Рjsc “arcelormittal kryvyi rih” 50095, ukraine, dnepropetrovsk … · 2016-07-01 · ukraine....

ArcelorMittal Kryvyi Rih Sustainability Report – 2015 2

Published in June 2016.

РJSC “ArcelorMittal Kryvyi Rih” 50095, Ukraine, Dnepropetrovsk region, Kryviy Rih, Ordzhonikidze st., 1

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2015Sustainability Report 2015

ArcelorMittal Kryvyi Rih


Content

About ArcelorMittal

Message from CEO

Sustainable development through 10 outcomes

Our progress in 2015

Safe, healthy, quality working lives for our people

Products that accelerate more sustainable lifestyles Products that create sustainable infrastructure Efficient use of resources and high recycling rates Trusted user of air, land and water Responsible energy user that helps create a lower carbon future Supply chains that our customers trust Active and welcomed member of the community Pipeline of talented scientists and engineers for tomorrow Our contribution to society measured, shared and valued Transparent good governance

Performance at a glance

About this report

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2

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4

5

6

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8

9

10

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12

13

14

15

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17

114 million tonnes is ArcelorMittal Group’s total annual steel production capacity in 2015

84,6 million tonnes total steel shipment in 2015

$227 million is the amount the ArcelorMittal Group invested in research and development in 2015

About ArcelorMittal

ArcelorMittal is a leading mining and steel company and a steel producer in the world with achievable production capacity of approximately 114 million tonnes of crude steel per year. ArcelorMittal with more than 209 thousand employees operates in 60 countries and has industrial presence in 19 countries, has leading positions in key steel markets in the world, including automotive, construction, household appliances and packaging.

Sustainable development, quality, leadership are core values of ArcelorMittal. They determine general strategy of long-term development of the company. Safety is a top priority of every unit of ArcelorMittal Group and its aim is to become the safest world’s steel and mining company.

ArcelorMittal is active in researches of new technologies and solutions at 12 big R&Ds worldwide helping to make steel production more sustainable and environment friendly, improving energy efficiency and reducing environment footprint.

More detailed information about ArcelorMittal you can find at corporate.arcelormittal.com

ArcelorMittal Sustainability Report – 2015 8

About PJSC ArcelorMittal Kryvyi Rih

PJSC ArcelorMittal Kryvyi Rih is part of the international company ArcelorMittal and one of the leaders among the largest enterprises of Mining and Steel Complex of Ukraine.

PJSC ArcelorMittal Kryvyi Rih is a full-cycle steel plant, which consists of the coke and by-product plant, ore mining (open pits and underground ore mining) and steel production which includes sinter and blast furnace, steelmaking and rolling departments.

The company specializes in manufacturing of long rolled steel – reinforcing bars and wire rod of common and alloyed grades, and wire rod, bars and sections of low alloyed as well as special purpose steel grades.

PJSC ArcelorMittal Kryvyi Rih is the largest exporter in Ukraine.

Performance 2015, million tonnes

2015 2014 2013Iron ore 24,5 25,1 25,5Coke moisture 6%

1,9 1,7 1,4

Concentrate 10,1 9,9 10,2Sinter 9,8 9,8 10,2Hot metal 5,5 5,5 5,6Crude steel 6,3* 6,3 6,4Rolled product 5,3 5,6 5,7

27 139 employees of PJSC ArcelorMittal Kryvyi Rih

6.3* million tonnes of steel produced in 2015

67 Countries of the world where our products are supplied to

Dear readers,

We are one of the steel leaders in Ukraine and a part of steel producer number one worldwide. ArcelorMittal’s sustainable development concept published in 2015 establishes goals for our business and widens initiatives being implemented in the group in environment, social and economical areas. This concept is an integral part of activity of the company and a key factor in development of our plant. We believe that we can contribute in sustainable development of modern world by careful use of resources, minimizing environment impact of our activity, improving life in the city and region we operate.

This report contains the review of our activity within 10 outcomes informing our progress and achievements and existing problems we face during the year and in future to overcome.

2015 year was tough for global mining and steel industry and our plant. It was foremost caused by global slumping steel demand due to China dumping and tough economy.

But we could withstand and even improve some of our results comparing with 2014.

First, we reduced occupational injury rate significantly to 0.35. Safety is our priority number one and we will continue our efforts to achieve zero injuries and accidents among our employees and contractors.

Our employees were and remain our main value. Average salary rate at ArcelorMittal Kryvyi Rih is one of the highest among top mining and steel companies in Ukraine and we provide our people one of the best social package in mining and steel industry, professional and career growth opportunities, training at ArcelorMittal University.

We have implemented some of key investment environment friendly projects: overhaul of BF6 and reconstruction of converter # 5, reducing dust emissions by 12%. Capital investment amounted to more than 5.1 billion hryvna. We will continue investments in 2016 as a part of modernization strategy of the whole plant.

In 2015 ArcelorMittal marked 10 years of operation in Ukraine undertaking significant commitments in environment and social areas, we are responsible for their fulfillment in front of the country, this region and our employees. ArcelorMittal Group continues to be committed to work in Ukraine and even in tough time for global steel industry and the company. As one of the major tax payers in the country we continue to support Ukrainian economy. In 2015 ArcelorMittal Kryvyi Rih allocated more than 8.6 billion hryvna tax and duties to the government.

We will continue to invest in our industrial operations in future to support sustainable development of our business, our employees and local community.

ParamjitKahlon CEO of ArcelorMittal Kryvyi Rih

Message from CEO


Crude steel: (million tonnes)

Environmental CAPEX: (MUAH)

6.3*

859.5

Iron ore: (million tonnes)

Lost-time injury rate - total: (per million hours worked)

Payments to government: (MUAH)

Incomes: (MUAH)

CAPEX: (MUAH)

Rolled product: (million tonnes)

Social investments: (MUAH)

Number of employees: total

5.5

0.35

8 645

46 261.3

5 167.4

5.3

18.3

27 139

2014

2013

5.5

0.52

3 792

28 251.2

2 918.2

5.6

28.6

29 131

6.3

718.4

5.6

0.64

2 635 1 259.0

5.7

57.8

29 991

6.4

325.6

2015 5.5

0.35

8 645

36 740.6

5 167.4

5.3

18.3

27 139

859.5

Performance 2015

2014

2013

2015

2014

2013

2015

2014

2013

2015

2014

2013

2015

2014

2013

2015

2014

2013

2015

2014

2013

2015

2014

2013

2015

2014

2013

2015

46 261.3

6.3


* total crude steel 6.1 million tonnes and addition to that pig iron (176 kt equivalent to crude steel 206 kt) was produced, hence total crude steel equivalent was 6.3 million tonnes.

ArcelorMittal has a good reputation in terms of corporate responsibility, and since coming to Ukraine we have made great contribution to the development of local communities, actively interacting with all stakeholders and maintaining an open dialogue with them.

The all who review our reports published since 2010, are aware that our approach to the corporate responsibility is based on the four aspects: investments in our people, production of sustainable steel, development of local communities and transparent management.

