Greenhouse Challenge Program - 2003

THE GREENHOUSE CHALLENGE PROGRAMA N N U A L P R O G R E S S R E P O R T 4

P R E P A R E D F O R T H E R E P O R T I N G P E R I O D 1 J A N U A R Y – 3 1 D E C E M B E R 2 0 0 3

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WMC Resources has used its best endeavours to ensure that the information contained in this report is correct and accepts that this report may be subject to independent verification. WMC Resources remains committed to

reducing greenhouse gas emissions and will continue to seek opportunities for further reductions.WMC Resources shall alsocontinue to promote its Greenhouse Challenge commitment to suppliers and customers and endeavour to encourage them to

adopt similar measures.

For and behalf of WMC Resources

Chief Executive Officer20 August 2004


I N T R O D U C T I O N

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ANNUAL PROGRESS REPORT ON THE THE GREENHOUSE CHALLENGE PROGRAM

C O N T E N T S

Introduction / Contents 2

1.0 Overview 3

1.1 Executive Summary 3

1.2 Performance Summary 4

1.3 Organisation Profile 4

2.0 Core Inventory 5

2.1 Total Greenhouse Gas Emissions 5

2.2 Greenhouse Gas Emissions for Multiple Sites 5

2.3 Greenhouse Gas Emissions- Fuel/Process 6

2.4 Key Performance Indicators 7

3.0 Forecast Emissions 8

4.0 Sequestration 8

5.0 Action Plan Progress 9

5.1 Actions completed 9

5.2 Previously identified actions in progress 10

5.3 Major actions deferred 10

5.4 Actions deleted 11

5.5 New Actions Identified Since Last Report 11

5.5.1 New Actions Completed 11

5.5.2 New Actions in Progress or Yet to be Started 11

5.6 Optional Reporting of Influence /International Actions for 2003 12

6.0 Public Statement 12

Appendix A – Historic Action Plan 13

This progress report is submitted in accordancewith our obligations as a member of theGreenhouse Challenge. The report represents

aggregated data for the Australian operationscontrolled by WMC Resources. This progress reportcovers the calendar year 2003.

The actions undertaken by WMC Resources in 2003have resulted in new annual greenhouse gas emissionabatement of 19.1 thousand tonnes of CO2 equivalentemissions in 2003 or increasing to 20.0 thousandtonnes of CO2 equivalent emissions, after each actionhas operated for a full 12-month period. As a result ofthese actions and other changes, our total emissionsfor 2003 were 2,941 thousand tonnes of CO2equivalent, which was a decrease of 21.3 thousandtonnes or 0.7% on emissions in 2002. The totalaccumulated abatement in 2003 from all actionscompleted by WMC Resources since 1996 was 1,095thousand tonnes of CO2 equivalent emissions.

Of the 119 quantitative initiatives identified by WMCResources under the Greenhouse Challenge program,82% have been undertaken, 13% dropped or mergedand 5% are still outstanding. This includes four newactions included in this report, with one beingcompleted during the reporting period. In addition, 17 proposed new actions have been identified andmay be included in future reports when fully evaluated.

Our forecasts with actions for the next two years are3,141 thousand tonnes of CO2 equivalent emissionsfor the reporting year 2004 and 3,270 thousandtonnes of CO2 equivalent emissions for the reportingyear 2005. These increases are due to expandedproduction at a number of operations.

For the purposes of reporting, WMC Resources hasemployed the methodologies supplied by AustralianGreenhouse Office to calculate greenhouse gasemissions. Supporting documentation is available tosubstantiate the information provided.

There were no significant changes to the scope of thisreport compared to that reported for 2002.


1 . 0 O V E R V I E W

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1 . 1 E X E C U T I V E S U M M A R Y



1 . 2 P E R F O R M A N C E S U M M A R Y

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Factor Details Approximate Impact (kilotonnes of CO2-e)

Measurement • Minor changes in emission factors for specific emission < 0.1Methodology sources (e.g. change from diesel for mobile use to

diesel for stationary use for applicable emission sources).

