Welcome to our 2018 Sustainability Report.

Over the past year we have redefined our strategy – the Iluka Plan – and our purpose – to deliver sustainable value. This places sustainability at the very centre of Iluka’s business.

Underpinning our approach to sustainability is the recognition that the key pillars – our people, health and safety, social performance, environment, economic responsibility and governance – are mutually reinforcing. To deliver sustainable profits necessitates a workforce that is skilled, engaged, diverse and empowered. It is also dependent on the ongoing trust of our communities. That trust is earned primarily from delivering on our commitments
– doing what we say we will do and reporting on our progress transparently. Finally, our ability to invest in our people and communities relies on sustainable financial performance.

The health and safety of our workforce is paramount. It was with great sadness that we reported the death in March 2018 of Glenn Morton – a member of the BCE Surveying team, subcontracted by Watpac as part of the Cataby project early site works. Glenn suffered a severe reaction to what is believed to have been a bee sting and, despite the efforts of the people at site and medical professionals, passed away 14 days later. Iluka’s Chairman acknowledged Glenn’s tragic passing at the company’s 2018 Annual General Meeting.

Across the business, thirty-four people sustained recordable injuries while at work in 2018 resulting in an end of year TRIFR of 3.5, an increase from 2.8 in 2017. Two of the associated incidents had the potential to result in severe permanent disabling injuries or fatalities which was a significant reduction from eight such incidents in 2017. The reduction in serious potential incidents was pleasing. The severity rate of injuries also declined from 97.1 to 90.1, while the LTIFR remained the same as 2017 at 1.0 per million hours worked.

In acquiring Sierra Rutile, Iluka was cognisant that operating in a developing country would present new challenges. The operation performed unacceptably in 2018 with production impacted by a range of technical, industrial and external issues. Although substantial, the company does not regard these challenges as insurmountable and we are focused on achieving long-term stability in the operating environment.

As reported with the full year results, Iluka and the International Finance Corporation (IFC), a member of the World Bank Group, have been in discussions to commence a strategic partnership in Sierra Leone. While this is still subject to due diligence and final approvals, we believe that partnering with the IFC would provide benefits to Iluka, IFC and the people of Sierra Leone by promoting the continued, sustainable development of the Sierra Rutile operation.

Iluka’s global footprint requires us to address a broader range of social issues, risks and impacts, in particular the protection of human rights. In October 2018 the Board approved our Human Rights Policy, which expresses the commitment to respecting human rights and seeking to prevent any negative impacts from our operations or activities. The Policy covers a range of areas including land acquisition, resettlement and the rejection of any form of slavery or child labour. During the year we completed the resettlement of Foinda village in Sierra Leone to allow for mining of the areas below the village footprint. More than 800 people were re-established at a new village site. The project has seen significant improvements in housing, water and sanitation, shared  facilities for the community, and includes a focus on livelihood restoration.

Our approach to environmental stewardship is based on understanding and minimising potential impacts on the environment. We have had fewer level 3 and above environmental incidents in 2018 than 2017 and we continue to focus on strengthening our closure processes.

Mining tailings dam tragedies around the globe have reinforced the efforts mining companies must make to ensure best practice tailings management. Iluka operates active tailings storage facilities at Jacinth-Ambrosia and Sierra Rutile, with no upstream raised tailings containments at either location. Since acquisition in December 2016, Sierra Rutile has significantly improved the management of its tailings structures through a programme of physical works, monitoring, regular operational inspections and internal and external audits.

We have undertaken a review of the recommendations made by the Task Force on Climate-related Financial Disclosures (TCFD). We are supportive of the Paris Agreement objectives and accept the Intergovernmental Panel on Climate Change (IPCC) assessment of climate change science. We are working towards alignment with the TFCD recommendations over the next three years. This will enable us to identify, understand and assess our material risks and potential opportunities relating to physical and transitional impacts from climate change; and, over time to develop plans to mitigate these risks and take up opportunities.

We share economic benefits with the communities we operate in through job creation, building community infrastructure, local procurement, social investment and paying taxes and royalties. In 2018, we contributed over $980,000 to initiatives in our operational regions and made payments to contractors and suppliers of over $300 million.

We have published an Approach to Tax Statement, which publicly expressed the  underlying principles of our tax strategy and tax risk management framework. Paying tax in accordance with our legal obligations plays an important part in building and maintaining trust. In 2018 we paid $56 million in income taxes, royalties and other payments to national, regional and local governments.

This report sets out our 2018 performance and our targets for 2019 and beyond. These targets consider our material sustainability risks as well as the global challenges facing the resources sector today.  Iluka remains committed to reporting transparently to our stakeholders and improving our sustainability performance.

Tom O’Leary
Managing Director and 
Chief Executive Officer

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