SUSTAINABILITY IN AUSTRALIA

Bauxite Mining

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Aluminum Smelting

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Greening Australia 30-year Partnership Celebration

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Sustainability Approach

 

In existence since 1963, Alcoa’s Australian operations have taken a leadership role in integrating sustainability into our business practices not only within Alcoa globally but also within Australia’s mining and aluminum industries.

Pinjarra Refinery

Pinjarra Refinery

Alcoa of Australia Limited (Alcoa of Australia), owned 60% by Alcoa Inc. and 40% by Alumina Limited, operates the mines, refineries, and smelters. Alcoa Australia Rolled Products Pty Ltd, 100% owned by Alcoa Inc., operates the rolled products plants and recycling operation. Alcoa Fastening Systems Australia Pty Ltd. and Alcoa Wheel Products Australia Pty Ltd., both owned 100% by Alcoa Inc., have manufacturing or distribution facilities in Australia.

 

Within these operations, we approach sustainability through our commitment to innovation, safety, community engagement, and environmental stewardship, as well as being part of the climate-change solution. Helping focus our efforts are Alcoa’s values, standards, and global strategic sustainability targets.

 

Our contribution to Australia’s sustainability is multifaceted and includes royalties, jobs, community investment, and investment in research and development to reduce environmental impacts and conserve natural resources. Annually, more than 75% of Alcoa of Australia’s total revenue stays in Australia through wages, local purchasing, taxes, capital investment, and dividends to Australian shareholders.

 

Products

In Australia, we operate the world’s largest integrated bauxite mining, alumina refining, aluminum smelting, and rolling system.

 

Alcoa of Australia’s Western Australian and Victorian operations produce approximately 20% of Australia’s aluminum and almost 45% of the country’s alumina, which meets around 10% of world alumina demand. Most of the alumina we produce is exported to key markets, including China and the Middle East. We also export non-metallurgical alumina and aluminum ingot.

 

Huntly Mine in Western Australia

Huntly Mine in Western Australia

In 2012, we mined more than 34.7 million wet metric tons (31.8 million dry metric tons) of bauxite from our two mines in Western Australia’s Darling Range. We processed the bauxite at our three Western Australian refineries, producing more than 9 million metric tons of smelter-grade alumina. Efficiency improvements resulted in a new annual Western Australia system record of 25,104 metric tons per day, up 413 metric tons per day from 2011. This was supported by annual records at our Pinjarra and Wagerup refineries.

 

Our Pinjarra Refinery celebrated 40 years of operation in 2012. The location is regarded as one of the most successful and cost-efficient alumina refineries in the world. It has grown from an initial production capacity of 250,000 metric tons of alumina per year to approximately 4.3 million metric tons today.

 

Our Point Henry and Portland Aluminium smelters, the latter of which is owned 55% by Alcoa of Australia, produced approximately 492,000 metric tons of aluminum combined in 2012.

 

Since 1965, our aluminum rolling mills in Victoria and New South Wales have been producing aluminum sheeting that is used to make aluminum food and beverage cans, bottle screw caps, and aluminum ingots. In 2012, the mills produced 130,815 metric tons of rolled product, down slightly from the 130,979 metric tons produced in 2011. Both aluminum sheeting and ingots are exported, with export revenue accounting for 58% of the mills’ 2012 sales.

 

Used beverage cans are melted at the Yennora plant

Used beverage cans are melted at the Yennora plant

We operate the largest aluminum recycling plant in the southern hemisphere at Yennora, in western Sydney. In 2012, the facility recycled approximately 77,000 metric tons of aluminum, including almost 600 million used aluminum cans. We used this recycled aluminum to help produce enough can body sheet for 5.6 billion new cans.

 

Our fastening business in Melbourne, Victoria, manufactures, markets, and distributes specialty fastener products, including wire thread inserts and thread repair kits. These are used to strengthen threads in original equipment manufactured for the automotive, electronics, aerospace, and other industries.

 
Our Melbourne operation is also the Australasia distribution center for Alcoa-manufactured high-strength fasteners from the United States. These specialty fasteners are generally utilized in industries and applications where loosening of conventional fasteners occurs because vibration-induced stresses cause connection failure and component damage. In 2012, revenue amounted to approximately US$14.2 million, with close to 65% derived from exports to more than 50 countries.

 

Our wheel products business is a warehousing and distribution center for imported Alcoa forged wheels and associated accessories. We also supply tire-fitting services for truck and trailer original equipment manufacturers.

 

In 2012, our alumina, aluminum, rolled product, and fastening businesses faced lower margins due to the high value of the Australian dollar against the U.S. dollar; restricted global demand for some products; aluminum prices at their lowest in 25 years in Australian dollar terms; and increasing input costs. Other significant issues we faced included energy security issues and production cost increases.