Business Activity • The continued ramping up of production at the 40Queensland Fertilizer Operation increased overall emissions for WMC. The performance index (emissions per unit fertilizer) at QFO reduced by 5%.

• Reduction in production at Olympic Dam Operations - 33from furnace maintenance requirements. The performance index (emissions per unit ore treated) at ODO increased by 3%.

• Improved efficiency (35% reduction per unit ore - 11.5treated) at Kambalda Nickel Concentrator reduced emissions despite a 17% increase in throughput.

Action Plans • Operation of a new waste heat boiler at KNS - 17.5(completed action in 2003).

The greenhouse gas emissions for WMC Resources in 2003 decreased by 21.3 thousand tonnes of CO2 equivalentcompared to the year 2002. This can be attributed to several factors, which are:

Name of Member WMC Resources ABN 76 004 184 598

Other name / brand name N/A

Contact Telephone 03 9685 6000

Contact Facsimile 03 9686 3569

Web Address www.wmc.com

Location of Headquarters Melbourne Victoria 3006

Member Since 1997 Using Member Logo Yes

CEO Andrew Michelmore Chief Executive OfficerPhone: 03 9685 6000 Fax: 03 9686 3569

Challenge Contact Ian Clark GM Planning & [email protected] Phone: 08 9479 0596 Fax: 08 9479 0564

Postal Address PO Box 91Belmont WA 6984

Street Address 191 Great Eastern Highway Belmont WA 6104

1 . 3 O R G A N I S A T I O N P R O F I L E

mailto:[email protected]

The principal greenhouse gas emitted is carbon dioxide. Total greenhouse gas emissions are equivalent to 2,941 thousand tonnes of CO2 equivalent in 2003.The greenhouse gas emission inventory is dominated by the use of purchased electricity (51%) and liquid fuels(39%), with the uncertainty of these emission sources likely to up to ±5%, and an overall uncertainty of the grouptotal of between ±3% to ±5% (around ±100 thousand tonnes of CO2 equivalent). The various tables within thisreport quantify the emissions and abatement by greenhouse gas, operation and emission category to the nearesttonne. This provides a relative comparison for all sources, but does not reflect the accuracy of the data.


2 . 0 C O R E I N V E N T O R Y

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2 . 1 T O T A L G R E E N H O U S E G A S E M I S S I O N S

Gas Emissions GWP (Tonnes) Emissions (CO2-e Tonne)

Full Fuel Cyclea CO2-e 2,828,760 1 2,828,760

Carbon Dioxide CO2 26,827 1 26,827

Methane CH4 4,067 21 85,400

Nitrous Oxideb N2O - 310

Hydrofluorocarbonb HFC - *

Perfluorocarbonb PFC - *

Sulphur hexafluorideb SF6 - 23,900

Total: 2,940,987

a Emissions from fuels and purchased electricity evaluated from full fuel cycle emission factors.b Emissions from N2O, HFC, PFC and SF6 are not reported and assumed to be negligible.

2 . 2 G R E E N H O U S E G A S E M I S S I O N S F O R M U L T I P L E S I T E S

Operation Emissions (CO2-e Tonne)

Olympic Dam Operations 1,042,557

Queensland Fertilizer 680,698

Mount Keith Operation 371,593

Kwinana Nickel Refinery 332,268

Kalgoorlie Nickel Smelter 299,619

Leinster Nickel Operations 173,678

Kambalda Nickel Operations 30,921

Hi Fert 3,670

Offices 5,943

Exploration Australia 40

Total: 2,940,987

Fuels / Process Units Consumption Conversion Factor Emissions(CO2-e Tonne / Unit) (CO2-e Tonne)

