BHP Billiton Health Safety Environment & Community Report 2003

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Environment

Background

Our approach to environmental management is incorporated in our Charter, which states that we have an overriding commitment to health, safety, environmental responsibility and sustainable development. This is expressed further in our HSEC Policy, which states that we will:

• strive to achieve leading industry practice
• meet and, where appropriate, exceed applicable legal and other requirements
• set and achieve targets that include reducing and preventing pollution.

In addition, we follow the Management Standards that form the basis for our management systems at all levels. They cover the entire life cycle of operations, including decommissioning, closure and rehabilitation.

We own and operate a diverse range of businesses in different countries and ecosystems around the world; and these businesses, by their nature, have the potential to affect the environment.

This can occur in a variety of ways, including:

• greenhouse gas and other gaseous emissions, such as carbon dioxide and oxides of sulphur and nitrogen associated with combustion and smelting processes, fluorides from aluminium smelting and particulates from ore handling
• reductions in water quality as a result of the handling, use and production of hazardous materials, and acid rock drainage potential as a result of particular ore body characteristics at some of our sites
• impacts on land associated with land disturbance, land use changes and habitat removal
• alterations to biodiversity within terrestrial, fresh water and marine environments either directly or indirectly as a result of our operations
• indirect impacts encompassing any of the above as a result of the products and services we purchase, lease or provide.

Our focus for the past year has been on a number of fronts: working to improve environmental management systems and establish eco-efficiency plans at sites, increasing our understanding and refining our approaches to such issues as climate change and biodiversity, and improving our Company-wide environmental information systems to track performance.

A summary of our Company-wide environmental performance is presented in Figure 16, while CSG performances are presented in Appendix E. Further details on the environmental performance of our operations are available in the site-based HSEC Reports on our website at www.bhpbilliton.com

Figure 16. Summary of Environmental Performance 1999/00 to 2002/031

1. In the summary text of each performance category, information has been provided to facilitate year-to-year comparison of performance without BHP Steel.
2. Rehabilitation requirements assuming immediate closure of all operations. Escondida re-estimated its land area requiring rehabilitation in 2002/03.
3. Recycled water: Not all sites reported recycled water in 1999/00 and 2000/01.
4. Waste: Excludes recycled materials and mining-related materials, such as waste rock, tailings, coal reject and slag.
5. Transport and logistics operations were divested during 2001/02.
6. Greenhouse gases (1999/00 and 2000/01): Different methodologies of reporting were used prior to the BHP Billiton Dual Listed Companies merger.

Environmental performance

The following section discusses our environmental performance over the year and highlights some of the key initiatives and subsequent outcomes.

Environmental Management Systems and plans

By the end of June 2003, all of the sites requiring ISO 14001 certification of their Environmental Management Systems either received or were notified that they had been recommended for certification. A number of our joint venture partners are also certified, such as Valesul and Mineração Rio do Norte, along with some of our major contractors, such as those at our Escondida and Iron Ore operations.

Specific environmental management plans (with reduction targets aimed at driving eco-efficiencies) for energy conservation, greenhouse gas emissions, land management, water use, and waste management have been established at over 85 per cent of required sites. The plans that remain to be developed are still in progress, and it is anticipated that all sites will be completed by the end of calendar year 2003.

Environmental incidents and fines

No actual significant environmental incidents (level 3 or above in the BHP Billiton Consequence Severity Table, see Figure 17) occurred during the reporting period. Two incidents having the potential to be level 3 or above occurred. These related to hydrocarbon handling, where the hydrocarbons were released from a tank and pipeline, respectively, but were captured in secondary containment structures without entering the surrounding environment.

There were 1394 level 1 (low) and 84 level 2 (minor) environmental incidents reported, mainly due to spills and fugitive emissions.

Figure 17. BHP Billiton Environmental Consequence Severity Table

Accidental discharges of hydrocarbons to land and water totalled 104 600 litres during the reporting period. This consisted of a number of small-volume spills, including hydrocarbons released from primary containment facilities but captured in secondary containment facilities. Details of accidental discharges of hydrocarbons are presented in Appendix E.

We received four environmental fines during the reporting period, totalling US$37 572. Details of fines are presented in Appendix D.