 

Despite these conditions, we achieved our overall productivity improvement targets for the year.

 

Government Assistance

In mid-2012, Alcoa of Australia received US$41.6 million in assistance from the Australian federal government and an additional amount from the Victorian state government to help secure the viability of the Point Henry Smelter until at least July 2014.

 

Point Henry Smelter

Point Henry Smelter

Challenging global conditions, a low aluminum price, the high Australian dollar, and input costs contributed to the smelter’s losses, and we put it under review in early 2012. The assistance allowed us to save up to 500 jobs after a reduction of approximately 10% of the workforce that was mostly achieved through a voluntary redundancy program.

 

In return for the assistance, Alcoa of Australia committed to focus on finding more cost savings and continuing to invest in efficiency repairs and maintenance. The Victorian state government also announced it would provide a further US$4.16 million to a local industry fund that will help Alcoa’s contractors and suppliers, and those of other Geelong manufacturers facing hardship, improve efficiencies and productivity.


Environment

Our core business in Australia—the mining, refining, and processing of aluminum—is inherently energy- and water-intensive. Other environmental challenges include greenhouse gas (GHG) emissions; mine rehabilitation; management of bauxite residue; process waste recycling; and gray water usage.

 

While we tend to be more efficient than other operations in the country and around the world in key areas, we continue to seek ways to improve the environmental performance of our operations in line with Alcoa’s global sustainability targets. We also remain committed to working with our stakeholders on these endeavors.

 
Energy

Energy will always be a critical strategic issue for us in Australia. Reliable, secure, long-term energy supplies at a competitive price remain essential to our business success.

 

Anglesea Power Station

Alcoa’s Anglesea Power Station generates electricity for the Point Henry Smelter.

In Western Australia, our refineries rely on natural gas, which is a clean transitional fuel. Our smelters and rolling mill in Victoria use electricity generated from brown coal, as do most industries and residents in the state. Our rolling mill and recycling plant in New South Wales use a combination of natural gas and electricity generated from black coal.

 

In 2012, we had a slight increase in energy use compared to the previous year due to increased production across our Australian operations. Because our operations are energy-intensive, we are committed to investigating the most energy-efficient ways of doing business.

 

In Western Australia, Alcoa of Australia is supporting new entrants into the state’s gas market to diversify supply and promote competition. Over the last decade, the business has invested more than US$104 million with companies like Buru Energy, Transerv, and Empire to support their search for onshore gas fields and help secure long-term competitive energy supplies for our Western Australian operations. Alcoa of Australia currently consumes approximately 25% of Western Australia’s total domestic gas supply.

 

Energy prices in Australia have risen considerably and are predicted to continue increasing. Although we expect to source the bulk of our energy requirements through internal generation or from long-term contracts, further significant price increases or the inability to extend or negotiate new energy contracts at competitive rates may impact profitability.

 

Water

Water is essential to our operations. With annual rainfall decreasing in parts of Australia during recent years, we need to continually monitor our long-term water strategy.

 

At the global level, Alcoa has a corporate goal to minimize freshwater use across all operations to reduce competition for water between communities and the environment. To meet this goal at the regional level, we have implemented methods to improve heat exchange efficiency, which reduces the evaporation of production process water in our Western Australian refineries; make better use of water for dust control; and explore increased reuse of wastewater and fit-for-purpose, lower-quality water.

 

For example, our Yennora Rolling Mill has reduced its demand on local water sources by about 80% after securing a recycled water supply. Our Portland Aluminium Smelter has reduced potable water use by 8% after switching to recycled water for its cooling system equipment.

 

The majority of Alcoa of Australia’s water needs for mining, refining, and smelting are met by surface water runoff collected from our own and adjacent properties; streams and catchments; groundwater accessed via licensed bores; recycled water from local wastewater treatment plants; and freshwater purchased from water-service providers. While groundwater and recycled water sources have been reliable and consistent, surface water sources have been reduced by as much as 90% in some areas due to low rainfall averages over the last few years.

 

We recycle and reuse a high proportion of all onsite water at our refineries, with only approximately 15% of the water flow coming from freshwater sources.

 

In 2012, Alcoa of Australia’s freshwater use decreased 6.7% from 2011 levels. This was due primarily to variability in rainfall conditions impacting surface-water runoff and direct rainfall collection from our Western Australian refinery and bauxite residue areas.

 

While there was an improvement in rainfall at our Western Australia locations during the winters of 2011 and 2012, we improved our capture efficiency from licensed surface water supplies and made better use of water storage facilities by ensuring that more of the stored water is available for recovery. We are also exploring how to utilize more secondary-treated sources of wastewater in our processes and still meet product-quality requirements. Potential recycled water sources from as far away as the Perth metropolitan area are periodically assessed to identify viable water sources for our Western Australian refineries.