At the same time, in the world there are global processes caused by the climate changes, the reduction of resources, demographic problems and environmental problems. If not managed, these factors create certain risks for such major companies as ArcelorMittal namely for business operations and profit, reputation and social credibility. But they can also be great opportunities for further development.


Sustainability Concept

We need to find the solutions that will help our company and the world to be safer, stronger and more sustainable. We need the approach that will help to avoid the risks and destructions for our operations and to create the considerable value for our partners today and in the future.

Our 10 goals are the basis of our sustainability concept and all the efforts will be focused on their achievement in order to fulfill our long-term obligations.

1. People. Safe, healthy, quality working lives for our people2. Products that accelerate more sustainable lifestyles3. Infrastructure. Products that create sustainable infrastructure4. Resources. Efficient use of resources and high recycling rates5. Air, land and water. Trusted user of air, land and water6. Energy and carbon. Responsible energy user that helps create a lower carbon future7. Supply chains that our customers trust8. Community. Active and welcomed member of the community

9. Scientists and engineers. Pipeline of talented scientists and engineers for tomorrow10. Impact measurement. Our contribution to society measured, shared and valuedAll underpinned by transparent good governance

We shall determine the indicators for each goal and estimate the progress by informing our readers in the annual reports about the way we produce steel and how we use resources and support our people and our communities.


People. Safe, healthy, quality working lives for our people

01We aim to make our production site the safest working place not only for our employees, but also for contractors. We want them to be sure that they are appreciated and respected. Our success is based on our people’s commitment and support, and we want each employee to have the opportunity to develop the potential and to move forward. We aim to create the positive working culture based on the safe operation, respect of human dignity and rights in order to involve, develop and retain the talented specialists.


People Products Infrastructure Resourse Air, land and water Energy Supply chains Scientists and engineersCommunity Impact measurement

Performance at a glance (see data with comments)

Metric Unit 2015 2014 Management comment Status

Lost-time injury frequency rate

Lost day rate

Per million hours worked

The total lost days to the total number of

hours

0.35

4,4

0.52

5,8

Our lost-time injury rate significantly improved

Lost-day rate improved

Fatalities Number 2 1Unfortunately, we did

not manage to prevent the 2 fatalities

Absenteeism rate % 3,37 3,57Our absenteeism rate

improvement.

Training provided per employee Average hours 85 68Number of hours of training

significantly increased

Strikes 1 week’s duration Number 0 0 N/A

Key: met target/improved; progress neutral; did not meet target/deteriorated


We aim to create comfort working places without operational risks for our employees and contractors that’s why safety is our priority #1. Our aim is zero accidents at work, prevention injuries and hazardous situations, reducing risk of occupational diseases.

The H&S policy provides the coordination of all the Company’s subdivisions activity and compliance with the operation safety norms and requirements. Labour protection matters are included in the collective agreement. Every year, we allocate funds for the creation of safe working conditions, prevention of occupational injuries and diseases. In 2015, UAH 252.0 million was invested in health and safety.

In 2015, we succeeded in the accidents frequency rate reduction; it made 0.35 vs. 0.52 in 2014. The number of accidents made 25 (31 in 2014). Unfortunately, we did not manage to prevent the 2 fatalities: one with the contractor’s employee in Blast Furnace Shop No.1 and one with employee of our plant at iron ore underground mining.

Most of accidents (more than 58%) happened due to the organizational reasons. Therefore, the special focus of 2016 H&S activity will remain on compliance with H&S requirements, job duties, use of personal protection equipment by both employees of the Company and contractors.

To create safe environment, PJSC ArcelorMittal Kryvyi Rih.both invests in and provides H&S comprehensive training for own employees and contractors. It also controls the compliance with the requirements, norms and rules of the occupational safety.

Achieving zero injuries first of all depends on the people themselves, starting with rules of conduct in the production to a culture of communication, habits, using personal protective equipment. We aim to make work safety a real value for each and every employee of PJSC ArcelorMittal Kryvyi Rih.

Safety

2.5 During the 10-year period, the level of occupational injuries at PJSC «ArcelorMittal Kryvyi Rih» has decreased by 2.5 times

1.6 bln UAH was invested in health and safety in 2006-2015

Courageous Leadership aims at building of new culture of safe production. The trainers play the key role in learning. We rely on internal professionals instead of experienced trainers as the employees better know the operational environment and concerns of their teams, moreover, the general level of credibility of their colleagues for them is higher. Their task is to convince all the skeptics that zero injury rate is possible even at the big company with a lot of hazards, and achievement of this “zero” depends on each of us. 13 678 employees were trained in 2015 including:12 087 blue collars and 1 591 white collars



Health of Our Employees

We consider the employees’ health to be the key for their safety, productivity and wellbeing in general. Our main goal in this area is the occupational diseases prevention and the sick rate decrease.

The actions we implement are important not only for the prevention of various types of diseases, but also for improvement of the employees’ health.

Main focus:

• the employees’ knowledge improvement;

• regular medical examinations and procedures;

• health improvement and treatment.

The Company holds annual Health & Safety Week aimed to draw the attention of each employee of the Company to own health. We remind them how it is important to be always responsible and mindful of own health. To preserve the health of the people, we improve the work environment, and medical specialists carry out the regular examinations and provide qualified medical services. All our employees have the opportunity to undergo the examination and treatment in the Dzherelo health center, to rest in the recreation centers and rest camps of the Company, as well as to undergo the medical treatment in the health resorts of Ukraine.

0.17 occupational disease rate in 2015

3.37 absenteeism rate

Absenteeism rate

2013 3.66

2014 3.57

2015 3.37

Number of occupational diseases

2013 43

2014 42

2015 41

The lost time injuries frequency rate: (per million hours worked)

2013 0.64

2014 0.52

2015 0.35

The lost day rate

2013 7.3

2014 5.8

2015 4.4


The employees’ involvement and satisfaction with their work is the key to success of any company and the development of individuals. Our employees and young talents expect that with such large company as ours they will be able to realize their professional opportunities and make their career along with the development and training.

The system of interaction with the personnel aims to form the team of the people sharing the same views, values and strategic goals of the Company, and to increase its efficiency and competitiveness, personal development of the employees, potential for their professional growth and social protection.

During the year there was natural attrition of staff related to voluntary resignation. The staff turnover rate made 2.2%

Our Company is the leader in terms of the salary level and social support among Ukrainian steelmaking companies. Based on 2015 results, the average salary level is 7 697.5 UAH (excluding payments under VSS program).

Human ResourcesWe propose equal opportunities to all the candidates willing to be employed by the Company. This is based on their professional competence. The existing employment system ensures transparency of candidates’ selection during open competition. In 2015 769 people were employed, including: 456 men, 313 women. Any unlawful discriminatory practice based on race, colour, gender, sexual orientation, age, religion, ethnicity, national or social origin, disability or any other basis is not tolerated for employment, payment and career development.

PJSC ArcelorMittal Kryvyi Rih provides social protection for all of its employees in accordance with the collective agreement. Any significant changes in the company are carried out only after the advance provision of information to trade union organizations. The Company administration provides information about planned reorganization to the trade unions not later than three months since the date of decision making in order to take actions to prevent or mitigate the negative consequences. As per the Labour Code of Ukraine, the employees of the Company are informed about planned significant changes minimum two months before. In the reported period there were no stikes and lockouts.

