics: 4,715; Ceramics, Refractories, Abrasives & Filtration: 8,400; Holdings: 222.

HUMAN RESOURCES


ENCOURAGE ACTION

The Group fosters action and initiative. Managers

have all the autonomy needed to carry out their

mission. Their empowerment is a key factor

in Imerys’ competitiveness. They are able to

respond swiftly and relevantly to their local

situations, while acting with a long-term outlook.

The Group lets them take risks and try out new

methods. Every individual is accountable for

his or her choices and actions. Mutual respect,

fairness and frankness are shown throughout

the chain of command. Integrity, honesty and

responsibility are our three guiding values.

We are aware that many exciting development

projects often entail areas of risk and

uncertainty. At Imerys, we dare to take on these

challenges, but insist that our employees to

behave at all times with high standards in terms

38 | 39

The Group’s workforce grew approximately 11% in 2007. Imerys’ development strategy in high-growth zones was implemented in 2007 through several acquisitions, particularly in Asia (e.g. ACE, India, 550 employees) but also South America (Perfi ltra, Argentina, 80 employees) and Central and Eastern Europe.The net balance of jobs resulting from acquisitions offsets the workforce reductions relating to a few divestments (Ceradel Socor ceramics distribution activities in France, roof tile and brick manufacturing in Spain and Portugal). The effects of the industrial reorganization in Cornwall (Great Britain) were also more signifi cant this year.The Group’s average headcount for 2007 is 16,534 employees, of which 15,394 employees on open-ended contracts and 1,139 on fi xed-term contracts.Fixed-term contracts are predominantly used in China (for 40% of employees). Temporary and/or subcontracted personnel are also used inChina, but also in the United States, South Africa (350 people), France (490) and Brazil.

of performance and business ethics. Compliance

with current legislation is a worldwide

prerequisite.

DEMAND RESPONSIBLE BEHAVIOR

Imerys’ legal department, in close cooperation

with the Human Resources department and the

Internal Control team, drew up the Imerys Code

of Business Conduct and Ethics. This document

outlines the general principles that the Group

wants its employees, subcontractors and other

close partners to follow. It is designed to ensure

that everyone in his or her daily work behaves in

accordance with local legislation and complies

with the principles of responsibility, integrity,

fairness and openness. The text is translated

into 10 languages and available on the policies

and Group’s procedures intranet (“Blue Book”).

All employees are encouraged to inform their

management or local representatives of the

legal, internal audit or HR departments whenever

they become aware of a violation of the code. In

case of doubt, they are urged to ask for advice

for the best response in any situation where

there is a violation risk.

The Imerys Code of Business Conduct and

Ethics is also available on the corporate website

www.imerys.com and consequently accessible

to third parties.

RESPECT FOR HUMAN RIGHTS

Part of the Imerys Code of Business Conduct

and Ethics deals with respect for human rights.

Imerys defends human rights as described in the

Universal Declaration of Human Rights and the

Group respects those rights in the management

of all its operations worldwide. Wherever we are

based, we strive to ensure that Imerys’ presence

fi ts harmoniously into the local environment and

that it is not a source of confl ict. Imerys respects

EMPLOYEE HEADCOUNT

15,77615,934

17,552

2007 2006 2005

EMPLOYEES BY GEOGRAPHIC ZONE

h 2007 2006 2005

Western Europe 7,266 8,980 9,033

- of which France 3,486 3,666 3,433

- of which Great Britain 1,615 1,953 2,194

Central Europe 1,895 - -

North America (inc. Mexico) 3,174 3,042 3,192

- of which United States 2,794 2,661 2,822

South America 1,315 1,223 1,316

- of which Brazil 867 895 979

Asia-Pacifi c 3,069 1,834 1,648

- of which China 1,672 1,088 974

- of which India 652 - -

Africa 833 697 745

Total 17,552 15,776 15,934

EMPLOYEES BY FUNCTION

2007 2006

Operations – Production

Manufacturing12,906 73.53% 11,571 73.35%

Logistics – Supply Chain – Purchasing 645 3.67% 522 3.31%

Research & Development – Geology 516 2.94% 503 3.19%

Sales & Marketing 1,223 6.97% 1,175 7.45%

Support & Administration 2,262 12.89% 2,005 12.71%

Total 17,552 100% 15,776 100%

The distribution of the Group’s employees by function is very stable over time and from one business group to another.


and defends the dignity, wellbeing and rights of

the Group’s employees and their families and

communities.The Group ensures that those

principles are followed through audit campaigns

by internal auditors.