 

Greenhouse Gas Emissions

The production of aluminum results in GHG emissions, and we have been exploring process changes and other options to reduce them.

 

For example, the Portland Aluminium Smelter has documented the aluminum industry’s first quantitative proof of starting smelting pots with zero perfluorocarbons (a greenhouse gas). This new approach to pot starts has the potential to reduce total plant perfluorocarbon emissions by more than 12% annually and significantly extend pot life. It is being integrated into our Australian smelters and shared as a best practice within Alcoa globally.

 

Alcoa of Australia has recently researched and tested methods to sequester carbon dioxide (CO2) in an inert mineral form into bauxite residue. The process, which reduces the alkalinity of the bauxite residue, is operated on a full scale at the Kwinana Refinery using waste CO2 from neighboring industry. We are now working on methods to deploy the technology to other refineries.

 

Another example of our efforts to reduce GHG emissions comes from our Australia-based Technology Delivery Group, which has developed a process that uses naturally occurring bacteria to consume an impurity, called oxalate, in the alumina refining process. The process reduces carbon dioxide emissions and energy use and saves millions of dollars compared to conventional destruction technologies. (See a case study on the process.)

 

Our combined 2012 direct and indirect GHG emissions went up slightly compared to 2011, mainly due to increased production and energy consumption at our Alcoa of Australia facilities.

 

Carbon Pricing Legislation

In July 2012, the federal government introduced legislation that imposes a cost on companies emitting large amounts of GHG in an effort to reduce these emissions and facilitate investments in cleaner energy technology. Our facilities exceed the threshold for emissions reporting and are subject to the carbon pricing mechanism.

 

We support actions that deliver reductions in GHG emissions without compromising the international competitiveness of Australian industries and jobs. Striking the right balance is critical to ensure there are not significant negative impacts on Australia’s alumina and aluminum industries from carbon pricing. It would be counterproductive if carbon pricing drove Australian business offshore to countries with little or no carbon price, as this simply shifts emissions to another part of the world rather than reduce global emissions.

 

The Australian government has recognized this risk, and emissions-intensive, trade-exposed industries such as ours receive significant assistance in the form of free carbon permits.

 

Mine Rehabilitation

Alcoa of Australia operates two bauxite mines in the Darling Range south of Perth in Western Australia, where bauxite is extracted and sent to our three alumina refineries. We also mine coal at our Anglesea mine in Victoria.

 

Rehabilitated jarrah forest

Rehabilitated jarrah forest

In Western Australia, our mines are located within a native jarrah forest, which is renowned for its diverse flora. Our rehabilitation goal is to restore 100% of the species richness in the native forest to the rehabilitated areas 15 to 18 months after rehabilitation is complete.

 

Monitoring of all restored mine pits rehabilitated in 2010 showed an average of 80.4% species richness in 2012. This is lower than our 100% goal due to a variety of factors, including reduced rainfall and some operational limitations. Restoring species richness to the 100% target remains a high priority.

 

Our long-term goal is to rehabilitate an equal amount of land that we disturb for mining annually. In 2012, newly disturbed land due to our active mining and infrastructure development in Australia totaled 680 hectares (1,680 acres). Newly rehabilitated land amounted to 804 hectares (1,987 acres).

 

Bauxite Residue

Bauxite residue is a byproduct of alumina refining. It consists primarily of sand, mud, and some residual caustic soda from the alumina refining process.

 

We reuse much of the sand to construct residue drying areas—often called residue storage areas—where we dry the mud. As the mud dries, we lay more on top to form a stable residue stack. Upon closure, each residue storage area is capped with a sand layer and re-vegetated in a way that meets the agreed future land use objectives for the site. This vegetation also assists in controlling wind and water erosion of the stack.

 

We continue to explore opportunities to use bauxite residue as a source material for a variety of applications. We are also developing methods to reduce the environmental footprint of residue storage and chemically render the material so it is more suitable for reuse or long-term management.

 

ReadyGrit in a bunker at an Australian golf course

ReadyGrit in a bunker at an Australian golf course

Our Technology Delivery Group has identified a number of possible sustainable uses for bauxite residue, including ReadyGrit™ (formerly known as Red Sand™). This red-colored crushed rock material can be used as general fill, as construction backfill, for turf top dressing, as bunker sand, or as a material suitable in road base construction. The Radiological Council of Australia and the Western Australian Health Department have endorsed the product’s use.

 

ReadyGrit could potentially reduce our global bauxite residue volume by one-fifth while providing an environmentally sound solution to Western Australia’s declining sand supplies.

 

Demonstration trials using the material from a pilot plant at our Kwinana Refinery continued in 2012, and we will conduct further reviews and assessments with our partners throughout 2013.

