RU

INTEGRATED REPORT 2016

Environmental Protection

Responsibility for preservation of the environment is an integral part of Uralkali’s business. The Company’s investments in environmental protection in 2016 increased by 53% to 2.230 billion roubles. In addition to current expenditures associated with protecting the atmosphere, water and land resources, Uralkali is investing in the modernisation of existing machinery and the installation of new pollution control equipment, staff training, and the development of internal monitoring and control systems, as well as scientific research.

OUR APPROACH

Uralkali focuses on measures to minimise the negative environmental impact of its activities. Responsibility for preserving the environment is an integral part of doing business.

The Company fully adheres to the requirements of environmental legislation, uses natural resources responsibly, and constantly introduces new environmental protection measures.

WHY THESE ISSUES ARE IMPORTANT TO US

Environmental protection implies a set of measures taken to prevent the negative impact of the Company’s operations on the environment, which creates favourable and safe conditions for human life.

KEY PRIORITIES

  • Reduction of waste discharges into bodies of water, balanced water usage
  • Efficient waste management
  • Reduction of air emissions
  • Energy conservation

STAKEHOLDERS ENGAGED

  • Employees
  • Trade unions
  • Government and local authorities
  • Local communities

Key facts in 2016

In 2016, Uralkali and its subsidiaries and affiliates in the Russian Federation invested over 2.230 billion roubles in environmental activities, which is 53% more than in 2015 (1.457 billion roubles).

In addition to current expenditures associated with protecting the atmosphere, water and land resources, Uralkali financed the modernisation of existing machinery and the installation of new pollution control equipment, staff training, and the development of internal monitoring and control systems, as well as scientific research. Great importance in the environmental management system is attached to the development and implementation of waste management activities, monitoring the environment, upgrading our equipment to reduce its negative impact, and industrial environmental monitoring programmes.

In 2016, the main areas of Uralkali’s activities were:

  • geological safety
  • energy efficiency and minimising our climate impact
  • protection of the atmosphere
  • protection of water resources
  • waste management

Uralkali thoroughly assesses the environmental impact of planned and ongoing production activities.

The Company strictly complies with the requirements of environmental legislation and internal environmental standards, constantly assessing environmental risks and ensuring the transparency and openness of its operations. Uralkali’s efforts to ensure environmental safety are carried out in accordance with the environmental legislation of the Russian Federation, comply with environmental standards and rules, and take into account the requirements of Russian regulations and international standards.

Geological safety

The Company mines minerals at the Verkhnekamskoye deposit on the basis of technical specifications developed in accordance with applicable regulations and subject to examination and approval as prescribed by the legislation of the Russian Federation.

The main condition for the development of the Verkhnekamskoye deposit is safe mining and preservation of the functional state of the undermined areas.

In compliance with legal requirements, the Company applies mining protection measures in the mined-out areas of mines where it is technically possible.

In the event of any restrictions in the use of mining protection measures, Uralkali takes advantage of its own complex monitoring system to identify potentially hazardous sections in a timely manner and to ensure protection for the local population.

The Company surveys and carries out visual monitoring for subsidence, conducts geophysical and hydrogeological research in all of its mines, and monitors seismic activity.

The frequency of monitoring is determined for each facility individually, and is in full compliance with all applicable safety requirements.

Uralkali cooperates closely with R&D institutes to perform in-depth studies into the environmental impact of its operations in the region where it operates.

Energy and climate

Energy efficiency

Following an energy audit, the Company approved an Energy Saving Programme on 29 December 2012 that includes a set of organisational and technical measures aimed at reducing energy consumption. The programme started with the establishment of an energy conservation commission and the development of an incentive scheme. Investment projects with expected completion dates in 2017- 2018 were initiated.

In 2016, no financing was allocated for energy saving technical measures. Only carry-over works were completed. The main focus was on the implementation of low-cost organisational measures.

Due to the lack of investment, the task for 2016 was to stay within the limited energy consumption budget. As evidenced by the results of 2016, this task was accomplished. However, no bonuses were paid to staff, as the bonus conditions were not met.

Uralkali continued to work on project documentation for previously initiated projects.

In 2016, the Company increased power generation using its own facilities. The actual amount of electricity generated increased by 27% compared to 2015 and totalled 352.4 million kWh.

In 2016, Uralkali, its subsidiaries and affiliates in the Russian Federation conserved 945 MWh of electricity, 6,715 tonnes of oil equivalent and 1.755 million m3 of water.

Use of associated petroleum gas

As part of the Energy Saving Programme, the Company uses associated petroleum gas, which it purchases from oil and gas companies of the Perm region. This approach makes it possible not only to reduce natural gas consumption and lower costs, but also to prevent the flaring of associated gas by oil companies, thus reducing global greenhouse gas emissions.

In 2016, the volume of associated gas used by Uralkali and its subsidiaries and affiliates in the Russian Federation totalled 130,000 tonnes of oil equivalent.