DIVERSITY AND EQUALITY

One of Imerys’ strengths is the diversity of a

workforce made up of men and women from

many different nationalities and backgrounds,

working together with common goals. As an

employer, we encourage fair employment

practices worldwide and ensure all employees

have an equal chance in terms of hiring and

career development.

Generally, we employ members of the local

community at our sites. Because of the nature of

our activities, our mining sites and plants have a

higher proportion of male workers. In 2007, the

share of women in the workforce was 14.3%.

Furthermore, as of 2006 the Group reports

on the number of disabled employees. As of

December 31, 2007, the Group employed 246

disabled people(*).

PERCENTAGE OF WOMEN BY GEOGRAPHIC ZONE

2007 2006

All employees Salaried employees All employees Salaried employees

Europe 15.68% 29.73% 14.40% 29.80%

North America 13.48% 32.27% 13.70% 32.40%

South America 10.19% 29.97% 11.30% 29.30%

Asia-Pacifi c 14.83% 25.65% 14.90% 30.90%

Africa 7.08% 11.97% 7.70% 11.30%

Total 14.3% 29.2% 13.8% 29.8%

The proportion of women in the Group’s total workforce increased slightly compared with 2006, particularly in Europe. The proportion of women senior managers (members of support or line management teams) at Imerys was 9.5% in 2007 (vs. 11% in 2006). The percentage of women in the “workers” category is not signifi cant.

DEVELOP SKILLS

Imerys’ steady, signifi cant growth creates a

work environment that offers many development

opportunities. Integrating each new acquisition

involves mobilizing in-house talent. In China,

India or Vietnam, for example, following

the takeover of new businesses, managers

previously based in France, Germany or RSA

were expatriated there for a couple of years.

Straightforward succession planning, effi cient

career management tools – annual performance

appraisals, individualized career development,

etc. – are rolled out Group-wide. They ensure

that skills are monitored and career evolution is

fostered within our activities.

Internal mobility is a reality in our 260 sites

around the world. In 2007, more than 600

permanent positions were fi lled in-house. There

is a broad range of career paths within the

Group.

(*) Number of handicapped-disabled employees (on payroll

and present on site) in accordance with the local/

International Labor Organization defi nition: whether it is a

mental or physical handicap. Employees present on site, i.e.

not on disability leave.

For the fi rst time ever, Imerys reports on the age & seniority distribution (for permanent contracts only) within its regions and businesses; this helps to defi ne adequate Human Resources initiatives. This 1st graph shows that the Group has started to recruit again after a pause ca.10 years ago. Having 50% of its total workforce with less than 10 years of tenure, and approx.15% aged less than 30 years old, Imerys has been designing programs in order to attract, retain and develop these employees. On the other hand, a third of our employees is more than 50 years old which emphasizes the need for pension plans as well as a suitable working environment.

< 3 years 4 - 10 years 11 - 15 years 16 - 20 years > 20 years

4,733

1,620

4,263

2,141

3,588

SENIORITY (permanent employees only)Number of employees: 16,345

< 30 years old 30 - 39years old

40 - 49years old

> 50 years old

4,4604,426

5,376

2,083

AGE (permanent employees only)Number of employees: 16,345

HUMAN RESOURCES


40 | 41

IMERYS COMMITSTO LITERACY CAMPAIGN

Our activities have set up several programs to combat illiteracy in recent years,particularly in Brazil, South Africa and the United Kingdom.

Formed in association with union representatives in 2005, the Imerys Minerals project in Cornwall (UK) has changed the lives of a number of employees. Volunteers are all supported by an individual tutor as they study subjects in 20-hour cycles. By the end of 2007, 31 UK employees had obtained a level 2 qualifi cation and 30 more people were still in training on that date.

Imerys now wants to go further and is launching a Group-wide initiative. 2008 and 2009 will be pilot years, with every activity setting up a literacy initiative on one of its sites. The long-term goal is to make sure that all Group employees can read, write and count in their working language in order to carry out their work assignments and function in everyday life. Practical training ensures that every participant can at least read and understand site signage, safety instructions, local communications, their pay slips, an employment contract or policies and procedures. It is important that employees are also able to fi ll in production sheets, or any document needed, for the site at which they work to run smoothly. Finally, everyone should be profi cient in the four basic arithmetic functions (addition, substraction, multiplication and division).

