Principles

The specifics of steel and mining operations causes serious concerns in relation to health and safety. With regard to this EVRAZ realizes the responsibility and acts in compliance with laws and regulations applicable in the countries in which it operates. EVRAZ’s health and safety management system is aimed to eliminate risks of any harm to the employees’ health and safety. The company constantly monitors risks and holds statistics of accidents in order to act timely in case of slightest sign of risk. Health and safety managers distribute the corresponding information within the divisions of the Group and provide the needed data to the labour unions as well as health and safety representatives.

EVRAZ sets its production facilities specific objectives and constantly strives to find new ways to reduce risk. One of EVRAZ’s priorities in this area is to ensure a uniform approach across the entire Group by implementing globally recognised health and safety standards within each subsidiary and each plant.

Basic principles of health and safety policy are highlighted in the Code of Ethics and the Code of Business Conduct. 

Following key issues stated in the Codes are obligatory for every enterprise of the Group:

  • EVRAZ considers the health and safety of its employees to be paramount.
  • The Group constantly looks for ways in which the health and safety of its workforce may be improved, and is committed to complying with all applicable health and safety laws and regulations.
  • EVRAZ makes every effort to conduct regular inspections in order to eliminate dangerous conditions or behaviour along with their causes, and to develop programmes dedicated to improving safety and wellbeing.
  • All employees are encouraged to report the slightest risk and to suggest ways in which their jobs could be made safer.

To this end EVRAZ continuously refines and improves the Company’s health and safety management system and acts in compliance with the health and safety laws and regulations applicable in the countries in which it operates. The importance EVRAZ attaches to such issues is reflected in the Company’s formation of a Health, Safety and Environmental Committee, comprised of three independent directors, during 2010 accompanied by the appointment of Alexander Kruchinin as Vice President of Health, Safety and Environment. Mr Kruchinin, a longstanding specialist in industrial safety and ecology, reports directly to Alexander Frolov, Chief Executive of EVRAZ. EVRAZ’s critical indicator relates to the annual incidence of fatal accidents which, in 2010, showed a 21% reduction compared with 2009. 

In order to monitor internal industrial safety indicators and carry out comparative analysis, the Group applies the Lost Time Incident Frequency Rate (LTIFR). This ratio reflects the number of lost time accidents per 1,000,000 man-hours worked. A lower incidence of accidents was duly reflected in a reduction in EVRAZ’s LTIFR from 2.69 in 2009 to 2.40 in 2010.

Implementation of Special Safety Projects at Coal Operations

Investment in industrial safety and other related matters at Yuzhkuzbassugol totalled RUB 407.1 million (US$14.4 million) in 2010. Expenditure included expert assessments in relation to aspects of industrial safety and the technical condition of certain equipment, the installation of aspiration and conditioning systems, purchases of personal safety equipment, the certification of workplaces, employee training courses and medical inspections.

In the fourth quarter of 2010, additional funds of (RUB543.2 million (US$19.2 million) were allocated to industrial safety expenditure to fulfill the requirements of Rostekhnadzor, the supervisory arm of the

Ministry of Natural Resources and Ecology. A total of RUB340.8 million (US$12.1 million) of this allocation was utilised in 2010, with the remaining expenditure scheduled for 2011.

A special programme at Yuzhkuzbassugol involving the installation of alarm and control systems throughout the mines is well under way and is already in operation at Yerunakovskaya-8, Yubileynaya 2 (formerly Ulyanovskaya) and Yesaulskaya. The total costs associated with this project, including systems that prevent employees from entering danger zones, are estimated at RUB151.6 (US$5.4 million).

Projects designed to improve communal facilities are also progressing. Following the development of the Yubileynaya 2 mine, work commenced on the construction of an additional Administration unit, a development that will significantly enhance the scale of amenities (medical services and equipment, showers, canteen facilities, etc.) available to the plant’s 1,300 employees. This project is scheduled to come on stream in 2012 at an estimated cost of RUB295 million (US$10.4 million).

EVRAZ has long acknowledged the importance of constantly advancing its technology with regard to the monitoring and control of underground air and gas levels. To this end, a Davis Derby information system, designed to provide data from all of Yuzhkuzbassugol’s mines, is currently on test with the online monitoring of methane levels facilitated by state-of-the-art sensory equipment. Safety and security are closely related and the Company has installed a radio wave scanner at Yubileynaya 2 in order to guard against the possibility of prohibited items being brought into the working area. This pilot scheme commenced in September 2010 at a cost of RUB6.9 million (US$0.2 million).

Key Targets for 2011

  • Accident reporting: implementation of an instant accident reporting system (Flash Report) throughout the Group’s operations.
  • Accident investigation: development and implementation of internal accident investigation procedures – determination of the cause/causes of the accident (first-hand accounts/in-system data), decisions regarding corrective measures. Focus on implementation of corrective measures and measures designed to reduce detected risks.
  • Lessons learned from accidents: preventative action through the compilation of a list of precautionary measures based on historic experience for distribution to employees.
  • Safety reporting and statistics analysis: development and implementation of an integrated Health and Safety reporting system taking into account Russian and international standards in respect of organizations such as the Global Reporting Initiative (GRI) and Workers Safety Advisers (WSA). Classification and analysis of current aspects of labour protection and industrial safety to identify areas for improvement.
  • Realisation of targeted projects: introduction of safety projects designed to reduce accidents based on analysis of in-system data.