Electricity (Purchased) MWh 1,636,506 Various 1,499,425

Natural Gas GJ 4,827,987 Various 302,990

Natural Gas (Generation) GJ 2,076,438 Various 138,083

Natural Gas (Feedstock) GJ 6,236,933 Various 413,032

Diesel (Stationary) Kilolitre 4,295 2.995 12,864

Diesel (Mobile) Kilolitre 16,162 3.015 48,723

Diesel (Mobile) Kilolitre 14,463 3.015 43,600

Diesel Low Sulphur (Mobile by Contractor) Kilolitre 34,313 3.015 103,443

Diesel (Product Transport) Kilolitre 1,809 3.015 5,452

Diesel Low Sulphur (Product Transport) Kilolitre 14,811 3.015 44,651

Aviation Gasoline Kilolitre 1 2.555 3

Petrol Kilolitre 830 2.746 2,280

LPG (Stationary) Kilolitre 55 1.724

LPG (Stationary) Tonne 13,978 3.328

LPG (Mobile) Kilolitre 392 1.753 687

Kerosene Kilolitre 8 2.833 23

Jet Fuel Kilolitre 71 2.874 204

Fuel Oil Tonne 7,418 3.491

Fuel Oil Kilolitre 9,617 3.325

Coke Tonne 30,761 3.537 108,802

Net Direct CO2 Tonne 23,598 1 23,598

Direct Methane Tonne 4,067 21 85,400

Anfo Tonne 4,296 0.164 703

Emulsion Tonne 12,892 0.166 2,139

Soda Ash Tonne 933 0.415 387

Total: 2,940,987

Emissions from "Net Direct CO2" include the sale of 9,488 tonnes of CO2 obtained from the reforming of naturalgas at KNR.


2 . 3 G R E E N H O U S E G A S E M I S S I O N S - F U E L / P R O C E S S

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The primary source of greenhouse gas emissions for this report is electricity, which includes both purchased andself generated. The total net emissions for WMC Resources are equivalent to 2,941 thousand tonnes of CO2equivalent in 2003.

46,616

57,881

Diesel usage has been subdivided as:

• Diesel (Mobile) is diesel used by WMC staff for haulage and mining activities where the use of low sulphurdiesel could not be confirmed.

• Diesel Low Sulphur (Mobile) is low sulphur diesel used for haulage and mining activities by WMC staff.

• Diesel (Stationary) is diesel used for stationary sources such as industrial heating within Australia including WA.

• Diesel Low Sulphur (Mobile by Contractors) is low sulphur diesel used for haulage and mining activities bycontractors.

• Diesel (Product Transport) is diesel used for product transport by contracted operations including public railwithin Australia. Product transport refers to the transport of output product from the operations to the main portor distribution centre. Product transport also includes the transport of sulphur and sulphuric acid betweenoperations.

• Diesel Low Sulphur (Product Transport) is low sulphur diesel used for product transport by contracted operationsincluding public rail.

In 2001 WMC began evaluating the likely emissions that result from the transport of product from the appropriatemain port or distribution centre to the end client where WMC is responsible for the transport. These emissions wereevaluated from assumed energy usage rates and product tonnages and distances. This included the transport offertilizer from Townsville to locations within Australia and overseas and nickel, copper and uranium to variousoverseas ports. For 2003 the total emissions were evaluated as an additional 113 thousand tonnes of CO2equivalent. This is not included in the WMC inventory.

The 2003 inventory has used emission factors detailed in the "AGO Factors and Methods Workbook Version 3 -March 2003". WMC Resources has retained the use of full fuel cycle emission factors for electricity and all fuelsincluding natural gas.



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2 . 3 G R E E N H O U S E G A S E M I S S I O N S - F U E L / P R O C E S S C O N T I N U E D . . .

2 . 4 K E Y P E R F O R M A N C E I N D I C A T O R S

The agreed key performance indicator used for the purposes of this report by WMC Resources is Total Emissionsper tonne of Ore Treated. On this basis, the net greenhouse gas emission index for WMC Resources for the yearhas not changed in 2003, remaining at 117 kg CO2-e/tonne ore treated.


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WMC’s operations and exploration activities require the clearing of land. Through careful planning we minimisethe land area affected. Disturbed land is rehabilitated once the need for access ends. During 2003 we disturbed170 hectares and rehabilitated 32 hectares. The net balance of disturbed land at the end of the reporting periodwas 8,590 hectares. WMC also holds 3.2 million hectares under pastoral leases. The resulting greenhouse gasemissions from this land management have not been quantified.