IMERYS LEARNING CENTER:A PLACE FOR LEARNING AND SHARING348 employees from 19 different nationalities have been through the Imerys learning center since it opened in April 2006. The need to strengthen in-house skills and the desire to foster best practice-sharing were the reasons behind the project. In a decentralized environment, sharing expertise and networking improve knowledge as a whole. The Group Human Resources department has taken a pragmatic approach. It focuses its choices on subjects that can be transposed to all Imerys’ business groups and activities. Training is intended to be crossfunctional and general-purpose. It refl ects line managers’ concerns and conveys key know-how with everyday applications. Courses last a maxi-mum of three days and are given in French and English. Three subjects were on offer to begin with: “Basics of Geology”, “Finance Fundamentals” and “Annual Performance Appraisals”. In 2007, “Project Management” was added. 2008 will see the launch of a wide-reaching “Marketing” program. Imerys works in partnership with specialized training organizations and in-house experts. The aim is to disseminate non-specialist knowledge with an Imerys touch. The “Basics of Geology” module given in Europe, for example, is facilitated by the Imerys Geology team, in association with the Orléans Earth Sciences Institute.

“Our partnership with Imerys

means I can pass on my know-

how to the Group’s employees but

also keep up with

the best possible

technical applica-

tions. As a result

I’m better equip-

ped to discuss

careers in industrial minerals with

my students”Éric Marcoux,Teacher at Orléans Earth Sciences Institute (France)

Point of view

Point of view

“The fi ght

against illiteracy is

a duty in a group

like Imerys. The

efforts made in

the UK as well as

in South Africa or in South America

have set an example to follow”Bernard Vilain,Group Vice-President, Human Resources


Our people can implement their sales skills or

technical expertise and take on functional or

management responsibilities. Bridges between

different paths are always possible.

Our managers’ mission is to train and develop

their teams. They are encouraged to foster the

sharing of knowledge on their sites, put forward

their people for training sessions and develop

their leadership skills.

Almost 220,000 training hours (with specifi c

program and content) were given out during the

year (up 10%). Technical expertise represented

more than 49% of total hours, training to raise

awareness of health & safety procedures and

measures 41% and management training 10%.

FOSTER NETWORKING

The Group’s growth is driven to a large extent by

extensive communication among its employees.

Imerys encourages internal meetings on specifi c

topics and creates opportunities to meet and

share best practices.

Induction programs

Within a few weeks of joining the Group, every

management recruit takes part in a Welcome

Session facilitated by several of the Group’s

executives. The model, fi rst set up in Europe

a few years ago, was deployed in the United

States in 2007 with plans to roll out in Asia in

2008.

The Imerys learning center

Created in April 2006, the center delivers

programs on essential subjects such as geology,

fi nance and management. A marketing module

will be developed in 2008 (cf. box page 41).

Specifi c themes

Safety Universities, regional environmental

training, Operational Excellence training and the

Senior Leadership Program are all opportunities

for dialog and learning.

Cross-group seminars

Functional teams (Research & Technology,

Geology, Finance, Purchasing, HR, etc.) hold

regular international meetings to disseminate

best internal practices. In 2007, the Energy

seminar brought together 24 line managers

from different activities. For the fi rst time, also in

2007, the 10 internal auditors met for three days.

PLAN AHEAD

Groom future managers

Imerys has developed the “Senior Leadership

Program”. The goal of this program is to prepare

the people who have shown high potential for a

future General Manager role in a global activity.

We started the program in 2006, with about

20 attendees. They start with a 360° multirater

tool to gain insight into their leadership styles.

This is followed with a plenary session where

they meet together. During three intense days,

they learn about leadership in the context of

Imerys and in their personal context. In 2008,

we will continue the program with 18 new

participants. The program ends with one-on-

one interviews with specialist advisors to draw

up individual development plans. This program

is in conjunction with the Center for Creative

Leadership, a worldwide leader for over 30 years

in leadership.

Integrate new talent

In fall 2007, Imerys designed an international

initiative to recruit high-potential graduates.

More than 300 management vacancies to be

fi lled in the next three years were identifi ed

in the Group’s various operating activities

and functional departments. Through a global

communication campaign, line HR managers

detect and recruit multifaceted candidates. The

project should help to strengthen the in-house

talent pool, but also to increase our people’s

diversity.