Additionally, there were 22 environmental infringements reported (an environmental infringement is defined as a notice of violation, order or other notification such as a statutory notice from a governmental authority that has not resulted in a prosecution or a fine).

Environmental spending

Environmental spending for the reporting period was US$134 million, which includes costs for rehabilitation, remediation, environmental monitoring, and other environmental-related activities including environmental research and development. The costs of research and development include collaboration with institutions and academia to investigate strategies to reduce the environmental impact of our activities or improve the environmental performance of our products such as low-emission coal technology. These costs exclude expenditure associated with the operation and maintenance of pollution control equipment and the like.

Rehabilitation, remediation and closure

The Company makes financial provisions for site closure, rehabilitation and remediation activities according to United Kingdom Generally Accepted Accounting Principles (UK GAAP) and, as of 30 June 2003, this amounted to US$2025 million. This figure excludes cost allowances for human resources and community programs associated with closure. The more significant sites covered by this provision and the type of rehabilitation and/or remediation work contemplated include:

• a provision for the closure costs of all our Southwest Copper facilities as well as the remediation costs for the Pinal Creek State Superfund site in the State of Arizona in the US (We, along with other parties, are remediating groundwater contamination from mining operations.)
• a provision for the demolition of the former steelworks in Newcastle, New South Wales, Australia, and for remediation of sediment in the Hunter River adjacent to the former steelmaking site
• provisions for decommissioning, closure and rehabilitation for our energy coal mines in the US and South Africa, metallurgical coal mines in Queensland, Australia, bauxite mines at Worsley in Western Australia, iron ore operations in Western Australia and oil and gas operations in the UK and Australia.

Resource use

Land
We require our sites to have land management plans that protect and enhance land potentially affected by their operations. At 30 June 2003, 96 per cent of the required sites had land management plans in place.

During the year, the total footprint of land owned, leased and/or managed by our operations was 1 037 000 hectares. Of this, 7 per cent was used for mining operations, 3 per cent for infrastructure and the remainder for other purposes, including exploration and buffer zones. At 30 June 2003, land newly disturbed was 3540 hectares compared to 4520 hectares for the previous year. The reason there was less newly disturbed land was primarily a result of our open-cut Queensland coal operations not needing to disturb any further land for mining during the year. The area rehabilitated was 1790 hectares, a decrease from last year of 2230 hectares. Total land requiring rehabilitation reduced from 82 910 hectares to 77 160 hectares, mainly due to a clarification of the estimate of land requiring rehabilitation at our Escondida operations from the previous year. This is presented in Figures 18 and 19. Details for each CSG are presented in Appendix E.

Figure 18. Land Rehabilitated and Newly Disturbed 1999/00 to 2002/03	Figure 19. Land Requiring Rehabilitation* 1999/00 to 2002/03
	*Assumes immediate closure of all operations.

Energy
We established a target that all sites with emissions greater than 100 000 tonnes per annum of CO2 equivalent must have energy conservation plans with specific targets by the end of the reporting period. Eighty-eight per cent of our sites achieved this target, with the remainder still in progress.

Total energy consumption was 292 petajoules, a decrease from 396 petajoules last year. This was primarily due to the demerger of BHP Steel, which contributed 131 petajoules in 2001/02. While energy consumption rose during the year due to production increases at a number of our operations, this was partially offset by improvements at our manganese and chrome operations and initiatives in improving energy efficiency, such as the EKATI mine's Energy Smart Program (see Case Study No. 18). The trend for the Company is shown in Figure 20.

The major sources of energy use are from purchased electricity, natural gas, and coal and coke as shown in Figure 21.

The overall energy intensity index1 for the Company is illustrated in Figure 22. Energy intensity for a range of our products is presented in Appendix F.

Figure 20. Total Energy Use 1999/00 to 2002/03	Figure 21. Energy Use by Type 2002/03
Figure 22. BHP Billiton Overall Energy Intensity 2001/02 to 2002/03

Water
Availability of fresh water is an important global environmental issue. To this end, we required our sites with fresh water consumption greater than 500 megalitres per annum to have water management plans, including reduction targets, by the end of the reporting period. All but one of our sites were able to establish water management plans. However, many sites with water use below this threshold also reported that they had established management plans.