The staff structure in 2015 with the breakdown by age, sex and categories

Gender Categories

men

women

blue collars

white collars

70.8 %

29.8 %

80,3%

19,7%

Age

up 30 years old

30-50 years old

over 50 years old

14.6 %13.8 %

71.6 %



the year there is discussion of the results and assessment of employee’s performance and potential. The results achieved by the program participants determine the possibilities of their carrier growth, change of remuneration level and participation in international training and experience sharing projects. In 2015, 752 employees (3% of the total headcount of the Company), including 62% - men and 38% - women, participated in GEDP cycle.

Climate Survey Speak Up 2015

Employees’ support and engagement are important for successful development of the Company. Every two year we have climate survey that allows to define the level of engagement and loyalty and to identify the evolving problems. We had the same survey in 2013. This survey covers the main aspects of Company’s activity, including H&S, professional development, communication, remuneration and benefits, values, etc. 1 252 employees participated in the survey. The survey showed that employees’ satisfaction level increased by 2% vs. 2013 results and made 77% (75% in 2013).

Knowledge is the intellectual capital of the employees that forms the foundation for their growth and success. What is important for successful carrier in modern business is not only professional competences, but also knowledge and skills in related areas that allow to have a better view on the tasks to be performed and processes arrangement. Such opportunities are provided by ArcelorMittal University Ukraine.In 2015, there were more than 200 short-term training courses in different areas, including the training for authorization to perform high hazardous job that is required by H&S legislation of Ukraine. Moreover, there are trainings for more than 400 blue-collar jobs. English school Speak Up for 160 employees of the Company was started at ArcelorMittal University Ukraine in 2015. The training program was adjusted in compliance with the objectives of corporate training and the needs of each trainee. The program complexity met the level of particular student. 38 employees passed “Technical English” training.

The war conflict in the East of Ukraine has negative impact on all the areas: economy, industry and causes social and humanitarian problems, thus influencing the psychological state of people.

In 2014-2015, more than 530 employees were mobilized to participate in the anti-terrorist operation (ATO) in the East of Ukraine. PJSC ArcelorMittal Kryvyi Rih implemented programs to support employees mobilized for military service, their families and children.

Workers who returned from ATO zone and set to work are provided with required social and psychological assistance. More than 280 employees have received psychological counseling. We also provided trainings for specialists of the enterprise, who will directly work with demobilized soldiers. The trainings were attended by 88 chiefs of shops and foremen. Participants discussed the post-traumatic stress disorder, its symptoms, and the technique to cope with irritation and anger.

In 2014-2015, 16 employees of the Company were killed and 24 were injured in ATO. The company is committed to support the families of deceased employees. Each family of the deceased had been provided with financial assistance amounting to 50 thousand UAH.

The Foundation of PJSC ArcelorMittal Kryvyi Rih, created to support the families of employees killed or wounded during the fighting in the east of Ukraine, allocated budget to assist 13 minors in age from 1 to 16 years, and 12 families of wounded employees.

Personnel Training and Development We are sure that professional team is one of the attributes of competitive company.

Global Employee Development Program (GEDP) is aimed to develop employees following the strategy of the Company. Individual objectives agreed by the management are set for each participant of the program every year. At the end of


Learning Week “Learning – our key to success”

The second Learning Week was held at PJSC ArcelorMittal Kryvyi Rih in ArcelorMittal University Ukraine in June 2015 with more than 640 participants. Informal intellectual conference Pecha-Kucha, a simple presentation format where you show 20 images, each for 20 seconds, was held during the Learning Week. The conference with more than 350 participants on the subject “Lifelong Learning” included presentations and interesting ideas about how we can evolve during the whole life. There were 14 speakers, including employees, participants of many projects, activists, and youth leaders, as well as heads of the departments.

ArcelorMittal University Ukraine has close cooperation with public organizations of the city. In 2015, there were 16 activities, involving 1 131 people.

8.2 MUAH Investments in personnel training in 2015

2 341 013 the total number of academic hours

85 the average number of academic hours per employee


Products that accelerate more sustainable lifestyles 02

Steel is the fabric of life, a key element of the high technologies and solutions satisfying the daily needs of the society that will remain important in future as well. None of the other materials has such a unique combination of strength, usability, flexibility and multifunctionality of utilization. We want our steel to be the main material for public authorities, commissions responsible for selection and approval of construction projects as well as for companies that design and build, because they know that the steel is an integral circular “green” economy, rather than part of the problem.



We are working on the improvement of the product quality and interaction with the consumers. While producing steel products, we pay special attention to the environmental safety of the product. The corporate quality management system that meets the requirements of the international standard ISO 9001:2008 developed by the Technical Committee of the International Organization for Standardization, is in place at the Company. Our product is unique in the industry and we are aiming to have better service for our clients and focus on our consumers. This is the key to our current and future success. Rolled metal products, manufactured at PJSC ArcelorMittal Kryvyi Rih is used in all the world’s climatic zones. The most important facilities with the requirement of special reliability, such as bridges, residential buildings, state-of-the-art skyscrapers, are constructed with the use of our steel products, and this proves its exceptional strength properties.

We aim to better serve our customers and consumers. This is the key to our current and future success. The share of export sales amounted to 87%. In addition to the major markets we have developed new markets and increased sales in Europe, North and South America, Saudi Arabia.

“Rating first among the Ukrainian exporters according to the Forbes Ukraine following the results of the major Ukrainian companies operation in the first half of 2015”

5.4 million tonnes sales of steel products of PJSC ArcelorMittal Kryvyi Rih


Infrastructure. Products that create sustainable infrastructure

03

PJSC ArcelorMittal Kryvyi Rih, as well as other Ukrainian steel companies, recently faced a wide range of problems, both external and internal.



On the one hand it is the challenges of the global crisis, particularly the fall in prices and demand for steel products and increased competition. On the other hand - the conflict in eastern Ukraine, which disrupted many businesses, and the critical state of the Ukrainian economy, have led to a decline of production in mechanical engineering and other industries. In addition, a significant reduction in construction activity and the absence of large infrastructure projects have led to a significant decrease in demand for steel products and the impact on sales of PJSC ArcelorMittal Kryvyi Rih on the domestic market.

The share of shipments to the Ukrainian market amounted to 13 % of the total volumes in 2015. But we are ready to partner with the government in developing the country’s infrastructure and construction activity.

The Company maintains the reputation of a reliable partner for the clients and ensures the meeting of the requirements to steel products quality and the creation of the up-to-date level of service. The Company invests in the development of internal distribution network and the expansion of sales network. In 2015, the new steel product warehouse was opened in Kharkiv that enables the Company to improve regional sales network due to direct contacts with consumers and to reduce the time of steel product delivery to the customers.


Resources. Efficient use of resources and high recycling rates

04

Natural resources - land, water, air are required for our daily lives. Using of raw materials extracted from the Earth is a vital part of humanity, and the basis of modern society. At the same time, population growth, industrialization and globalization processes lead to a steady reduction of raw materials and increase their value.