Krugerpost (South Africa)

HUMAN RESOURCES


42 | 43

Restructure when necessary

The need to improve the Group’s effi ciency

and productivity can sometimes lead to internal

restructuring and job cuts. In such situations,

the priority of the Group and its activities is

to fi nd internal placement solutions for the

employees concerned and set up additional

training programs and support measures to help

them fi nd a job or develop their own business

projects. The restructuring plan for our activities

in Cornwall (Great Britain) is nearing completion.

Out of 600 job cuts, 400 people have opted

for voluntary departure. Our local subsidiary

continues to seek placements for employees

who have had to leave despite their desire to

remain in the company.

INFORM AND DIALOG

We aim for positive, constructive dialog with our

employees and their representatives.

Imerys considers that trade union membership

is a fundamental right and strives worldwide

to safeguard employees’ interests. In Europe,

relations with personnel also take place

through the European Works Council. Personnel

representation is organized differently in

the United States where employees are not

represented by labor organizations in the same

way at all locations. As of the end of 2007,

there were 146 company agreements and more

than 50% of the workforce was covered by a

collective agreement and/or union agreement.

Furthermore, the Group annually reports the

number of working hours lost through strikes.

We consider that this is a major indicator of the

company’s industrial relations climate at Imerys.

REWARD PERFORMANCE, GUARANTEE

BENEFITS

Compensation and benefi ts principles favor

competitiveness, consistency between entities

and a focus on performance when relevant.

They are founded on a desire for internal

transparency. The alignment and harmonization

of bonus systems for top managers and

executives, which began in 2005, has now been

completed.

In 2006, the Group carried out another

Employee Shareholding Plan. The fi fth plan

in seven years, which covered 80% of the

workforce, was a success with a 22% take-up

rate. Employees in 21 countries (compared with

To consult job offers and apply on line,go to www.imerys.com

WE ARE LOOKING FOR RARE AND UNIQUE RESOURCES WITH GREAT POTENTIAL FOR DEVELOPMENT,

in every country and for our multiple divisions. If you are an action-oriented, strategic thinker, with a strong spirit

of entrepreneurship, we offer a unique place to work that allows you to thrive. If you believe in the importance of

building teams as well as being a committed team player, then join the 18,000 employees of Imerys, the World

Leader of Industrial Minerals. Our mission is simple: to add value to our customers’ products or processes. Located

in 47 countries, with a 15-year uninterrupted growth in net income, with Imerys, you will transform to perform.

15 in 2003) were able to subscribe to Imerys

shares on preferential terms. Reaching Asia

for the fi rst time, the operation was open to

employees in Thailand, Malaysia and Singapore,

where the Group is developing rapidly. As of

December 31, 2007, around 21% of employees

held Imerys shares.

In 2007, specifi c benefi ts projects in Latin

America and Asia were managed by Corporate

Compensation & Benefi ts in order to rationalize

personal insurance contracts and align benefi ts

on national market practices. This initiative was

deployed fi rst in China, then in Brazil, Argentina,

Mexico and Chile in the second semester (see

box page 44).

All these efforts help Imerys to monitor our

benefi t programs more professionally and to

minimize risks linked with regulatory changes.

This has to be pursued in the coming years and

extended to other geographical areas.

Furthermore, as of January 1, 2008, all Group

employees worldwide are covered during

business travel, especially abroad. This

insurance provides death and disability

coverage, as well as medical, legal or practical

(repatriation) on-site assistance.

The decrease in the number of employee share-holders from 2006 to 2007 is above all due to the divestment of companies in Europe, i.e. Building Materials activities in Spain and Portugal and the companies Ceradel Socor (France) and Potterycrafts (Great Britain) in Minerals for Ceramics.

NUMBER OF WORKING HOURS LOST THROUGH STRIKES

12,065

2007 2006 2005

5,1556,531

NUMBER OF EMPLOYEE SHAREHOLDERS

3,653

2007 2006 2005

4,108

2,273

PERCENTAGE OF SHAREHOLDERSAMONG TOTAL EMPLOYEES

20.81%

2007 2006 2005

26.04%

14.27%


STRENGTHEN THE HR FUNCTION

Bolster HR teams

Human Resources teams were strengthened

in 2006 and 2007. The new “HR Development

and Graduate Program Manager” position was

fi lled by an in-house candidate. Furthermore,

the Group’s Compensation & Benefi ts team

was bolstered by the arrival of an expatriation

specialist. An HR manager enhanced the Group’s

structure in China. Finally, new HR professionals

joined the Performance Minerals Europe,

Minerals for Filtration, Minerals for Abrasives and

Monolithic Refractories teams.