Total fresh water consumption for the reporting period was 132 630 megalitres, a decrease from last year's total of 147 100 megalitres. Recycled water was reduced from 543 000 megalitres from the previous reporting period to 175 350 megalitres. The reduction in the amount of fresh water consumed and water recycled was mainly due to the demerger of BHP Steel, which consumed 26 300 megalitres of fresh water and recycled 415 600 megalitres of water in 2001/02.

The Company also manages a number of additional licensed discharges at many of our worldwide operations; however, it is not practical to report these on a global basis.

Figure 23 presents water consumption trends for the Company, while Figure 24 provides the breakdown between fresh water consumed and water recycled.The overall fresh water intensity index1 is presented in Figure 25. Water intensity for a range of our products is presented in Appendix F.

Figure 23. Fresh Water Consumption 1999/00 to 2002/03	Figure 24. Fresh and Recycled Water Use 2002/03
Figure 25. BHP Billiton Overall Fresh Water Intensity 2001/02 to 2002/03

Gaseous emissions

While we are phasing out the use of ozone-depleting substances across our operations, during the year 160 kilograms of CFC equivalents were consumed by airconditioning and refrigeration systems.

Greenhouse gas emissions
Our greenhouse gas emissions for the year totalled 47.1 million tonnes of carbon dioxide equivalent (CO2-e), a reduction from last year's 60.0 million tonnes of CO2 equivalent. The primary factor in the reduction of emissions was the demerger of BHP Steel, which contributed 13.4 million tonnes of CO2 equivalent in 2001/02.

The greenhouse gas emissions for the past four years (1999/00 to 2002/03) are presented in Figure 26. The sources of greenhouse gas emissions are presented in Figure 27.

The overall greenhouse gas intensity index1 is presented in Figure 28. Greenhouse intensity for a range of our products is presented in Appendix F. The intensity reduction achieved for the year was 6 per cent; however, it should be noted that data can fluctuate on an annual basis.

Figure 26. Greenhouse Gas Emissions 1999/00 to 2002/03	Figure 27. Sources of Greenhouse Gas Emissions 2002/03
Figure 28. BHP Billiton Overall Greenhouse Gas Intensity 2001/02 to 2002/03

Oxides of sulphur and nitrogen
Oxides of nitrogen (NOx) emissions for the reporting period were 49 640 tonnes, compared to 55 750 tonnes last year. Oxides of sulphur (SOx) emissions totalled 50 020 tonnes compared to 56 330 tonnes last year. The Company's overall performance for NOx and SOx are presented in Figure 29 and Figure 30 respectively. Emissions by each CSG are presented in Appendix E.

The reduction in NOx and SOx emissions is mainly due to the demerger of BHP Steel. The purchase of diesel with low sulphur content by our sites also contributed to the reduction of SOx.

Figure 29. NOx Emissions to Air 1999/00 to 2002/03	Figure 30. SOx Emissions to Air 1999/00 to 2002/03

Fluoride
There was a significant decrease in fluoride emissions, from 1680 tonnes last year to 910 tonnes this year. This was due to substantial improvements in emission control at our aluminium smelters, including the environmental upgrade of potrooms B and C at Bayside, South Africa. The Company's fluoride emissions are presented in Figure 31, and emissions by CSGs are presented in Appendix E.

Figure 31.

Fluoride Emissions to Air
1999/00 to 2002/03

1. The Intensity Index has been developed as a Company-wide performance indicator on environmental aspects, such as energy use, greenhouse gas emissions and fresh water consumption. The ‘index’ concept allows performance from different business groups or sites, all of which may have different operating conditions and product mixes, to be added together to form an overall indicator per unit of production. The baseline for the Intensity Indices is 2001/02 and, as such, has a value of 100.

Waste

Waste reduction programs have the potential to greatly reduce the consumption of a wide range of consumables, thus reducing the use of natural resources embodied in the materials and reducing the quantity of material disposed. We set a target for all of our sites to have waste minimisation programs in place by the end of the reporting period. All of the sites required to have the plans in place achieved the target.

Total general waste (consisting of domestic and construction wastes) disposed of to landfill during the reporting period was 115 280 tonnes, an increase against the previous year's total of 107 400 tonnes. The increase was mainly due to construction associated with expansion activities at some of our sites.