4 . 0 S E Q U E S T R A T I O N

Year Forecast (No Actions) Forecast (With Actions) Measurement & Calculation (kilotonnes CO2-e) (kilotonnes CO2-e) Methodology Used

2004 4,302 3,141 Factors and Methodologies – Greenhouse Challenge Publication 2002

2005 4,591 3,270 Factors and Methodologies – Greenhouse Challenge Publication 2002

Note: "No Actions" is the business as usual case evaluated from the historical inventory and the estimated impact of all actions.

3 . 0 F O R E C A S T E M I S S I O N S



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One previously identified action was completed by WMC Resources during 2003 resulting in actual greenhousegas abatement totalling 17.47 thousand tonnes of CO2 equivalent, with the same savings for a full year. The actionis detailed in the table below.

Action Id Completion Date Full Year Savings Actual 2002 Savings(CO2-e Tonnes) (CO2-e Tonnes)

Gas turbine heat recovery & KNS 1o Jan 03 17,470 17,470replacement of package boiler

All actions completed by WMC Resources since 1996 have resulted in actual greenhouse gas abatement totalling1,095 thousand tonnes of CO2 equivalent in 2003. All completed actions including one new action have beenaggregated under action plan categories and are listed in the following tables.

5 . 0 A C T I O N P L A N P R O G R E S S

Greenhouse Challenge Action Type Count Full Year Saving1

2003 Saving2

(CO2-e Tonne) (CO2-e Tonne)

Boiler Upgrade / Optimisation 1 2,517 1,678

Cogeneration 3 224 224

Compressed air management3 - - -

Fuel switching 18 436,383 436,383

Heating ventilation and air conditioning 1 98 98

Lighting upgrades 1 103 103

Process gas mitigation 1 1,673 1,673

Transport strategy actions 1 8,572 8,572

Variable speed drive 2 2,549 2,449

Other – Procedural 1 419 419

Other - Production Optimisation 5 449,360 449,360

Other - Energy Use Reduction 30 90,670 90,540

Other - Process Change 14 34,162 32,279

Other – Waste Heat 2 72,518 71,018

Notes:

1 Full Year Saving is the estimated abatement in 2003 for historic actions and in 2004 for actions completed during 2003.

2 2003 Savings is the estimated abatement in 2003 for historic actions completed in 2003.

3 In 2002 an action was reported with estimated abatement of 167 tonnes CO2-e. Savings have not been sustained and this action hasbeen excluded from the list of completed actions with further progress expected in 2005. Refer to Appendix A for a revised list of annual abatement from new actions for the period 1998 to 2002.

5 . 1 A C T I O N S C O M P L E T E D


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Greenhouse Challenge Action Type Count Full Year Saving(CO2-e Tonne)

Compressed air management 1 741

Other - Production Optimisation* 1 ≈ 20,000

Other - Process Change 2 18,872

* For one action at ODO the annual savings vary and have been assumed to be 20,000 CO2-e tonnes

5 . 2 P R E V I O U S L Y I D E N T I F I E D A C T I O N S I N P R O G R E S S

The table below details actions that have not been completed as originally schedules or in two cases the action wascompleted and included as a completed action above, however the abatement has not been confirmed.

5 . 3 M A J O R A C T I O N S D E F E R R E D

Action & Comment Id Previous New EstimatedEstimated Estimated Full Year Savings

Completion Date Completion Date (CO2-e Tonnes)

MKO – Internal drainage of TSF and MKO-1h Sep-01 Completed 2002 172reduced water pumping.1 (to be confirmed)

LNO – Grinding Improved Efficiency 2 LNO-1d Dec-99 Completed 2002 773(to be confirmed)

KNS – Coarse sand trial KNS-1p Dec-01 Dec-04 2,443No progress during the year, project on hold and may be dropped.