Scrap recycled million tonnes 1.8 1.9

CO2 avoided from

scrap recyclingmillion tonnes

2,3 2,4

Production residues and by-products re-use (total)

% 51 52

BF Slag re-used– of which BF slag sold to

cementCO

2 avoided from slag used in

cement

million tonnes

million tonnes

million tonnes

1.1

0.7

0.5

0.9

0.8

0.6


The main raw material used in the production of steel is iron ore, coal, limestone and recyclable metal materials. Iron ore is the key raw material required for steel production, because it has high iron content - that is the main component. But iron ore mining and steel production significantly affect the environment due to formation and accumulation of large amounts of waste. Our stakeholders expect us to be more responsible in terms of resources usage and waste management.

Our experts apply new technologies to reduce the consumption of non-renewable natural resources through use of alternative fuels. For example, biofuels is a significant alternative to natural gas that allows not only to reduce the cost for purchasing of expensive fuel, but also reduce the impact on the environment, as it is a part of renewable energy.

More information on the use of biofuels you can find on page 36 in the “Energy” section.


31.2 million tonnes the volume of waste formation was made in 2015

16.0 million tonnes of waste reuse

The enterprise generates a large amount of waste. Waste recycling is an important factor for sustainable steel production. Recyclability is perhaps the most outstanding property of the steel. Even at the end of its lifecycle, it does not lose its properties and is ideal for processing. Every year about 500 million tonnes of scrap waste are used in the production of new steel products. It exceeds the total volume of recyclable materials, including paper, plastic, glass, copper, lead and aluminum.

The process wastes make 94-95% of the total volume of waste formation at the Company. They include: overburden rocks from the Ore Beneficiation Plant, waste rocks from Mining, mill tailings, metallurgical production waste materials (steelmaking and blast furnace slag), slurry and primary and secondary scale. The using of these wastes as secondary material resources helps to save raw materials, to prevent contamination of water, soil, air.

For example, waste rock and tailings are used for construction and recultivation. In 2015, the volume of re-use totaled 10.8 million tonnes and 1.3 million tonnes respectively.

Blast furnace slag is widely used in construction and its main consumer is the cement industry. 719.5 thousand tonnes of blast furnace slag were sold to cement plants. 51% of total waste generation was recycled in 2015.

Our specialists are looking for the new ways of wastes recycling in our Company and also for the reduction of wastes formation and disposal without using additional land resources. The company reduces the volume of waste disposal by using it in the process, sells it to other enterprises and companies.


Case: Steelmaking slag utilization in agriculture

The new project for the steelmaking slag utilization in agriculture as the fertilizer (ameliorant) for sour land deoxidation and increasing of the yield level of the various crops was launched in 2015. The most common ameliorant is the lime, but it is much more expensive than steelmaking slag thus, it is an excellent alternative for the agricultural business. As for the Company, utilization of steelmaking slag will solve the issue of slag dumps processing.

The team of experts from technical and marketing departments is working on the development of the project, which is unique in Ukraine. The European best practice concerning steelmaking slag utilization in agriculture was analyzed. This practice is now used for the fields in England, France and Germany.

Volynska and Kharkiv regions were selected as the experimental areas due to a relatively low acid-alkaline balance (pH) of the land there. Three state scientific institutes were involved in the research, and they confirmed that the steelmaking slag from PJSC «ArcelorMittal Kryvyi Rih» used as the ameliorant for the sour land deoxidation was efficient and at the same time eversafe for the environment including the animals. The presence of high content of calcium oxide, phosphorous, potassium, sodium and other elements in the ameliorant creates the additional value vs. lime as, being microelements, these compounds have a positive effect both on land and growing crop.



Air, land and water. Trusted user of air, land and water 05

Production of steel is a resource-intensive process, and inevitably related to serious negative impact on the environment as the result of the large number of wastes during raw materials extraction, land and water pollution, and CO2 emissions. We assess this impact and should minimize it so that our stakeholders have confidence in us because we are working openly and transparently.





Environmental and energy capital expenditure

Mln UAH 859 718 Increase due to implementation of large-scale investment program

Air *

Dust emissions kg/tonne of steel 6.0 6.7

NOx (steel) kg/tonne of steel 2.1 1.4Due to the quality of raw materials

(mainly at sinter plants)

SOx (steel) kg/tonne of steel 1.3 1.3 No change

Land

Waste generation Mln t 31.2 35.9 Reduction due to recycling

Waste disposal 16.0 17.1 Reduction due to recycling

Water

Water intake (steel)m3 water per tonne of

steel9.1 8.2

Before 2015 we reported about total water intake

Water net consumption (steel)m3 water per tonne of

steel8.5 7.7

Before 2015 we reported about total water consumption

*Note: ArcelorMittal reports dust, NOx and SOx emissions per tonne of steel produced as a more mean-ingful indicator than the absolute volumes generated.



The environmental management system that meets the requirements of the international standard ISO 14001:2004 is the main tool for the environmental priorities following-up during the production planning, and it covers all the operation subdivisions of the Company. Annually, the comprehensive measures are implemented at PJSC ArcelorMittal Kryvyi Rih in order to decrease of the impact of the Company’s production cycles on the environment. Environmental projects are included in the program of construction and modernization of production.

PJSC ArcelorMittal Kryvyi Rih investment program till 2020 covers all key aspects of the Company’s activity: Health and Safety, Production and Environment. The main goals of this program are to preserve volumes of production in current market conditions; to reduce production cost by implementing energy-saving technologies; to replace obsolete equipment with the new and environment-friendly one.

During a 10-year implementation of environmental projects we managed to considerably decrease the main environmental indicators of the Company’s operations impact on the environment:•pollutantsemissiontotheatmosphere–by33.3%;•thevolumeofwastewatersdischarge-by70.0%;•thevolumeofwastesdisposedintheenvironment-by24.0%.

Annually, the comprehensive measures are implemented at PJSC ArcelorMittal Kryvyi Rih in order to decrease of the impact of the Company’s production cycles on the environment.

Category 1 capital repair of BF-6 with the implementation of the complex environment protection measuresConstruction of three new gas cleaning plants at stock house and cast house of Blast Furnace No.6 of Blast Furnace Shop No.1. As the result of this measure implementation the emissions of hazardous substances from cast house of blast furnace were localized, dust emissions concentration of 30 mg/m3 was reached and this is less than state standards (50 mg/m3). The pollutants emissions will be reduced by 7 057 t/year.

Construction of two modern gas cleaning plants at BOFs No.5, 6 with implementation of CO combustion in BOF Shop. Innovative gas cleaning system allowed to reduce emissions of pollutants: dust by 238.312 t/year, CO by 1 544.8 t/year.

We will continue the introduction of the state-of-the-art technologies to reduce the Company’s operational impact on the environment.

