Mittal Steel believes that our businesses should play a major role in supporting the communities in which they operate.
Environment
Preparations for the start of the European Union’s carbon emissions trading scheme were a major focus of attention in 2004. The scheme, designed to limit carbon emissions by heavy industry and ensure Europe meets its Kyoto Agreement target
of an 8 per cent cut in carbon dioxide emissions by 2012, came into force in January 2005. Mittal Steel worked closely with a number of EU governments and industry bodies in advance of that date in helping prepare the national allocation plans for carbon emissions which form basis of the trading scheme. This involved collecting not only current but historic data back to 1990, which is the reference starting point for
the Kyoto Agreement. Mittal Steel will take appropriate steps in this respect.
In 2004, the Group invested approximately $80 million in environmental projects around the world – much of it in Central and Eastern Europe (CEE), Kazakhstan and South Africa.
Mittal Steel’s substantial capital investment programme in the CEE is set to play a constructive role in ensuring environmental efficiency and reducing pollution in the years ahead. In Poland, for instance, the installation of a continuous caster, a new coke oven battery and a new, state-of-the-art hot strip mill over the course of 2005 and 2006 will capture huge environmental efficiencies while at the same time lifting production, productivity and product quality.
In drawing up its investment plans, Mittal Steel has been careful to ensure that all capital spending is in compliance with the requirements of the Industrial Pollution Prevention and Control Directive – even though some EU accession countries, such
as Poland and the Czech Republic, have still to implement it in their own legislation.
Under the IPPC, all relevant installations are required to obtain a permit to operate. That permit is based on the concept of ‘best available techniques’. Each investment project to which the Group is committed in Europe is in compliance with the directive.
That includes projects underway in Romania, which is expected to join the EU in 2008. Mittal Steel is committed to a $76 million programme of environmental projects at Mittal Steel Galati under the privatisation agreement with the Romanian government. The five-year programme is due to be completed by end of 2006. The programme involves the reduction of pollution to soil, subsoil and underground water; the cleaning of wastewater discharges; improvements to the quality of air emissions and imissions; waste management and other issues.
In 2004, $10.6 million was spent on environmental projects at Mittal Steel Galati, bringing the total invested in this area over the past three years to approximately $30 million. Among the projects completed during the year were the modernisation
of the cold rolling mill pickling line No 2 and a number of dust control, soil and water treatment projects.
In the Czech Republic, Mittal Steel Ostrava spent more than CZK 130 million on environmental projects in 2004. They included a soil and ground water protection scheme, which was completed during the year, and a project for improving wastewater quality.
In Kazakhstan, the installation of the first of two twin-strand continuous casters
was completed at Mittal Steel Temirtau, bringing substantial environmental and efficiency gains compared with the old ingot casters. Other projects at Temirtau included construction of a modern, efficient coke oven battery.
In South Africa, environmental sustainability is viewed as a core business imperative and all of Mittal Steel South Africa’s operations have achieved ISO 14001 environmental management certification. A number of major projects are currently underway.
One of the biggest is a $37 million project to achieve zero effluent discharge from
the Vanderbijlpark steel plant by upgrading the existing central effluent treatment
plant, constructing a main treatment plant and various dams. The project, which will
also reduce water consumption by at least 30 per cent, commenced in 2004 and is due to complete by December 2005.
Several new projects are underway in the current year. In January 2005, Mittal Steel South Africa commenced work on a $52 million coke plant gas-cleaning project – which will improve efficiency while halving emissions of coke plant by-products. The target date for completion is October 2006. A new sinter plant off-gas system, designed to reduce emissions from the main stack at Vanderbijlpark by at least 80 per cent, is expected to be commissioned in December 2007. The company is also engaged in a $75 million coke oven rebuild project due to complete in September 2006.