KNO – Improve Efficiency of KNO-1k Dec-01 Dec-04 2,443Plant Air Compressors3

ODO – 2001 Expansion – The impact ODO-3m Jan-02 Jan-04 Up to 116,000of the expansion works have been further delayed due to furnace maintenance issues and rescheduling.4

Nickel Powder Desulphurisation KNR-1l 2004 Unknown 16,107Action deferred indefinitely

Notes:1 Action MKO-1h was reported as initially complete in 2002 with savings of 57 tonne CO2-e in 2002. Further work in 2003 has increased

the abatement in 2003 by 98 tonne, with an additional increase in abatement of 17 tonne CO2-e expected in 2004 when work will nowbe complete.

2 Action LNO-1d was completed at the end of 2002, but savings have not yet been confirmed or included in the reported abatement.3 Action KNO-1k was reported as complete in 2002, savings were not achieved due to changes in production.

The action has been removed from the list of completed actions. Further work is expected to achieve abatement by the end of 2004.4 Action ODO-3m the original savings estimate of 116 kilotonne has been revised and included in current projections as a variable saving

of around 20 kilotonne. The estimation model is dependent on various intermediate products including slag and will be tracked andreported against a baseline.



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Action Id Reason for deletion

KNS – Fuel conversion, . KNS-1h This project has been dropped as unviable.coal to reaction shaft

5 . 4 A C T I O N S D E L E T E D

Action Id Completion Full Year Savings Actual 2002 Savings Date (CO2-e Tonnes) (CO2-e Tonnes)

Efficiency of #2 Superheater KNS 1s Apr 03 2,517 1,678Improve combustion trim control. Reduction in natural gas consumption.

5 . 5 N E W A C T I O N S I D E N T I F I E D S I N C E L A S T R E P O R T

5 . 5 . 1 N E W A C T I O N S C O M P L E T E D

Action Id Completion Actual 2002 Savings Date (CO2-e Tonnes)

Cover Ore Pile MKO-1j Oct-2004 51A cover is to be built to enclose part of the ore stockpile.This is expected to reduce dust emissions and reduce/eliminate water usage for dust suppression (and hence energy associated with water consumption).

VSD on Southern Vent Shaft LNO-1o Jan-2004 122Due to increased depth of underground operation it was necessary to upgrade the ventilation capacity. The existing 2 fans will be supplemented with an additional fan. In order to better manage part load operation it was decided to install VSD control on the new fan.

Leach Agitation Stage 1 & 2 KNR-1o Mar-2004 To be evaluatedDuring stage 1 (in 2003) the leach agitators within one autoclave were replaced. All Leach autoclaves cells will be fitted with the more efficient agitators during 2004.

TOTAL: 173

5 . 5 . 2 N E W A C T I O N S I N P R O G R E S S O R Y E T T O B E S T A R T E D

Management and cultural change related to greenhouse action √

Inclusion of greenhouse information in the organisation's newsletters. √

Staff awareness programs.

Staff appointment to monitor report and promote Greenhouse Challenge activities. √

Receipt of awards (such as regional, national or international recognition awards)

International/emissions trading actions

Involvement in CDM (Clean Development Mechanism) activities.

Involvement in JI (Joint Implementation) activities.

Participation in Emissions Trading activities


5 . 6 O P T I O N A L R E P O R T I N G O F I N F L U E N C E / I N T E R N AT I O N A L A C T I O N S F O R 2 0 0 3

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WMC Resources underwent a de-merger during 2001forming two independent companies. This agreementapplies to the operations included in the new company"WMC Resources".

Overall greenhouse gas emissions for WMC Resources’Australian operations were estimated to be 2,941thousand tonnes of CO2 equivalent for the calendaryear 2003. The 2003 inventory decreased by 0.7%over the 2002 inventory due to a decrease inproduction at Olympic Dam Operations, improvementsin performance at Kambalda Nickel Concentrator andthe Queensland Fertilizer Operation (QFO).

Of the 119 quantitative initiatives identified by WMCResources under the Greenhouse Challenge program,82% have been undertaken, 13% dropped or mergedand 5% are still outstanding. This includes four newactions included in this report, with one beingcompleted during the reporting period. In addition, 17 proposed new actions have been identified andmay be included in future reports when fully evaluated.Actions completed in 2003 will provide nearly 20thousand tonnes CO2-e abatement with actionscompleted to date by the current WMC Resources’operations abating 1,095 thousand tonnes of CO2equivalent during 2003.