19.1 bln UAH CAPEX during 2006-2015

5.17 bln UAH CAPEX in 2015

4.2 bln UAH investments in environment protection during 2006 - 2015



“ArcelorMittal Kryvyi Rih won ХIV All-Ukrainian ecological competition “Ecological Quality and Safety” in 2015”

Air

The process of steel production is linked with the considerable pollution of the atmosphere with emissions of dust, greenhouse gases and other polluting substances, such as nitrogen oxides (NOx) and sulfur oxides (SOx). The reduction of harmful emissions to the atmosphere is one of the priority activities of the Company in terms of environment. We determine the extent of potential impact of our activity on the air quality and we control the emissions to the atmosphere according to the legislation requirements.

Dust is one of the main after-effects of the environmental impact as the result of steel production. In 2015, dust emissions were reduced by 13.0% vs. 2014. At the same time, the increase of total emissions at the Company made 5.04%:

- there was increase in the production of own coke to compensate the cost of the imported one, which we had to purchase overseas due to the termination of raw materials supplies from the eastern regions of Ukraine. It resulted in the additional output of coke gas in the volume of 69.2 thousand m3 that was used in-house, for the needs of Coke Plant, HPPs 1 & 2 and rolling mills reheating furnaces. At the same time, it enabled to reduce the consumption of natural gas;

- SP-2 Sinter Strand No.6 was shutdown for the reconstruction under the Company modernization program. Thus, the SP-1 sinter production was increased by 4.7% to maintain the existing level of production.During the reconstruction of SP-2 Sinter Strand No.6, it is planned to replace the obsolete gas cleaning plants with the up-to-date ones that will ensure dedusting at all the process stages and following of Ukrainian and European standards for dust emissions: 50 mg/m3 and 20 mg/m3, as well as to reduce the pollutants emissions by 8.7 thousand t/y.

vv


9,1 m3 /t water intake 2015 in 2015

8.5 m3 /t steel water consumption rate in 2015

1 255.6 mln m3 reused water in 2015

Water

Water is the main resource of the Earth, which is essential to the existence of mankind, and the implementation of any activity today and in future. The two issues related to water are critical for us the volume of water used for production and wastewater treatment, in order to reduce pollution.

PJSC «ArcelorMittal Kryvyi Rih» uses water almost at all process stages starting with iron ore extraction and up to steelmaking and equipment cooling. Rolling, blast furnace and steelmaking processes are the most water consuming ones. The recirculation water system enables to reuse water used in the process before that still retains the quality indicators. The recirculated water supply enables to significantly reduce the consumption of natural water and to prevent the excessive environmental pollution.

The company aimed not only to reduce water consumption, but also to use it in a very efficient way. Rational water consumption at the plant is ensured with water recirculation system, which makes it possible to reuse water that has been used in the process and retained quality indicators. The use of water recirculation significantly reduces the natural water flow and prevent excessive pollution. The volume of recycled water made 96.0% of total consumption.

The steelmaking process is accompanied by the formation of waste water containing various impurities and compounds. For example, the sinter production generates waste waters containing ore and lime dust. BF process waters are featured with high alkalinity and total hardness. The rolling process waters contain coarse particles, scale and oils.

The total amount of waste waters in 2015 was 9 889 thousand m3 (10 235 thousand m3 in 2014). At the same time, the pollutants content in the waste waters was increased by 15%, due to the change in qualitative composition of mine waters. The chemical composition of underground/mine waters depends on the mineral structure of the enclosing rocks and ores through which they drain. The monitoring system of wastewater provides automatic continuous measurements of chlorides, iron, oil, suspended solids, pH in wastewater and discharge volumes.



Energy to reduce the carbon emissions 06

Climate change is the most important and complex issue that popped up in the first set of global and long-term challenges of the 21st century. Among the main reasons are the use of fuel, inefficient energy consumption, increase in greenhouse gas emissions, industrial activities.



Metric Unit 2015 2014Management

commentStatus

Primary energy consumption

GJ (PJ) 135,4 140,6

Total energy consumed fell due

to energy efficiency improvements.

Energy intensity GJ/t liquid steel 20,0 20,1Reduction represents real energy efficiency

improvements

Total CO2e emissions million tonnes 13,5 13,2

CO2 emissions per tonne*

tonnes CO2 per tonne

of steel2,2 2,1

Actual carbon intensity increased due to the higher share of blast furnace production.


Steel production is associated with the consumption of a significant amount of fuel, electricity and heat. Metallurgy is one of the main carbon emission sources, as nitrogen oxide and methane are generated at different stages of metallurgical process when combusting fuel in the funaces. Being one of the largest steel producers in the world, we have one of the largest corporate carbon



Steel production is the energy consuming process. Energy consumption control is one of the sustainable development issues. It is important in terms of the energy resources cost as well. The increase of energy efficiency is one of the main targets for our Company and the whole Group.

Efficient energy use is one of the factors of sustainable development, primarily through the reduction of CO

2

emissions. In addition, the rising cost of energy is one of the risks that can significantly affect the activity of the enterprise, so energy conservation is one of the key tasks of PJSC ArcelorMittal Kryviy Rih.

In 2015, we worked on switching blast furnaces #6, 7 to full coke operation that enables iron making without natural gas consumption. The implementation of this technology in 2016 will enable to reduce the natural gas consumption by 60 mln m3/y.

Pulverized coal preparation and injection at BF No. 9 is being constructed in order to improve production efficiency and significantly reduce natural gas and coke consumption. Completion and commissioning of the installation is planned in 2016.

Alternative Energy Case

In view of continuous increase in natural gas costs the utilization of alternative energy sources is getting crucial for the Company. In 2014 – 2015, the pilot installation was commissioned at rotary kilns #4, 5 in refractory and lime shop to substitute partially natural gas with biofuel (sunflower seed husks). In 2015, natural gas substitution rate made 49.8% with the flow-rate of 2.3 ton of the biofuel per 1000 m3 natural gas for those kilns.

In 2016, installation of multifuel burner is scheduled for rotary kiln No.3 in the refractory and lime shop with expected level of natural gas substitution equal to 65%.

135.4 GJ (PJ) primary energy consumption in 2015

20,0 GJ/t liquid steel energy intensity

“In 2015, the natural gas consumption was reduced by 18.9% vs. 2014”


Supply chains that our customers trust07

We should manage our supply chain actively and efficiently so that our stakeholders can be confident of our suppliers ethical behavior and of their activities aimed to support sustainable environmental and social standards.Our suppliers are one of the key stakeholders of PJSC ArcelorMittal Kryvyi Rih. For the successful partnership with the suppliers we aim to build the relationship based on trust and in the form of the open dialogue. We set up the Program of the responsible sourcing based on our initiatives and the best practices. Our procurement approach includes the responsible sourcing principles in the area of Health and Safety, process safety, business ethics, environment protection, and human rights. These key principles of procurement activities are as much important as the price and quality.

The Code supports the corporate policies and principles of ArcelorMittal including the Code of Business Conduct, the Policies of Human Rights, Health and Safety, Environment Protection, as well as Anti-Corruption Guidelines.

All new suppliers are subject to pre-evaluation on the basis of the filled vendors’ questionnaires following to the evaluation and approval procedure.