The rehabilitation of the downscaled Pretoria Works continues. The demolition of the plant and buildings that have been permanently closed is on schedule and large volumes of potentially hazardous material have been securely managed without any environmental impact. An environmental master plant, commissioned to address the long-term prospects for the site, has been completed and is currently being reviewed before negotiations with the relevant stakeholders.
Since 1993, Mittal Steel South Africa has operated a recycling scheme for beverage
and other cans, acting jointly with Nampak. The scheme, called Collect-a-Can has recovered more than 530,000 tons of used steel beverage cans and 400,000 tons of tin-bearing scrap in the past 11 years for recycling, and more than 37,000 people are involved in the sale of cans to Collect-a-Can. In 2004, the scheme was selected as one of three South African case studies by the World Business Council for Sustainable Development for its contribution to sustainable livelihoods.
Health and safety
In 2004, Mittal Steel adopted a new health and safety doctrine and a set of tools
and processes aimed at standardising work on improving safety throughout the Group. The new code, developed following the 2004 company-wide Health and Safety Knowledge Management Programme (KMP) meeting held in Galati, Romania, builds on a number of uniform procedures introduced the previous year and is designed to bring all business units up to the standards of the best.
The Group operates uniform reporting guidelines for accidents and monitors its safety performance according to the total injury frequency rate. It works with the world steel industry body, International Iron and Steel Institute (IISI), to benchmark performance. Over the past three years, the total injury frequency rate has been reduced by 8 per cent. In 2004, total injuries rose in two areas: North America (where the injury rate rose 8 per cent) and South Africa (where it rose 26 per cent). There was an 8 per cent fall in total injuries in Western Europe and a 40 per cent fall
in all other operations worldwide.
Sadly despite this overall reduction two major incidents occurred in 2004, one at the Shakhtinskaya coal mine in Kazakhstan and the other at Vanderbijlpark in South Africa. Investigations were launched into both incidents and long-term support programmes put in place for the bereaved families.
Mittal Steel does not accept that workplace injuries of any kind are acceptable or inevitable. The new doctrine makes it plain that all accidents are preventable and that
a zero injury workplace is possible. It encourages employees to report all accidents as a means of understanding the causes of injuries and developing countermeasures. It places great emphasis on training and housekeeping. And it lays down the role of senior management in communicating expectations and
tracking results.
The purpose of the doctrine is to instill a culture within Mittal Steel in which the issue of safety performance is as central to every business review meeting as all the other measures by which success is judged – quality, productivity, reliability and profitability.
Work on improving workplace safety is conducted through a network of health
and safety professionals who meet annually as part of the KMP to exchange and develop ideas and make regular contact thereafter by way of company-wide conference calls to drive new initiatives forward. They also communicate through a dedicated health and safety e-room in which details of accidents and related data are logged so that they can be shared among the Group’s health and safety teams. All participants and their business units are held responsible for carrying through the ideas developed at the KMP meetings.
The key to a consistent reduction in injuries is to standardise safety procedures as much as possible across all business units. This is the core of the work undertaken in the past two years. In 2004, the KMP meeting identified 32 ideas for improving safety performance. Some will take time to develop. But a number have already been put into effect.
A standard audit form has been developed. It is now being used by every business unit to track safety performance and the unit’s compliance with a set of core safety activities which every unit is required to perform. Compliance can now be tracked automatically throughout the Group. Most importantly, a standard of excellent housekeeping has been set down together with a number of measuring point ‘characteristics’.
Excellent housekeeping is seen as the cornerstone of a safe, orderly, efficient, quality business and is central to accident prevention. It has now been defined and formatted in an inspection checklist that sets the expectations for excellent housekeeping across all companies. With a standardised definition of what constitutes excellence in this area there can be no room for argument over best practice. The new inspection checklist has already made a significant contribution
to an improved safety environment.
To build on the momentum of the annual KMP meetings, health and safety professionals in the business units have stepped up the frequency of their regular conference calls from once a quarter to once a month. The move is recognition that Continuous Improvement in the safety area requires a disciplined approach to the development of safety initiatives and related information sharing.