 

During 2011 and 2012, we undertook significant work to understand the feasibility of introducing large-scale filter presses for bauxite residue in Western Australia. The filter presses essentially work by forcing the moisture out of the bauxite residue, leaving behind a dry filter cake. If this technology proves a viable option, it could have the following advantages:

  • Residue operations that could be sustained in excess of 10 years within the current footprint;
  • Significant reduction in water use at the refinery and in residue management;
  • Reduced potential to produce dust from the residue drying areas; and
  • Reduced potential to impact groundwater.

 

In 2012, Alcoa’s global Manufacturing and Technology Council endorsed continued investigation of the technology, including potential supplier assessments and full-scale design work. We also will continue working to understand the full implications of residue filtration on the refining process, including the management of process impurities that will be directed back into the alumina refining process stream.

 

Environmental Performance—Alcoa of Australia
  Direct Greenhouse Gas Emissions
Million metric tons of CO2 equivalents
Indirect Greenhouse Gas Emissions
Million metric tons of CO2 equivalents
Freshwater Use
Millions of cubic meters
Landfilled Waste
Thousands of metric tons
2008 7.03 10.55 21.2 19.2
2009 6.69 10.07 24.1 15.4
2010 6.70 9.68 21.0 12.0
2011 6.69 9.68 25.1 13.0
2012 6.69 9.81 21.0 12.8
Environmental Performance—Alcoa Australia Rolled Products
  Direct Greenhouse Gas Emissions
Million metric tons of CO2 equivalents
Indirect Greenhouse Gas Emissions
Million metric tons of CO2 equivalents
Freshwater Use
Millions of cubic meters
Landfilled Waste
Thousands of metric tons
2008 0.11 0.18 0.4 6.9
2009 0.10 0.16 0.4 5.5
2010 0.08 0.13 0.3 4.5
2011 0.09 0.14 0.3 4.1
2012 0.09 0.14 0.3 3.8
 

Workplace

Health & Safety

We strive to exceed the expectations of our workforce and the broader community in relation to health and safety. We stress the importance of maintaining a safe workplace and promote staff wellness through comprehensive health and safety programs that are focused on prevention and reviewed and updated continuously.

 

Our goal is to improve our safety record by 20% each year until we achieve zero for our three key health and safety metrics: lost workday incident rate, total recordable incident rate, and all injury rate. In early 2012, we also began using the days away, restricted, or transferred (DART) rate to further focus our incident prevention efforts on eliminating the more serious incidents first.

 

We implemented a number of important safety initiatives in 2012, including:

  • Introduction of the human performance (HP) program across all of our Australian businesses. HP develops our employees and contractors’ skills and knowledge of how their behavior influences their safety in the work environment and allows us to improve their capability and performance. As a result, error-likely situations are addressed before they become problems, and work quality and safety improve.
  • Continued use of the “high-risk tasks of the day” initiative at Alcoa of Australia. The program addresses the most pressing health and safety issues by asking work groups to identify one task each day that may have the potential to cause significant harm. Once the task is identified, the groups conduct a systematic work method review and targeted observation to ensure adequate controls and supervision are in place to manage safety.
  • Completion of more than 200 fatality prevention projects across Australia of Australia.
  • Development of the Fit-for-Work Program, which went into effect in early 2013 in Alcoa of Australia locations. The initiative includes a new policy, updated procedures, and an education program around the prevention and management of fatigue and issues associated with drug and alcohol use.
  • Alcoa Fastening Systems’ introduction of onsite physiotherapy services to assist with improving musculoskeletal disorders and workplace ergonomics to ensure compatibility with the needs, abilities, and limitations of employees. Since the introduction of the program in late 2012, no musculoskeletal injuries have been reported.
  • Use of summer campaigns to help employees and contractors stay focused on daily tasks and make them aware of the unique hazards that exist during the summer period when the number of injuries is greater historically.
  • Implementation of a sustainable safety improvement program at the Point Henry Smelter to reverse a less-than-acceptable 2011 safety performance. The program resulted in the doubling of risk notifications, all employees being trained in HP, and an increase in the HP participation rate. Compared to 2011, the smelter’s total recordable incident rate dropped by 51%, the DART rate declined 69%, and worker compensation costs fell significantly. These achievements occurred while the future of the facility was under review and morale was low.

 

In addition to core safety programs, we run a number of health and well-being programs that are focused on the prevention of health issues and creation of a healthy workforce. These include:

 

Alcoa of Australia has seen a significant reduction in the frequency of classified occupational diseases over the past five years, mainly due to reductions in work-related hearing loss. In 2012, our Road to Silence hearing conservation program was awarded a safety innovation award from the Western Australian Chamber of Minerals and Energy for its commitment to reduce occupational noise exposure and prevent hearing loss.