In 2015, 328 new suppliers (14.7% of the total number) were evaluated on the basis of the filled questionnaires.



Community. Active and welcomed member of the community

08

While working in the region, we respect the interests of the communities and take the responsibility for the impact of our activity on the stakeholders and the environment. We aim to improve the quality of life of our employees and their families as well as of the local communities and the whole society.


We understand the importance of the Company participation in the local communities development and take into account the real need in joint activities focused on the social and economic protection of Kryvyi Rih residents and the solution of the social and environmental problems, thus, we annually implement the projects for the residents’ life improvement, first of all those who live in the area of the Company impact. The cooperation is based on the principles of partnership, relationships transparency and fair collaboration with the local authorities.

In 2015, following the Agreement on Cooperation between the Executive Board of Kryvyi Rih City Council and PJSC ArcelorMittal Kryvyi Rih, the Company allocated UAH 10 mln. to the reconstruction of Ordzhonikidze and Vokzalnaia streets, and the square in front of Chervonaia railway station with redirection of the traffic in Kryvyi Rih.

These streets were not selected by chance. They have intensive traffic and the great number of pedestrians. In this area, there are extensive traffic junction, bus stops, and the roads used by the employees of PJSC ArcelorMittal Kryvyi Rih to reach the Company’s check points. The funds were allocated to the capital repair of the roads paving with the replacement of the power transmission line supports, outdoor lighting lamps, installation of storm water system, new road signs and road marking. Upon the completion of the capital repair, these streets have changed drastically. Now they are comfortable and safe.

The interaction with the stakeholders, both internal and external, means the development of the constructive relationships with those who are affected by us on or who are interested in our projects. We are looking for the open dialogue with all stakeholders.

During the meetings with communities’ leaders we identify the priorities for the social investments taking into account the communities’ needs and the mitigation of the Company’s impact on the environment



Corporate volunteering

Corporate volunteering means the voluntary work of the Company employees for the benefit of the local communities. PJSC ArcelorMittal volunteers committee joins the Company employees who are ready to provide a free support to people in need. The Company volunteers organize charity concerts for children with special needs, foster children and boarding school pupils. In 2015, they organized sports and entertainment events for 300 foster children and boarding school pupils.

The company does not leave families of workers who died in the ATO. During the Christmas holidays for 13 children of employees who died in the ATO were organized two-day trip to Kiev, for the International Children’s Day - a festive program at the recreation center “Volna” in Marianivka, and entertainment in the children’s center “ Igrolife”

As a part of the Solidarity Holidays employees of ArcelorMittal can donate a week of their annual vacation to work in a community projects in a foreign country

5 employees for ArcelorMittal Kryvyi Rih participated in the 2015 edition of Solidarity Holidays. The volunteers from Kryvyi Rih travelled to Bosnia Prijedor, Brazil Jus de For a, China Changsha, Kazakhstan and London. They were engaged in community projects involving young children, construction in community, reconciling post conflict communities, managing physically challenged people and working with young children in summer camps.


Scientists and engineers. Pipeline of talented scientists and engineers for tomorrow

09

High-skilled specialists are the key to successful economic development of the Company and its competitiveness, especially in the STEM area (Science, Technology, Engineering and Mathematics). The demand for the specialists in these areas has been on the rise - two-times faster than for other qualifications. STEM develops the skills for research and analytical work, experimenting and critical thinking.



«Hackathon»

Among the most popular competitions is «Hackathon» that was held five times at the plant. It gathers specialists of the Company but university graduates and participants from other cities of Ukraine. Each team has to generate their ideas, during 24 hours and present active programming models and products in IT and automation.

This contest is a powerful tool for employee development. The best 4 university graduates who took part in «Hackathon» were invited for participation in the Company engineering projects in 2015.

Everest program

The aim of the “Everest” program is to search for ambitious and talented young specialists who recently graduated from universities and have a potential to build successful career in ArcelorMittal international company. The “Everest” program is optimized for 2 years, during which participants are suggested a possibility to work in structural units of PJSC ArcelorMittal Kryvyi Rih as trainees with further employment in the company with the plan of career development. The program suggests the participation of trainees in most important corporate projects and also intense theoretical education (on-line courses and classes). For each trainee, an individual plan of rotation within the units of PJSC ArcelorMittal Kryvyi Rih is planned, in some cases, at the international level in ArcelorMittal companies abilities and achievements of a program participant.

Upon the results of contest for graduates in 2014 - 2015, 78 participants of the “Everest” program are currently employed at PJSC ArcelorMittal Kryvyi Rih, acquiring skills in Mining, repairs, sinter and blast furnace processes, rolling and steelmaking operations, logistics, HR management and IT, automation, marketing and sales, purchasing. 56.4 % of participants are employed as FTEs at ArcelorMittal Kryvyi Rih, 34 persons continue their internship at temporary positions in the program, some of them have already got the promotion within company and their career keeps moving.

By providing the support for the development of STEM education, we create the pool of highly professional personnel; we also facilitate the growth of the intellectual capital – the main asset of the country. We also aim to increase the level of occupational education and blue-collar jobs prestige in Ukraine. We cooperate with higher educational institutions, and provide the training opportunity for the university graduates, train and develop our employees.


English language school “SmartStart English with ArcelorMittal” and IT school “SmartStart IT with ArcelorMittal for employees’ children

In 2015 more than 800 children of the Company’s employees had the opportunity to learn in English and IT schools. Children of 6 to 17 who had not learned English and IT subjects before or their knowledge was basic participated in this free training program.

English language school “SmartStart English with ArcelorMittal”

In 2015, ArcelorMittal Kryvyi Rih opened English language school “SmartStart English with ArcelorMittal” for 528 children of the plant’s employees. The students of the free of charge courses are the children who have not studied English at all, or have basic language skills. Based on the results of specialized interviews, all pupils were divided into the small groups by age. Each group consists of 12 children, which allows conducting the learning process more effectively than in a usual school class. The lessons for children are held twice a week at ArcelorMittal University in Ukraine, Kryvyi Rih, and also in another two affiliated town campuses of the school.

IT school “SmartStart IT with ArcelorMittal”

IT school’s free of charge program is divided into two semesters of 4 months long each for 320 children. The pupils are organized into 10 groups of children in the flow. 3 groups included children from 9 to11 years old, 4 groups – 12-14 years old and 3 groups – 15-17 years old.

“More than 800 children of the Company’s employees had the opportunity to study in English and IT schools”



Impact measurement. Our contribution to society measured, shared and valued

10

The Company impact on the socio-economic development of regions through taxes, jobs, interaction with suppliers, sponsorship and charity. In addition, supporting socially important initiatives, the company is not only involved in the solution of socio-economic and environmental problems, but also improves the quality of life of people. Evaluation of the influence and contribution is essential to ensure public trust and local communities and creating a favorable environment for business development.


PJSC ArcelorMittal Kryviy Rih is one of the largest taxpayers in the country and contributes significantly to the economy of Ukraine, Dnipropetrovsk region, Kryvyi Rih. From 2006 to 2015, the company transferred to the state more than UAH 29 bln of taxes and fees. It is more than 10 annual budgets of the city of Kryvyi Rih. Only in 2015, the company has paid to the budget and state trust funds of taxes and fees in the total amount of UAH 8.645 bln.