Greenhouse gas emissions

Greenhouse gases are not contaminants in the ordinary sense of the term. In the concentrations that are actually observed in the atmosphere, they do not have a direct harmful effect on human health or ecosystems. Therefore, only the absolute value of emissions for the year is subject to monitoring, rather than the concentration of a greenhouse gas around production facilities.

In recent years, the attitude towards the problem of climate change in the Russian Federation has been gradually improving; a regulatory framework regulating greenhouse gas emissions is being developed. The Company recognises that its operations are inextricably linked to energy consumption and result in greenhouse gas emissions.

Uralkali has been cooperating with the international Carbon Disclosure Project (CDP), the most authoritative source of data on global climate change, for five years already, providing information on our efforts to reduce greenhouse gas emissions.

In the reporting period, emissions of C02-equivalent gases across the Group amounted to 1.733 million tonnes, down 1.7% from 1.763 million tonnes in 2015 and down 6.4% from 1.852 million tonnes in 2014 due to a decrease in potash production and total energy consumption.

Atmospheric emissions

The Company’s enterprises have environmental protection departments which are responsible for emissions of pollutants into the atmosphere.

As part of the Company’s programme to expand its existing production facilities, Uralkali is upgrading its waste treatment equipment. As a result, the operational efficiency of treatment facilities is increasing, thus reducing the Company’s environmental impact.

In the reporting period, Uralkali’s pollutant emissions decreased by 12% year-on-year, to 5,120 tonnes from 5,750 tonnes, due to decreased consumption of fuel and reduced output. All atmospheric emissions from stationary sources are within the regulated limits.

Water resources

In 2016, total water intake for industrial needs and utility services at Uralkali and its subsidiaries and affiliates in the Russian Federation decreased by 1.4% to 18.39 million m3 from 18.65 million m3 in 2015. The water intake from surface sources totalled 14.2 million m3 (not including water intake for third parties).

The Company aims to reduce consumption of water for industrial needs and minimise the impact of wastewater disposal on the environment.

The increase in per-unit water consumption is associated with greater hydraulic filling volumes and the redistribution of volumes between flotation and halurgic production methods.

The volume of water recycled and reused at Uralkali totalled 103.302 million m3, down from 104.057 million m3 in 2015.

WATER INTAKE FOR INDUSTRIAL NEEDS
[m3 per tonne of production]

The highest level of production organisation and the use of advanced technologies enable Uralkali to successfully achieve its sustainable development goals. These include the efficient use of non-renewable resources and adherence to the highest environmental protection standards to minimise the environmental impact of the Company’s business

Uralkali has conducted special monitoring of the potentially dangerous area of the Solikamsk-2 mine since 5 January 1995, when an earthquake led to the destruction of pillars and the formation of a soil subsidence area about 4 meters deep and 950 meters by 750 meters across under the mined-out areas of northeastern panels 1&2 of the Solikamsk-2 mine. In order to minimise the consequences of the accident, the Company backfilled areas around the collapsed zone. Since 1995, the accident area has been subject to detailed comprehensive monitoring.

On 18 November 2014, Uralkali detected higher levels of brine inflow in the Solikamsk-2 mine and immediately implemented an emergency plan. All employees were evacuated from the mine.

On 18 November 2014, at around 16:00, a sinkhole with a diameter of approximately 30 meters-40 meters was discovered east of the Solikamsk-2 production site, outside the metropolitan area. The sinkhole is mainly associated with the area where the rocks and inter-bed pillars collapsed on 5 January 1995.The area around the sinkhole was immediately fenced off.

According to the Act of the technical investigation into the cause of the accident, the fresh water inflow into the worked-out areas of the Solikamsk-2 mine on 18 November 2014 was caused by the mass collapse of rock in the mine during the accident in 1995. Thus, the cause of the accident on 18 November 2014 at the Solikamsk-2 mine was an emergency that was unavoidable under the given circumstances.

As part of water protection activities in 2016, the Company bought juvenile pike from a fish farm in the Sherya Nytvensky district. In order to help juvenile fish adapt to an open reservoir, an optimal place of release was chosen taking into account the food resources in the water body, water and air temperature, as well as the distance for the fish to travel in the container. Compliance with all these factors was closely monitored by the staff of the State Research Institute for Lake and River Fisheries. Overall, 13,000 juvenile fish with a total weight of about 76 kilograms were released.

Also in 2016, juvenile sterlet (sturgeon) was bred at the LLC Karmanovsky Rybkhoz fish farm at the Company’s request. According to environmentalists, this species of fish should play a positive role in the ecological balance of the Kama River. The total weight of more than 96,000 juvenile fish was about 453 kilograms.