 

Health & Safety Performance—Alcoa of Australia
  Fatalities
Employee/contractor
Lost Workday
Incident Rate
Days Away, Restricted, or Transferred (DART) Rate Total Recordable
Incident Rate
2008 0 0.34 5.24
2009 0/1 0.07 3.60
2010 0 0.47 3.22
2011 0 0.31 2.97
2012 0 0.43 1.29 2.31
Health & Safety Performance—Alcoa Australia Rolled Products
  Fatalities
Employee/contractor
Lost Workday
Incident Rate
DART Rate Total Recordable
Incident Rate
2008 0 1.02 5.42
2009 0 0.14 5.08
2010 0 0.20 4.59
2011 0   0 1.72
2012 0   0 1.30 1.85
Health & Safety Performance—Alcoa Fastening Systems
  Fatalities
Employee/contractor
Lost Workday
Incident Rate
DART Rate Total Recordable
Incident Rate
2008 0 0 1.39
2009 0 0 1.48
2010 0 0   0
2011 0 0   0
2012 0 0 0 1.65
Health & Safety Performance—Alcoa Wheel Products
  Fatalities
Employee/contractor
Lost Workday
Incident Rate
DART Rate Total Recordable
Incident Rate
2008 0 0   0
2009 0 0 3.67
2010 0 0 3.78
2011 0 0   0
2012 0 0 0   0
 
People

We employ more than 5,500 people in our Australian operations and indirectly support more than 20,000 additional jobs across the country.

 

To attract, motivate, and retain the best people, we aim to provide a work environment that encourages continuous learning and emphasizes integrity, respect, excellence, health, and safety. 

 

In some technical areas of our business, recruitment remains a challenge. The level of activity within the resources and mining sector, particularly in Western Australia, continues to create high demand in areas such as engineering and environmental services. We need to devise attraction and retention strategies that allow our businesses to remain competitive within the market while maintaining flexibility in high-demand skill areas.

 

Labor Relations

In Australia, we are committed to working with labor unions. Enterprise bargaining agreements (EBAs) reflect the commitment of the company, unions, and workforce to maximize productivity, efficiencies, business benefits, and supply to customers.

 

Within Alcoa of Australia, 68% of employees are covered by EBAs. In 2011, we finalized six EBA negotiations. In 2012, we commenced negotiations of the Western Australia Operations Agreement with the Australian Manufacturing Workers Union (AMWU). This agreement covers 580 employees and expires in June 2013. Seven other EBAs will be negotiated throughout 2013, with two expiring in 2013 and five in early 2014.

 

Alcoa Australia Rolled Products has two EBAs. One covers the Yennora rolling mill and recycling plant, and the other is for the Point Henry rolling mill. The Point Henry agreement expired in 2012 and is being renegotiated in 2013.


All EBAs are certified by Fair Work Australia.

 

Training and Development

Retaining our people is a key strategic priority across our businesses in Australia. We recognize the importance of building skills and providing opportunities for personal development and career growth.

 

We take a broad approach to learning and development and offer a number of programs and development opportunities to employees at various levels. In 2012, we deployed the AlcoaLearn online learning management system across our Australian operations. This system provides employee development programs to meet both organizational requirements and individual development needs.

 

We continued to deploy the Alcoa Applied Management Program in 2012 but with significant changes to the curriculum. These included the availability of accreditation of an Advanced Diploma of Business under the Australian Qualification Framework (AQF); increased levels of executive participation to increase business acumen; training in key business processes, such as coaching and assessing performance; the Alcoa Change Management model; the preparation of individual development plans; and safety plans.

 

Graduate and School Leaver Opportunities

The Alcoa of Australia Graduate Development program is a three-year initiative targeted at individuals who have completed a tertiary degree. The program provides professional and personal development, which prepares the graduates for more senior roles as their career advances.

 

Graduates are offered opportunities across a range of disciplines in both Western Australia and Victoria. These include engineering, mining, science, commerce, human resources, environment, and health and safety. At the end of 2012, 40 graduates were employed across the business.

 

Each year, we offer a variety of apprentice positions to ensure we can meet our future operational need for trade-based employee resources. While a large number of our apprentices are employed directly from schools within our local communities, we also offer a number of apprenticeships for more experienced workers. At the end of 2012, we had 132 apprentices across our Alcoa of Australia and Alcoa Australia Rolled Products businesses.

 

Our trainee programs aim to improve employment prospects and widen participants’ career options. They are nationally accredited under the AQF and provide synchronous and asynchronous learning opportunities. At completion, participants receive a certificate of competency. In 2012, Alcoa of Australia took on 26 new trainees, taking the total number to 96.

 

Diversity

In 2012, Alcoa of Australia received external recognition for its diversity commitments by being named an Employer of Choice for Women by the Equal Opportunity for Women in the Workplace Agency for the 11th consecutive year.