Taxes and levies paid by PJSC “ArcelorMittal Kryvyi Rih” in 2015 (MUAH)

PJSC ArcelorMittal Kryvyi Rih is one of the major employers in Ukraine. By the end of 2015, the headcount at PJSC ArcelorMittal Kryvyi Rih made 27 139 people. Our Company is the leader in terms of the salary level and social support among Ukrainian steelmaking companies. Based on 2015 results, the average salary is 7 697.5 UAH.

“PJSC “ArcelorMittal Kryvyi Rih” was ranked the second by the volume of tax allocations among the industrial enterprises in Top-100 of the largest taxpayers of Ukraine”

5 645

4 789

4 366

4 195

7 697.5

The average salary at PJSC ArcelorMittal Kryvyi Rih in 2015 versus average salary in Ukraine (UAH)

PJSC ArcelorMittal Kryvyi Rih

Metallurgical enterprises of Ukraine

Industrial enterprises of Ukraine

Dnipropetrovsk region

Ukraine

3.5 bln UAH spent for salary in 2015

34.8 bln UAH spent for payments to contractors and suppliers in 2015

We also make a significant contribution to the development of Ukraine’s economy. We create networking and relations trough sales of products and services and partnership with local contractors and suppliers.

In 2015 approximately 7,000 contract employees were involved in construction and repair activities of the Company.

2015 2014 2013Total, including:

8 645 3 792 2 635

the state budget 3 923 1 021 452municipal budgets 731 658 643import VAT paid at customs clearance of imported raw materials

2 946 1 171 628

unified social tax 1 045 942 912



Transparent good governance

High standards of business ethics and governance have been fundamental to ArcelorMittal, which operates in more than 60 countries, has more than 209,000 employees and works with thousands of suppliers and customers.Good corporate governance provides significant advantages: support reputation, strengthen relationships with government and regulatory authorities, increases the trust of customers and partners. Potential disadvantages of poor management, equally, are real and substantial criminal responsibility and significant financial penalties, to long-term reputational damage and even loss of business. That’s why business ethics and reputation are key assets that must be preserved at all times.

PJSC «ArcelorMittal Kryvyi Rih» is part of international company ArcelorMittal and adheres to the principles of transparency in all the areas of its activity. The Company aims to improve the Corporate Management System with the orientation to the corporate and global best practices.



Employees completed code of business conduct training

% 38,5 14,8 Active promotion of need for compliance training

Employees trained on human rights


Security Department trained on human rights

%71,8 N/A Active promotion of need for

compliance training

Employees trained on anti-corruption

% 2,3 1,4Active promotion of need for

compliance training




Employees completed code of business conduct training


Employees trained on human rights


Security Department trained on human rights

%71,8 N/A Active promotion of need for

compliance training

Employees trained on anti-corruption

% 2,3 1,4Active promotion of need for

compliance training

Corporate Management System

The structure of PJSC «ArcelorMittal Kryvyi Rih» management

The details of the Corporate Management System were given in the previous reports and available on the website ukraine.arcelormittal.com

Business ethics and fighting corruption

As the world’s leading steel and mining company, operating in more than 60 countries, and as a responsible and reliable business partner, ArcelorMittal focuses on compliance of their employees with international standards of business ethics, as well as both international and national legislation (compliance).

ArcelorMittal Code of Business Conduct establishes the unified rules of business conduct for all AM sites, based on ethic and legal standards. According to the Corporate compliance program, once every three years all the Company employees receive Code of business conduct training and commit to comply with its provisions.

ArcelorMittal adheres to the principle of absolute intolerance to any kind of corruption. Anti-Corruption Guidelines are introduced at all AM sites. It means that ArcelorMittal employees, who are exposed to the risk of noncompliance with anti-corruption legislation due to their position, shall know and understand the position of the Company to prevent corruption and fight with it. For instance, in the purchasing process all ArcelorMittal plants are obliged to follow the procedure of open tenders.

In 2015, 631 employees of PJSC ArcelorMittal Kryvyi Rih received Anti-corruption guidelines training.

Human rights

ArcelorMittal always focuses on respect of human rights while doing business.

ArcelorMittal provides mandatory training for the employees on principles of respect and rules of human rights protection at workplace and in the local communities. The training is provided three times a year and it may be in class or online. The average duration of class training is 60-90 minutes; online training takes 60 minutes.

In 2015, 13 456 employees of PJSC ArcelorMittal Kryvyi Rih (49.6% of the headcount as of 01.01.2016) were trained on human rights. During the period from 2013 to 2015, 93% of the total number of employees was trained.

In 2015, 71.86% of the total headcount of Security Department of PJSC ArcelorMittal Kryvyi Rih were trained on Human Rights Policy. During the period from 2013 to 2015, 92.8% of the headcount of Security Department of PJSC ArcelorMittal Kryvyi Rih were trained on Human Rights Policy.

PJSC ArcelorMittal Kryvyi Rih as a responsible employer aims to observe the human rights in compliance with the current legislation of Ukraine. At the Company it is prohibited to use the labor of the persons under 18 for hard and underground work as well as for the works with hazardous or dangerous working conditions. The employment of child is strictly prohibited. The women employment for hard and underground work (except for the works related to hoisting of people and cargos to the mine levels, mining transport control, iron ore sampling, rendering of medical assistance) and the operations with highly harmful or dangerous working conditions, is not allowed. The use of forced labor is strictly prohibited at the Company.

The Company recognizes the right of the employees for freedom of association in political parties and public organizations as well as for participation in trade unions and conducting of collective negotiations. PJSC ArcelorMittal Kryvyi Rih provides all the employees with equal opportunities for realization of their potential at work, fair assessment of their results and achievements, employment and career development on the basis of professional skills.

The Company also implements the programs of social support for the employees in order to ensure the social and economic rights of the employees.

General Shareholders Meeting

Supervisory Board

Chief Executive Officer

Management Committee


Stakeholders engagement

World needs our steel. To ensure this need, we need to support our growth strategy and stabilize relations with the communities in which we operate. Productive relationships with all the stakeholders are essential to our business. Creating a positive dialogue we can better understand expectation of our employees, customers, government officials and local communities. This will help to avoid misunderstandings that could lead to serious disruptions in our business.

Our key stakeholders are employees, shareholders, customers, government and regulatory authorities, local communities. Trade unions, suppliers and contractors, representatives of non-governmental organizations and the media are also important for us. The stakeholders are determined according to AA1000 standard of interaction with stakeholders given criteria: responsibility, influence; proximity, dependency; representation, political and strategic intentions. Thus the most important aspects to us were identified. Understanding their expectations and managing possible risks is one of the basic principles of our concept of sustainable development. The principle of open dialogue, honesty and transparency is the basis of our cooperation with all the stakeholders. For us it is important that employees and external audience could fully and promptly receive information about the activities of our plant and ArcelorMittal. We use the interaction mechanisms that meets the interests of all stakeholders: talks, round tables, conferences, public hearings; survey, focus groups and individual meetings, internal communications, website, “hot line”. Since 2011 we publish reports on the results of our work in accordance with GRI standard. Open to public, on the official website the plant posts its monthly current data on air quality in the area affected by metallurgical, coke production and mining.