Develop reporting

The monthly HR reporting system has existed

on a global scale since June 2005. It includes

detailed indicators in fi ve languages on the

workforce per country, activity and job category.

Data are collected following the business

organization, at legal entity or site level

whenever relevant. Information traceability is the

responsibility of the 250 contributors/validators,

who must be able to track and justify the

information entered in the system.

New indicators have enhanced reporting, for

example data on vocational training, the age and

seniority brackets. In 2009, Imerys will enrich

the reporting with “absenteeism” as a new

criterion.

HUMAN RESOURCES

In 2006, Imerys Corporate Human Resources initiated a comprehensive review of cur-rent benefi ts programs in Asia-Pacifi c, as well as in Latin America. The purpose of this review was fi rst to become more knowledgeable on what our employees were provided. Secondly, we wanted to make sure the benefi ts plans were competitive in the market. This survey led us to select some countries where benefi ts alignment and harmonization across businesses made sense. China was at the top of the 2007 priority list.

There are several reasons why we started with China. First, because of the growing business Imerys has been running there for a couple of years. On the other hand, China gathered Imerys employees from various entities and business units, whose benefi ts programs were not equivalent. Finally, in some entities, social benefi ts proved virtually non-existent.

The new program is effective January 1, 2008. It covers Life, Accidental Death and Disability for the majority of our employees across different regions. Approx. 20 legal entities (1,300 employees) are joining the program and Imerys’ aim is to enlarge it to all newly-acquired companies in China. The Corporate Compensation and Benefi ts team brought technical expertise and Group economic leverage (instead of having local and divergent negotiations) in order to design consistent benefi ts programs with the country HR Director, at affordable cost for the businesses. With almost 2,400 employees, China is now Imerys’ third-biggest base, behind France and almost on a par with the United States.

A MUTUAL UNIFORM, STANDARD AND COMPETITIVE BENEFIT PROGRAM IN CHINA SINCE JANUARY 2008

“This program ensures that Imerys

provides employees with competitive

benefi ts. I was really enthusiastic

and supportive because it reinforces

employees’ commit-

ment and retention. The

Recruitment market in

China is really tough and

benefi ts are really valued

by the people”Juliette Shi,HR Manager for China

Point of view


44 | 45

This is a free translation into English of the statutory

auditors’ report issued in the French language and

is provided solely for the convenience of English

speaking readers. This report should be read in

conjunction with, and construed in accordance with,

French law and professional auditing standards

applicable in France.

At your request and in our capacity as the

Company’s statutory auditors, we have carried

out the procedures described below regarding

the reporting process for environmental, safety

and human resources indicators published

in the SD report for fi scal year 2007.

This reporting process has been defi ned and

applied by the Imerys Group and is formalized

through environmental, safety and human

resources procedures.

I. NATURE AND SCOPE OF OUR WORK

We have performed for the selected indicators:

• a review of a selection of indicators (frequency

and severity rate, total staff, turnover,

proportion of women, number of transfers

between Group and sub-groups, number of

shareholder employees, number of training

hours, age pyramid, seniority, number of sites

covered by an Environmental Management

System, number of environmental non-

compliance indicators related to a fi ne, total

amount of fi nes related to non-compliance

with environmental requirements, energy

consumption, CO2 emissions due to

energy consumption, CO2 emissions due to

processes) of the organization implemented

by Imerys Group for data collection, validation

and consolidation, and of the reporting

procedures based on the principles of

relevance, completeness, reliability, neutrality

and understandability of the reporting

framework;

• interviews with Imerys correspondents and

personnel responsible for the collection and

consolidation of the selected indicators at

Group, business group and division levels,

and in a selection of Group industrial sites(1)

in order to analyze the understanding and

application of Group procedures;

• arithmetical tests, performed on a sampling

basis, with respect to the indicator calculation

methodology used for the sampled sites and

consistency checks on the consolidation of

indicators. These tests covered 4.0 to 8.3%(2)

of published consolidated data.

In order to assist us with this work, we

called on the services of our own in-house

environmental and sustainable development

experts.