 

Alcoa Australia Rolled Products is supporting a study by the Australian government’s Office for Women into the shortage of women in engineering in non-traditional industries. The study, which will be completed in 2013, is focused primarily on the mining sector, but our rolled products business has been included as the only manufacturing organization in the study. We are also involved in best-practice sharing with other businesses via the Australian Human Resources Institute’s annual diversity in the workplace seminar and a Geelong-based networking forum.

 

In 2012, Alcoa of Australia launched an Inclusion Steering Committee, headed by its managing director, to lead and grow the company’s commitment to employee equality, respect, and diversity. The committee is charged with:

  • Developing Alcoa of Australia’s strategic direction around inclusion;
  • Sponsoring and supporting initiatives that promote inclusion;
  • Providing examples of best practice behaviors; and
  • Helping embed a flexible and inclusive workplace culture that embraces change, new ideas, and respect for the individual, while creating equal opportunity to succeed.

 

From time to time, the committee seeks advice from experts and advisory groups, including the Alcoa Women’s Network and Employees at Alcoa for Gay and Lesbian Equality network.

 

Supply Chain

Our suppliers play an integral role in helping us achieve our sustainability goals, and we attempt to build relationships with suppliers who behave in a responsible and sustainable manner.

 

The goal of our local community procurement policy is to add value to local economies by: 

  • Inviting capable suppliers to bid on every locally supplied or locally manufactured good or service;
  • Giving preference to local businesses in competitive situations;
  • Working with local business-interest groups to identify local suppliers and spread awareness of business; and
  • Structuring bid packages to enable local supplier participation, where possible.

 

For each initiative where we have identified local supplier participation, a cross-functional team consisting of the location commercial manager, community relations officer, and business unit stakeholders determines bid strategies and award decisions.

 

Some of the overall benefits provided to local businesses include the awarding of short- and long-term contracts and downstream benefits from our extensive apprentice training programs and traineeships.

 

In 2012, Alcoa of Australia and Alcoa Australia Rolled Products spent approximately US$1.6 billion with local suppliers (excluding energy).

 

During the Point Henry Smelter review in 2012, Alcoa of Australia held joint workshops with senior representatives from a number of key suppliers and contractors to convey the challenges facing the smelter. Through these workshops, we achieved sustainable savings for the smelter.

 

Alcoa Fastening Services & Rings worked with all of its suppliers in 2012 to introduce returnable and recyclable packaging to minimize landfilled waste.

 

With the involvement of its packaging suppliers, Alcoa Australia Rolled Products minimized its product packaging for both domestic and export markets and maximized container payloads for the export market using best-practice containerization techniques.

 

Community

We invest in a wide variety of community programs and organizations as part of our commitment to sustainability. Our partnerships support reputable nonprofit and community-based organizations that deliver proven long-term community benefits.

 

In 2012, we invested more than US$4.1 million (including Alcoa Foundation grants) in partnerships across five focus areas: 

  • Sustainable environment;
  • Community health and safety;
  • Tomorrow’s workforce and leaders;
  • Community capacity and resilience; and
  • Volunteering.

 

National Partnerships

Greening Australia is Alcoa of Australia’s signature environmental partner, chosen due to its national and regional presence and its ability to tackle critical issues that include salinity, declining water quality, soil degradation, climate change, and biodiversity loss.

 

Greening Australia Rehabilitation Project

Alcoa employees volunteered for a Greening Australia rehabilitation project.

In 2012, Alcoa of Australia and Greening Australia celebrated the 30th anniversary of the partnership, which is one of the longest corporate and environmental non-governmental organization partnerships in Australian history. 

 

With Alcoa, Greening Australia has delivered a suite of sustained, integrated, community-oriented environmental initiatives that have had a major impact on environmental management in Australia. The partnership has been instrumental in educating, supporting, and facilitating regional communities to take care of their environments.

 

The Alcoa Foundation’s Advancing Sustainability Initiative is a global commitment to environmental research. Australia’s signature projects include the following, both of which have been awarded Australian Research Council linkage grants to further their research:

  • The Phosphorous Management Research Program in Western Australia undertakes research to develop widely applicable approaches to reduce the loss of phosphorus from farms into waterways and estuaries in the Peel Harvey catchment. In 2012, soil and hydrological data were collected and analyzed to provide greater awareness and understanding of nutrient overload issues in the local landscape.
  • The Biochar and Energy from Trees Research Project in Victoria aims to harness the opportunity provided by emerging carbon markets to re-vegetate land within Australia’s nationally recognized biodiversity hotspots. The project has grown out of the loss of biodiversity and elevated levels of carbon dioxide, which have arisen from widespread clearing of land for agriculture. New market opportunities to counter these problems are emerging. They include carbon markets for bioenergy (renewable energy derived from biological sources) and biosequestration (the capture and storage of atmospheric carbon by biological processes). As few market drivers are available currently to fund the change required to achieve resilient, sustainable landscapes, this investment is helping provide market-based incentives to farmers to accelerate their commitment to sustainable land use well into the 21st century.