Waste rock, tailings, coal reject and slag are excluded from our aggregate reduction target of 20 per cent in waste per unit of production by 30 June 2007.

Hazardous waste includes waste oil, chemical waste and hazardous baghouse dusts. Hazardous waste (excluding recycled materials, overburden, tailings and slags) generated in the reporting period was 79 940 tonnes. This consisted primarily of waste oil, chemical wastes, hazardous baghouse dusts and other hydrocarbon wastes.

Indicative trends of waste disposed of by the Company are presented in Figure 32.

The different types of waste disposed of are presented in Figure 33. Waste disposal by CSGs is presented in Appendix E.

As part of our waste minimisation program, we encourage our sites to reuse or recycle general wastes and minimise wastes going to landfill. Figure 34 shows the different methods employed to dispose of our general wastes. During the year, of the 36 300 tonnes of waste oil generated, 77 per cent was reused or recycled and the remainder disposed of in accordance with regulatory procedures (see Case Study No. 16).

Figure 32. Waste Disposal 1999/00 to 2002/03	Figure 33. Waste Disposed (excluding recycled and mining-related materials, such as waste rock, tailings, coal reject and slag) 2002/03
Figure 34. General Waste Disposal Methods 2002/03

Biodiversity

Our biodiversity initiatives advanced in a number of areas over the past year. As an ICMM member company, we have undertaken not to explore or develop mines in World Heritage Properties, and we are reviewing the situation with regard to certain World Conservation Union (formerly International Union for the Conservation of Nature - IUCN) Protected Areas Management Categories. In that light, we have assessed each of our sites to determine whether any of our operations is within protective categories I to IV of the IUCN. We have several sites adjacent to protected areas; and the Minerva natural gas project, which has been given full authorisation, has horizontally drilled underneath the Port Campbell National Park in Victoria, Australia (Category ll National Park Recreation).

We also initiated an analysis of significant biodiversity issues identified across the organisation. During the course of next year we will be exploring the development of biodiversity-related metrics that would be used to measure post-mining land rehabilitation.

Environmental spending for biodiversity initiatives amounted to more than US$1 million. Included in this total is a grant to the United Nations Environment Program (UNEP) World Conservation Monitoring Centre for their work on protected areas research, contributions to the ‘Revive our Wetlands’ program with Conservation Volunteers Australia (see Case Study No. 15), and the Waterways Conservation Program with Zoos Victoria.

Climate change

We are working on activities related to climate change in a number of ways, including the setting of greenhouse gas (GHG) reduction targets, requiring sites to develop GHG management plans, collaboration with customers, pricing carbon in investment decision-making and funding research activities.

Greenhouse gas management plans have been developed at 85 per cent of the 41 required sites (those sites with emissions greater than 100 000 tonnes of CO2 equivalent). Development of plans at the remaining required sites is in progress.

We have established a target to achieve an improvement in the greenhouse gas intensity of our operations' emissions (including emissions from purchased electricity) per unit of production of not less than 5 per cent over the period 2002 to 2007. To date we are on target.

We are committed to working with customers to improve energy efficiency in the downstream consumption of our Energy Coal products. In addition, we are assessing opportunities to use the Kyoto Protocol's Clean Development Mechanism to reduce emissions and promote sustainable development.

Carbon pricing sensitivity analysis is considered in our decisions for new projects and investments that would emit more than 100 000 tonnes of CO2 equivalent per annum.

We are also funding research into geological sequestration of CO2 and low-emission coal technologies (see Case Study No. 11).

Product stewardship

While the physical and chemical nature of metals ensures their infinite recyclability, we are working with commodity organisations to address life cycle and product stewardship considerations. For example, our Base Metals CSG is conducting Life Cycle Assessment studies for copper in conjunction with the International Copper Association and for zinc with the International Zinc Association. Additionally, they are taking a primary role in the efforts on lead stewardship through their involvement in the Green Lead™ project (see Case Study No. 40).

Our Stainless Steel Materials CSG has completed a Life Cycle Assessment with the Nickel Development Institute (see Case Study No. 39).

Our manganese business, in association with research institutes and universities, has embarked on an initiative to promote a selenium-free manganese product; and our Australian coal businesses have participated in the Australian Coal Association Research Program project, ‘Coal in a Sustainable Society’.

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