The procedures we performed were not intended

to provide moderate or reasonable assurance

on the application of the reporting procedures or

the indicators themselves, and therefore do not

include all the verifi cations that would have been

performed as part of an audit or a limited review;

however, they have enabled us to report the

following observations on the procedures.

II. INFORMATION ON THE PROCEDURES

In 2007, the Imerys Group improved the process

for calculating CO2 emissions, in particular by

using internationally recognized emission factors,

and by improving the control process for “energy

consumption” and “CO2 emissions” data.

III. FINDINGS

As part of a continuous effort to improve the

environmental, safety and human resources

reporting of the Imerys Group, the quality of

the published data reporting process could be

enhanced by implementing the following actions:

• Increasing the awareness of the contributors

and validators with the aim of achieving a

better understanding of the reporting protocol,

as it relates to the “training hours” and

“internal mobility” indicators;

• Improving and reinforcing the reported data

control processes by the validators.

External auditors’ reportFiscal year ended December 31, 2007Statutory Auditors’ Report on the application of reporting procedures for a selection of environmental, safety and human resources indicators published in the Imerys Group 2007 SD report.

ERNST & YOUNG AuditFaubourg de l’Arche

11, allée de l’Arche

92037 Paris-La Défense Cedex

Deloitte & Associés185, avenue Charles-de-Gaulle

92524 Neuilly-sur-Seine Cedex

Paris-La Défense and Neuilly-sur-Seine, March 28, 2008

(1) The Imerys Kiln Furniture sites in Hungary and the Imerys TC sites in Sainte Foy and Pargny, France for the “Materials & Monolithics” business group, the Imerys sites in Limeira Ripasa, Marble

Hill and Sylacauga for the “Performance Minerals & Pigments” business group (2007 Group’s organization).

(2) Coverage rate calculated based on the following indicators: hours worked, total staff, number of training hours, energy consumption and CO2 emissions.

The full list of indicators that were covered by the auditors’ review procedures are provided on www.imerys.com in Sustainable Development / Strategy / External review report.

The Statutory Auditors

ERNST & YOUNG Audit Deloitte & Associés Jean-Roch Varon Nicholas L. E. Rolt

STATUTORY AUDITORS’ REPORT


GLOSSARY

Abrasives: substances used for wearing or

polishing.

Alumina: aluminum oxide (Al2O

3).

Andalusite: a natural alumino-silicate

mineral, transforming into mullite, an essential

component in acid refractories, when fi red.

Contains around 60% alumina.

Biogas: gas resulting from the fermentation of

animal or plant matter in the absence of oxygen.

Also called methanization, this process occurs

naturally in marshes or spontaneously in landfi lls

containing organic waste.

Biomass: organic, non-fossil matter of

biological origin forming a usable source of

energy.

Chamotte: calcined clays, usually calcined

in a rotary kiln, at high temperature (1 400 –

1 600°C), and which transform into mullite and

glass.

Corundum (Fused aluminum oxide, fused

bauxite): obtained by melting alumina (white

corundum) or bauxite (brown corundum) in an

electric arc furnace. During fusion, the physical

properties of aluminium oxide are modifi ed

(higher density, different crystal size and

structure).

Diatomite: a silica-based mineral formed from

the fossilized remains of microscopic aquatic

plants. Diatomite is used as a fi ltration agent

to make beer, fruit juices, some food products

and wine and to manufacture pharmaceuticals

and chemicals. It is also used as a mineral fi ller,

mainly in paints, and as an anti-adhesive for

plastic fi lms.

EMAS - Eco-Management and Audit

Scheme: an international standard with the

aim of promoting improvement in environmental

performance (assessment, communication on

results, training).

EMS: Environmental Management System.

Feldspar: natural mineral used for the

vitrifi cation of ceramic bodies in porcelain and

earthenware manufacturing.

Fillers and coatings: fi llers are added to paper

web to fi ll up the empty spaces. White pigments

improve the paper’s appearance and printability.

Coating involves applying a thin fi lm containing

a mixture of kaolin, GCC, PCC and selected

chemical additives and binders to paper to make

it glossier, brighter and more opaque.

GHG: greenhouse gas.

GRI: Global Reporting Initiative.

Ground calcium carbonate (GCC): GCC is

obtained by grinding and grading marble to

obtain particles with a precise size and shape.