 

Sculpture by the Sea

Students connect with art during Sculpture by the Sea.

Sculpture by the Sea, an annual beachside outdoor sculpture exhibition, is the signature arts partnership for Alcoa of Australia. Through the Alcoa School Education Workshops, approximately 1,500 primary schoolchildren in Western Australia were provided with a unique opportunity to connect with art in an inspirational setting at Cottesloe Beach in 2012. In addition, 300 children from schools located near our operations took part in exclusive artists’ tours and aluminum sculpture workshops.

 
State Partnerships

In 2011, we announced a three-year commitment to The Deakin Centre for Rural Emergency Medicine (CREM) in Victoria. This facility is a joint initiative between Alcoa of Australia and the Deakin Medical School, the Victorian government, Portland District Health, and South West Healthcare (Warrnambool).

 

Based in Warrnambool and Portland, the CREM addresses emergency medical shortages in Victoria’s southwest, enhances the quality of regional medical care, and provides clinical leadership, research, and training in emergency rural medicine. Additionally, CREM contributes to teaching programs and provides emergency medical training for junior and senior medical staff and regional medical and general practitioners.

 

In Western Australia, our long-term partnership with Fairbridge Western Australia Inc. in Pinjarra supports the Indigenous Sustainable Employment and Life Outcomes Initiative. This initiative helps isolated, at-risk young indigenous people from the Peel and outer regions become valued and contributing members of society.

 

The initiative uses training in construction, general building maintenance, painting, conservation and land management, administration, outdoor recreation, and hospitality as tools to bring about positive, long-term, sustainable change in participants’ lives. In addition to receiving training, the graduates obtain industry standard qualifications. Our funding also has helped Fairbridge Western Australia leverage a variety of government and industry grants to assist in the growth and sustainability of the program.

 

A two-year Alcoa Foundation partnership with Youth Focus commenced in 2012. The nonprofit organization supports vulnerable young Western Australians by offering a range of mental health services. The US$208,000 partnership seeks to provide young people in the Peel region, near to Alcoa of Australia’s operations, with greater access to free counseling services to help overcome issues associated with depression and self harm. In addition, the partnership will enable Youth Focus to trial new client feedback collection and storage methods, with the potential for these to be introduced state-wide in the future.

 

Employee Volunteering

More than 40% of employees across Australia donated in excess of 10,000 volunteer hours to community projects and nonprofit organizations during Alcoa Foundation’s seventh annual Worldwide Month of Service in October 2012.

 

Australia Month of Service

Alcoa volunteers beautify a daycare center during Month of Service.

Employees volunteered to do a wide range of activities, including weeding wetlands, painting fences, packing food hampers, marshaling at aged-care games, building sensory gardens for dementia patients, and serving food to those in need.

 

As part of the Month of Service, Alcoa of Australia pledged 10,000 volunteer hours to the Give 1 Project, which was launched by Alcoa and five other Australia companies through the Corporate Volunteer Council (CVC) of Western Australia.

 

Give 1 is a call-to-action campaign for corporate giving in Western Australia. The CVC challenges corporations to get their workforces more engaged in volunteering by establishing a strategy around regular staff volunteering opportunities. The Give 1 project is centered on the concept of giving one day, one person, one hour, or one percent of staffing hours to volunteering and corporate giving. In total, more than 32,000 hours were pledged to Give 1 by companies in Western Australia.

 

Participation in Alcoa’s signature volunteering programs ACTION and Bravo! remained strong in 2012, with 71 ACTION grants totaling US$175,500 and 932 Bravo! grants totaling US$233,000 being awarded to community organizations across Australia.

 

Other volunteering efforts included assisting customers after the devastating Queensland floods, collecting and packing food for needy people at Christmas, holding fundraisers for health awareness events, such as the R U OK Day, and participating in fundraising sports events.

 

Employee Volunteer Hours
2008 90,976
2009 94,407
2010 107,707
2011 97,238
2012 93,088
 
Stakeholder Engagement

In 2012, Alcoa of Australia partnered with the Australian Centre for Corporate Social Responsibility to conduct its third bi-annual stakeholder perceptions survey. The survey measures stakeholder views and perceptions about relationship quality, interactional justice (the degree to which stakeholders feel respected and satisfied with the explanations we provide them), satisfaction with procedural justice (perceived fairness of our decision-making procedures), communication effectiveness, and reputation.

 

The survey indicated Alcoa of Australia’s level of acceptance by stakeholders has improved at most locations since 2010. The average score for social license to operate was 3.96 out of a possible 5.0. We believe this result reflects the application of consistent and fair processes, good quality interpersonal engagement, and significant work building trust and developing shared goals with stakeholders.