Serving our communities
Mittal Steel companies have long played a role in supporting the communities in which they operate. They have undertaken a wide variety of projects, ranging from the construction of a church in Romania to flood relief in Algeria. In Kazakhstan, Mittal Steel Temirtau runs a number of essential civic services, such as electricity generation and tramways. Throughout the Group, employees are encouraged to involve themselves in charitable and community enhancement projects that are frequently supported by corporate donations.
In several of the countries in which it operates, Mittal Steel is the largest foreign investor. It recognises the responsibilities that entails. In recent years, it has engaged in an increasing number of healthcare and educational projects.
In 2004, Mittal Steel undertook a review of its work in the community. It concluded that while locally-led initiatives had been highly productive, there was a strong case for a global programme that was centrally directed and co-ordinated. That programme will be put in place in the course of 2005. Its emphasis will be on education, a reflection of the importance attached to learning within the Group itself.
The following gives a flavour of the projects undertaken in 2004:
Education
Mittal Steel South Africa provided comprehensive educational support in 2004. Among the many projects it sponsored was the Science Olympiad, a countrywide competition involving 10,000 children designed to stimulate interest in science
and technology among young learners. The Company’s sponsorship allowed more schools to participate.
In Kazakhstan, Mittal Steel Temirtau constructed new facilities for the Karaganda Metallurgical Institute.
In the United States, Ispat Inland provided scholarships to sons and daughters of employees and retirees. The Company is also supporting a student housing project
at Purdue University Calumet with a significant commitment over five years.
Mittal Steel Hamburg also provided support of further education.
Healthcare
In Kazakhstan, Mittal Steel Temirtau maintained three health centres, a children’s centre and dental facilities.
In Romania, Mittal Steel Galati maintained a health centre and provided support for the seriously ill. Mittal Steel Roman provides significant medical services for employees.
Mittal Steel South Africa introduced a peer educator programme as part of its ongoing HIV/AIDS strategy which focuses on HIV status awareness, education and the prevention of infection through behaviour change. The strategy will be extended with the launch of a major HIV/AIDS employee support programme in 2005.
Cultural events
Mittal Steel Poland has an agreement to provide community support in five Polish cities. The highlight in 2004 was sponsorship of the second annual Sacrum-Profanum Festival in Krakow, which culminated in three spectacular performances of Mozart’s Requiem by the choir and orchestra of the Krakow Philharmonic in the Krakow rolling mill bay. A total of 8,500 people attended. The Company also supported a variety
of other events – including an international folklore festival in Sosnowiec and the International Week of Partner Cities in Swietochlowice.
In the Czech Republic, Mittal Steel Ostrava provided sponsorship for the Janáčkova Philharmonic and two music festivals.
Sport
Together with the Trinidad-based Mittal Steel Point Lisas, the Group sponsored the
West Indies cricket team which triumphed in the ICC Champions Trophy held in England in September. Mittal Steel’s connection with West Indies cricket goes back to 1994 when it sponsored the side’s tour of the Indian sub-continent.
Mittal Steel Temirtau constructed a new sports complex.
Mittal Steel companies in the Czech Republic, Romania and Kazakhstan provided sponsorship and other support for local football, handball, basketball or cycling clubs.
Other activities
At Ispat Inland, employee collections together with a corporate contribution provided a substantial donation to the United Ways of Northwest Indiana.
Employees participated in a host of other fundraising events and a number donated their Martin Luther King holiday to perform services for local agencies.
Mittal Canada contributed to various charitable organisations where employees volunteered their time, and participated in fund raising activities for United Way.
It also supplied steel free of charge to help the City of Contrecoeur build a boardwalk on the St Lawrence River.
In Mexico, Mittal Steel Lazaro Cardenas donated construction material for local churches and the Technological Institute of Lazaro Cardenas. The Company is also a corporate sponsor of the Mexican Counsel of Foreign Affairs.
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