The mineral is originally derived from sediments

of shellfi sh and marine fauna, exposed to various

degrees of heat and pressure over time.

High-performance graphite: natural

or synthetic crystallized carbon used for

applications including electrical batteries,

friction products (e.g.brake pads) and technical

lubricants.

IMA: Industrial Minerals Association.

ISO 14001: a standard defi ned by an

international organization with the aim of helping

businesses to manage the environmental

aspects of their activities, products and services

effectively.

Kaolin: also known as china clay, kaolin is a

natural white platy mineral derived from the

geological alteration of granite or similar rock.

Kaolins go through complex processing. When

ground, they give a range of products with

controlled particle size and platiness.

Kiln furniture: shaped parts made from

refractory materials (cordierite, mullite or silicon

carbide) that must provide good resistance to

mechanical and heat shock and be as light as

possible to save energy during fi ring.

Monolithic refractories: made of natural

or synthetic mineral raw materials, including

chamottes (calcined clays), andalusite, mullite,

bauxite, tabular or fused alumina, spinel

(alumino-silicate monolithics), magnesite,

dolomite and chromite (“basic” monolithics), to

which are added binders, e.g. refractory cement,

clay and additives. Monolithic refractories are

fi tted by casting, plugging or projection.

Perlite: a volcanic rock containing 2-5% water

which, when heated quickly, turns to steam,

dilating its rock matrix to up to 20 times its

initial volume. The result is a lightweight material

with a high contact surface. Perlite is used to

fi lter beverages. It also has signifi cant outlets

in construction (ceiling slabs) and horticulture

(off-ground cultivation).

Precipitated calcium carbonate (PCC):

PCC is produced artifi cially from natural

limestone. This is burnt to form lime and then

re-precipitated with carbon dioxide. The process

can be controlled to give different particle sizes

and shapes.

Refractory: materials that resist high

temperatures. Depending on the application,

they can also bear heavy weights or resist.

Vermiculite: Hydrated mica that expands

greatly when heated, this mineral is used in

particular for insulation and horticulture.

Zircon: zircon is sold in different forms such as

zircon sand or fl our. Fused zircon is obtained by

melting zircon sand in an electric arc furnace

and takes the form of precisely calibrated

grains and powders with sizes ranging from

several millimeters down to less than a micron.

Its unique properties mean it is used as a high

value-added raw material in a wide range of

applications, particularly on the refractories,

friction and technical ceramics markets.


46 | 47

Sustainable Development indices and ratings

Imerys 2007 Sustainable Developement Report is a publication of the Imerys group - Imerys is a French corporation (société anonyme) with Board of Directors and capital of 126,253,712

Trade register: RCS Paris B 562 008 151

Design and production Photo credits: Christian Chaise, Christian Chamourat, Tom Grow, Dominique Lecuivre, Véronique Popinet, Nicolas Richez, Gilles Rolle/REA, Howard Spiers, DR

Ground calcium carbonate (GCC)

Mica

Perlite (Apache tier)

Grès de Thiviers (natural color) in powder

EngobeHeath

(restored site in CornwallGreat Britain)

Moreover, the Imerys Group is regularly assessed by independent extra-fi nancial ratings agencies Eiris, EthiFinance, Innovest, SiRi and Vigeo.

Imerys is included in the ASPI Eurozone® index which consists of the 120 listed Eurozone companies that

perform best in social and environmental terms. The stocks are selected on the basis of Vigeo ratings

(see www.vigeo.com).

Imerys has been selected for inclusion in the Ethibel EXCELLENCE Investment Register

(see www.ethibel.org) since October 27th, 2007 and is being monitored regarding its CSR profi le since

then. To be included, companies have to score from “normal” to “very good” across all aspects of

sustainable business according to Ethibel’s rating model.

Since September 2006 Imerys has been included in the global responsible investment index, FTSE4Good.

Calculated and managed by leading index provider FTSE Group, the FTSE4Good Series includes companies

that have met stringent environmental, social and ethical inclusion criteria.

Christopher SheeheyVice-President Global Environment, Health & Safety and Group Sustainable Development [email protected]

Isabelle BiarnèsHead of Financial and Corporate [email protected]

CONTACTS

154-156, rue de l’Université – F – 75007 Paris – France

Tel.: + 33 (0) 1 49 55 63 00 – Fax: + 33 (0) 1 49 55 63 01 – www.imerys.com This

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