Emission intensity in 2003 was 117 CO2 equivalenttonnes per tonne ore treated. This steady performancecompared to 2002 occurred despite the increasinginfluence of QFO, which due to the different nature ofthe operation has comparatively high emissions pertonne ore treated. Performance at Olympic Dam(ODO) decreased due to maintenance issues with thefurnace in 2003. These two operations represent 59%of the 2003 inventory. QFO emissions have reducedfrom 1,218 CO2 equivalent kg per tonne fertilizer in2000 to 738 CO2 equivalent kg per tonne fertilizer in2003.

Our forecasts with actions for the next two years are3.13 CO2 equivalent million tonnes for the reportingyear 2004 and 3.26 CO2 equivalent million tonnes forthe reporting year 2005. Emissions without actionswould be expected to be over 4.28 CO2 equivalentmillion tonnes for 2004 and 4.56 CO2 equivalentmillion tonnes for 2005.

6 . 0 P U B L I C S T A T E M E N T

At the Greenhouse Challenge Office’s request areview has been undertaken to update andreport the historical action plan in terms of the

actions completed by year between 1998 and 2002.

The actions completed for each year are shown in thetables below. The only the action types applicable toeach year are shown. As per the previous abatementtables, the Reporting Year Saving is the abatement inthe reporting period in which the action wascompleted. The Full Year Saving is the abatementexpected over an initial full 12-month period and wasusually evaluated from the abatement expected in thefollowing reporting period.

The abatement reported in 2003 for some actions isgreater than that originally evaluated. The total for theFull Year Savings (12-month) abatement from theactions for the currently owned operations as detailedbelow is 901 thousand tonne CO2-e. These sameactions are estimated to abate 1,095 thousand tonnein 2003. This increase in abatement results from

actions that are dependent on production throughput,or provide an ongoing improvement in performance.The two action types that are dependent on productionare:

• reduction in emission factors for electricity use fromnew on-site generation; and

• ongoing improvements in efficiency through debottle-necking or increase throughput.

In 2001 WMC Resources sold its interests in itsoperations, including, Agnew Gold, St Ives Gold andCentral Norseman Gold Corporation. The actionscompleted for these operations are included, butidentified separately.


A P P E N D I X A – H I S T O R I C A C T I O N P L A N

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Actions Completed in 2003

Greenhouse Challenge Action Type Count Full Year Saving 2003 Saving(CO2-e Tonne) (CO2-e Tonne)

Boiler upgrade / optimisation 1 2,517 1,678

Other - Waste Heat 1 17,470 17,470



Lighting upgrades 1 103 103


Other - Process Change 2 357 108



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Other - Procedural 1 419 150


Other - Energy Use Reduction 1 724 448






Other - Energy Use Reduction 1 2,815 459


Other - Process Change (Sold Sites) 3 35,829 12,890



Compressed air management (Sold Site) 1 330 330

Fuel switching 2 12,059 9,110

Fuel switching (Sold Site) 1 161 71

Transport strategy actions 1 8,358 3,513

Variable speed drive 2 880 22



Other - Energy Use Reduction (Sold Sites) 2 347 279

Other - Process Change 1 9,869 0

Other - Process Change (Sold Sites) 1 520 310

Other - Waste Heat 1 16,256 0



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Fuel switching 4 10,230 12,777

Heating ventilation and air conditioning 1 98 8

Process gas mitigation 1



Other - Energy Use Reduction (Sold Sites) 1 5


Other - Process Change (Sold Sites) 1 13 3

Actions Completed prior to 1998

Actions Completed prior to 1998



Fuel switching 12 351,262 351,262

Fuel switching (Sold Sites) 2 51,271 51,271

Lighting upgrades (Sold Sites) 1 1 1

Variable speed drive (Sold Sites) 1 651 651



Other - Energy Use Reduction (Sold Sites) 3 952 952


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Greenhouse Challenge Program - 2003