 

Key 2012 Stakeholder Issues
Location
Issue
Response
Western Australia Mining Operations Environmental and community impacts of proposed mining operations. In 2012, we continued to meet with the Keysbrook Hills Community Group (KHCG) on a regular basis to address community concerns about potential impacts related to noise, traffic, water, dust, and the black cockatoo’s habitat. We proposed a tailored mine plan aimed at reducing the potential impacts of mining on members of the KHCG. The plan includes restricted mining operations for the next four years (6 a.m. to 6 p.m. except in winter, and Monday to Friday, excluding weekends and public holidays) and a commitment to rehabilitate the mine area within 12 months of the mining’s completion.
Western Australia Mining Operations A review of Alcoa of Australia’s Five-Year Mine Plan was conducted by the Mining and Management Program Liaison Group, which consists of representatives from the government departments responsible for state development, environment and conservation, water, and mines and petroleum.

Issues raised by the group as part of the review included Western Australia’s declining rainfall and the impact of rehabilitation prescriptions on the ground water levels and hydrology and stream zone ecology.
We worked cooperatively with the group, which provided input into the plan, to address the issues raised. The group provides advice to the minister for state development.
Anglesea Power Station, Victoria A local community group raised the issue of air emissions, particularly SO2, from our coal-fired power station at Anglesea. The group called for the release of the draft health risk assessment (HRA) that Alcoa of Australia voluntarily commissioned in 2008. We are currently updating the draft HRA using new data from both the power station and the mine. We have committed to publicly releasing the final version of the independently prepared report when completed in 2013.

We continue to work with the Anglesea Community Consultative Network, government departments, and any other interested parties, providing regular updates on these and other topics.

The results of ambient SO2 monitoring are reported on our Australian website.
Portland Aluminium Smelter, Victoria Impacts of low-level fluoride emissions on kangaroos. Research with the University of Melbourne is continuing to better understand and manage the effects of low-level fluoride emissions on the local kangaroo population. We implemented components of a management plan, including fencing off exclusions zones, re-vegetating areas close to operations, and minimizing fluoride emissions from the smelter, which remains one of the lowest fluoride-emitting smelters in the world.

The local community is kept informed of these activities via the Portland Aluminium Community Advisory Network, and we issue progress updates to other key stakeholders on a regular basis.
Point Henry Smelter, Victoria Point Henry Smelter viability review. Occurring across the first half of 2012, the review involved a comprehensive engagement process with employees, community partners, suppliers, and government. A range of cost-cutting measures and financial support from the federal and Victorian governments resulted in an announcement that the smelter will remain in operation until at least mid-2014.
Wagerup Refinery, Western Australia The Wagerup Sustainability Fund, created in 2008 as part of the commitments linked to the Wagerup Unit Three expansion (currently on hold), was held in trust with the Western Australian Community Foundation, which went into receivership in 2010. The fund required a new trustee and revised deeds of agreement. We are working to finalize the deeds of agreement with the shires of Waroona and Harvey (local government) to ensure continued operation of the fund.
Wagerup Refinery, Western Australia In 2012, successive years of incremental growth in alumina output at Wagerup had resulted in production approaching the annual limit of 2.6 million metric tons prescribed in the refinery’s environmental license. Without a production limit increase in the license, the refinery faced the prospect of winding back production and losing millions of dollars in revenue. Alcoa of Australia worked with the Department of Environment and Conservation and local community representatives to develop a proposal to gain an increase in licensed production based on the installation of a volatile organic compound emission offset project. Community representatives and environmental regulators agreed to an initial increase to 2.65 million metric tons to accommodate projected refinery output in 2012. This was reflected in a new environmental license issued in August 2012 and subject to an appeals process. A subsequent increase to 2.8 million metric tons per year will be granted upon completion and verification of the emissions reduction project.
Wagerup Refinery, Western Australia Discussions on Wagerup’s long-term residue management strategy with the local stakeholder reference group. We held seven meetings in 2012 to discuss commitments for a sustainable future in bauxite residue management. Topics included the height and location of future residue areas and how environmental risks associated with residue storage will be managed. We have responded with a range of guiding principles identified by the working group. A revised strategy document is awaiting approval from the minister for state development and is due for publication in 2013.
 

Awards

Employer of Choice for Women—Equal Opportunity for Women in the Workplace Agency
Alcoa of Australia
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Safety and Health Innovation Awards (systems category)—Western Australian Chamber of Minerals and Energy

Alcoa of Australia—Pinjarra Refinery

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Employee Volunteer Recognition Award (gold)—Western Australia Fire and Emergency Authority

Alcoa of Australia—Pinjarra Refinery

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Distinguished Service Award—Australia Microscopy and Microanalysis Society Inc.

John Cornell—Alcoa of Australia, Technology Development Group

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Case Studies

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Related Link

Alcoa in Australia