The danger zone around the sinkhole is fenced off with restricted access to people, and the perimeter is monitored round-theclock. Monitoring of the danger zone has been expanded: additional online monitoring methods have been implemented and observation of developments in the situation has been intensified. Specialized scientific and design organisations – the Mining Institute of the Ural Branch of the Russian Academy of Sciences and CJSC VNII Galurgia – are involved in the accident mitigation.

The Company is now implementing a number of engineering and other measures to minimise the impact of the accident and reduce suprasalt water inflows into the mine. In order to reduce water inflow into the mine, a dewatering system has been set up around the sinkhole and voids are being plugged. The danger zone within the Solikamsk-2 mine has been outlined and backfilling is being done outside it to prevent further adverse effects of the accident. The situation continues to be monitored.

Waste management

Mining activities generate significant amounts of secondary resources and waste. The Company is doing everything possible to prevent negative impact on the environment. In particular, Uralkali is making the following efforts:

  • modernising both existing and new facilities to increase the recovery ratio of valuable components from ore (top priority)
  • backfilling mined-out areas of mines with waste
  • recycling waste into products
  • involving waste in secondary use (waste recycling into products for sale, transfer for the preparation of raw materials used in soda production)
  • neutralising and disposing of waste at sites that meet the requirements of sanitary and environmental legislation

Since 2013, the Company has successfully implemented a project for processing old reinforced concrete slabs into crushed stone. During this time, more than 60,000 tonnes of large reinforced concrete products that remain after major maintenance of buildings and structures have been recycled.

There was a significant increase in the productivity of the crushing-andsorting plant in 2016, with the amount of processed reinforced concrete waste increasing by 150% to 31,184 tonnes from 12,600 tonnes in 2015. The resulting crushed stone was utilised as fill for temporary roads, dams and temporary construction sites. The Company thus prevented the disposal of this waste at the landfill in Berezniki in 2016.

A typical trend in 2016 was the reduction of waste generation and the increase in its use by both Uralkali and its subsidiaries/ affiliates in the Russian Federation. This resulted in less waste being disposed of at the municipal landfill and our own waste disposal facilities.

The Company’s enterprises produced 30.16 million tonnes of waste in 2016. More than 99% of this was industrial waste of hazard class V (halite waste and clay-salt slurries). The Company increased the utilisation of halite waste and clay-salt slurries by 15% to 13.277 million tonnes in 2016 from 11.237 million tonnes in 2015, including 1.6 million tonnes of halite waste previously accumulated at Uralkali’s disposal facilities. Halite waste is used for the production of:

  • industrial sodium chloride
  • saline solution for production of soda
  • saline solution for production of soda

Halite waste and clay-salt slurries are also used for backfilling the mined-out areas of mines.

In the reporting period, waste disposal at landfills decreased by 21% compared to 2015 and amounted to 29,410 tonnes. The decrease has been observed over the past four years and amounts to 30% compared to 2013 (41,950 tonnes in 2013).

This decrease in waste disposal is due to the highly efficient operation of the crushing-andsorting plant and the increase in the tonnage of waste transferred to third parties. In 2016, 60,150 tonnes of waste was transferred to third parties for use and neutralisation, up by 9% from 55,200 tonnes in 2015.

Public environmental measures

The Company’s environmental activities are not limited to environmental measures alone. Uralkali’s employees actively participate in all environmental campaigns in the cities of Berezniki and Solikamsk. Potash industry workers show by their own example that in order to live in a clean city we should begin with ourselves. Environmental problems can only be solved by joining forces.

To this end, Uralkali actively participates in national and municipal environmental campaigns, supports the initiatives of its employees and NGOs, promotes green thinking, and helps educate its employees and their family members about environmental problems. Uralkali supported the following environmental events in 2016:

  • Volunteer clean-ups in the cities of Berezniki and Solikamsk as part of the All-Russia environmental volunteer clean-up Green Spring
  • The municipal campaign Your Tree to the City in Berezniki
  • Campaigns to plant greenery and clean up debris in Berezniki and Solikamsk during the All-Russia event Protection from Environmental Hazard Days
  • Environmental procession along the streets of Berezniki in support of World Environment Day and Ecologist Day
  • Volunteer clean-ups as part of the national event Water of Russia
  • The Space Eco-Council, organised by the Green Contour movement together with the administration of the Ural Gems summer camp for four summer shifts
  • The environmental photo contest «Give clean rest!»
  • Volunteer clean-ups in Berezniki as part of the All-Russia environmental volunteer clean-up Green Russia
  • A garbage collection campaign on the shores of Lake Redikor (Cherdynsky district) as part of the All-Russia campaign «Let’s do it»
  • The Ecoimage – 2016 contest among enterprises and organisations in Berezniki, organised by the municipal administration; Uralkali won in the Environmental Initiative category
  • The XII All-Russia review competition Leader of Environmental Activities in Russia 2016 as part of the World Experience and the Russian Economy International Forum, in which Uralkali received the winner’s certificate
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