Environment

During the 2003/04 year we obtained permits for both the Cracow and Toguraci projects. Over the past five years, Newcrest has successfully permitted a number of major projects, including Cadia Hill, Gosowong, Ridgeway and Telfer.

Managing stakeholder relationships

At Newcrest, successful permitting is not just about obtaining permission to construct and operate projects. A thorough understanding of the environmental, social and economic setting of a project enables us to maximise the benefits and minimise any adverse elements.

Developing a mine is a partnership between Newcrest and our key stakeholders – shareholders, employees, government and the local community. No two situations are alike; for example, compare the temperate central tablelands of New South Wales with the arid tropics of Western Australia, or the wet tropics of Indonesia.

Getting it right is important and we believe that our success is measured in the positive contribution Newcrest makes to both the social and economic fabric of the local communities in which we operate.

Environmental highlights

Highlights of the year’s activities include:

• Reported environmental incidents. The number of reported environmental incidents rose compared with the previous year (22 in 2003/04 compared with 15 in 2002/03). This was still a good performance given the increase in construction activity at Telfer and Cracow. To provide a more accurate year-on-year comparison we have used the number of hours worked during the year as an indicator of overall Company activity. On this basis there was a decline in environmental incidents per million hours worked to 2.93 in 2003/04 from 3.46 in 2002/03.
  Unfortunately, we had a Category IV environmental incident this year. Following an audit in February 2004, the Western Australian Department of Environment and Protection raised concerns regarding the level of fauna mortality during construction of the Telfer Gas Pipeline. While the fauna rescue plan was the responsibility of our contractors, Newcrest retained ultimate environmental responsibility for the infrastructure corridor. We responded by immediately placing our own full-time environmental observer with the pipeline to monitor compliance with the fauna rescue plan. This has resulted in significant improvement.
• Sustainability. Newcrest continues to promote the concept of sustainability, embracing a balance between economic prosperity, environmental quality and social responsibility. We released our second Sustainability Report in October 2003 and a fresh report will be issued in October 2004. We recognise the importance of informing our stakeholders of our environmental and social performance and commit to increase the breadth of coverage in future reports. Increasingly we will incorporate relevant elements of the Global Reporting Initiative in our reporting. The Company’s Sustainability Reports can be viewed on its website.
• AMI Code Implementation Survey. In keeping with our commitment under the AMI Code for Environmental Management, Newcrest completed its fourth Code Implementation Survey during the 2003/04 year. This survey measures the success of individual operations in implementing the various principles of the Code. Both of our operations showed significant improvement over the scores obtained in the 2002 survey. The results for each site (and the Group consolidated score) are shown in the table below. Under the modified scoring system used to assess implementation of the Code, 80 percent indicates that the systems represented by the Code have been fully implemented and integrated. At 69 percent, Newcrest’s score indicates that we have the necessary systems and processes in place and are well advanced in integrating these elements into our overall business functions.

• Rehabilitation. We are committed to progressive rehabilitation and the planned and orderly closure of our operations. All of our operations have closure plans and provision is made in the Company accounts for the costs of closure on an annual basis. Our commitment is demonstrated by our work at Gosowong, where during the care and maintenance phase, pending the commissioning of Toguraci, over 80 percent of the area we disturbed in the Gosowong operations was successfully rehabilitated.

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