Every employee and representative of the stakeholders may report orally or in writing of any violation of our rules and standards, and contact with us through the hotline. All appeals or complaints are considered according to the Law of Ukraine “On citizens’ appeals”.

Participation in associations and unions

ArcelorMittal is one of the largest investors seeking to contribute to the Ukrainian society and its development. PJSC “ArcelorMittal Kryvyi Rih” regularly participates in discussions and search for solutions to the problems faced by businesses in Ukraine, the plant is a member of the European Business Association, American Chamber of Commerce, Federation of Metallurgists of Ukraine, Metallurgprom Business Association.

Long-term cooperation with these organizations provides an opportunity to actively participate in projects related activity of international investors in Ukraine, to protect the own business interests of the plant, to offer programs aimed at improving the investment climate in the country.

“Rating first among 100 Ukrainian companies as per the Transparency and Accountability Index in 2015 by the Center for CSR Developmentі”


About the Report

Scope, boundaries and methodology

This report is for all our stakeholders. Structured around the 10 outcomes it explains our material issues and how we manage them with the aim of having a positive impact on all our stakeholders throughout our value chain.

All data is reported for the period from 1 January to 31 December 2015. Our reporting cycle is annual.The report for 2014 was published in 2015. The report for 2016 will be published in 2017.

The previous reports highlighted our results in terms of 4 pillars of Corporate Responsibility. This year we inform about 10 sustainable development outcomes and what we need to do to achieve them. The name of the report was changed from Corporate Responsibility to Sustainable Development; the structure was built up according to each from 10 sustainable development outcomes.

The report is presented in PDF and online. You can find online report on our website HYPERLINK “http://ukraine.arcelormittal.com”ukraine.arcelormittal.com. We think that is useful, simple and practical way of communication with our stakeholders.

Reporting principles

ArcelorMittal Kryvyi Rih’s sustainable development report was prepared according to Global Reporting Initiative (GRI), 4.0.

We support the reporting principles set out in the GRI G4 guidelines. For defining report content, these are: stakeholder inclusiveness; sustainability context; materiality; and completeness. For defining report quality, these are: balance; comparability; accuracy; timeliness; clarity; and reliability.

Topics described in the report were determined according to their importance for informing stakeholders interesting in activity of ArcelorMittal Kryvyi Rih in Ukraine and ArcelorMittal Group in general. The report includes main events for the reporting period and it does not exclude any essential events and facts.

Throughout our report we identify both the challenges and the opportunities that we face, including open discussion of the disruptions to our business that have occurred during the year. We also report fully on the same indicators as last year, regardless of whether performance has improved or declined.

Reporting methodology

The indicators against which we report are calculated using company guidelines, referred to as the “Basis of reporting” which you can download from corporate.arcelormittal.com


GRI content index

Aspect General standard disclosures ReferenceLink to relevant

pageDisclosure in

report

Strategy and analysis

G4-1 Declaration from the top decision-maker in the organisation

Message from the CEO, p. 10

Organisation Profile

G4-3 Name of organisation Overview of the group p. 6

G4-4 Primary brands, products and services

Overview of the group p. 6

G4-5 Location of the organization’s headquarters


G4-6 Number of countries where the organization operates and names of countries where the organization has significant operations


G4-7 Nature of ownership and legal form Overview of the group p. 6

G4-8 Markets served Overview of the group p. 6

G4-9 Scale of the organization Overview of the group t p. 6

G4-10 Total number of employeesOur performance in

2015, outcome 1,

p. 11p. 18

G4-11 Percentage of total employees covered by collective bargaining agreements

Outcome 1 p. 18

G4-12 Organization’s supply chain Outcome 7, p.37

G4-13 Significant changes during the reporting period regarding the organization’s size, structure, ownership, or its supply chain

There were no changes in the reporting period

G4-14 Precautionary approach or principle

Transparent governance p. 46

G4-15 Externally developed economic, environmental and social charters, principles, or other initiatives to which the organization subscribes or which it endorses

Transparent governance,stakeholders engagement

p. 47

G4-16 List memberships of associations Transparent governance p. 47


Identified material aspects and boundaries

G4-17 Entities included in the financial statement and Sustainability report

ArcelorMittal Group report

corporate.arcelormittal.com/

sustainability/reporting-hub/gri-

indexG4-18 Process for defining the report content and the Aspect Boundaries. Implementation of the Reporting Principles for Defining Report Content


About Report

p. 12p. 49

G4-19 Material aspects identified in the process for defining report content


p. 12

G4-20 Aspect Boundary within the organization for each material aspects


p. 12

G4-21 Aspect Boundary outside the organization for each material aspects



indexG4-22 Restatements of information provided in previous reports

No restatement achieved

G4-23 Significant changes from previous reporting periods in the Scope and Aspect Boundaries.



index

Stakeholder Engagement

G4-24 List of stakeholder groups engaged by the organization


p. 47

G4-25 Basis for identification and selection of stakeholders with whom to engage


p. 47

G4-26 Organization’s approach to stakeholder engagement


p. 47

G4-27 Key topics and concerns that have been raised through stakeholder engagement,and how the organization has responded to those key topics


p. 47


Report profile

G4-28 Reporting period About Report p. 49

G4-29 Date of most recent previous report

About Report p. 49

G4-30 Reporting cycle About Report p. 49

G4-31 Contact point for questions regarding the report

Last page

G4-32 In accordance’ option and GRI Content Index for the chosen option

GRI Index p. 50

Governance

G4-34 Governance structure of the organization

Transparent governance,p. 46;

ukraine.arcelormittal.com- Investors and

Shareholders

Ethics

G4-56 Organization’s values, principles, standards and norms of behavior such as codes of conduct and codes of ethics

Overview of the groupTransparent governance

p. 6p. 46

Economic performance indicators

Economic performance

G4-EC1 Direct economic value generated and distribute

Outcome 8 p. 43

Indirect economic impact

G4-EC7 Development and impact of infrastructure investments and services supported

Outcome 10 p. 45

Procurement practices

G4-EC9 Proportion of spending on local suppliers

Outcome 10 p. 45


Environmental performance indicators

MaterialsG4-DMA Generic Disclosures on Management Approach

Outcome 4p. 26;

56

G4-EN1 Materials used by weight or volume

Our performance in 2015,

p. 26;56

G4-EN2 Percentage of materials used that are recycled input materials

Our performance in 2015, Outcome 4

p.26

EnergyG4-EN3 Energy consumption within the organization


p. 35

G4-EN5 Energy intensityOur performance in 2015, Outcome 6

p. 35

G4-EN6 Reduction of energy consumption


p. 36

Water G4-EN8 Total water withdrawal by sourceOur performance in 2015, Outcome 5

p. 33

G4-EN10 Percentage and total volume of water recycled and reused


p. 33

EmissionsG4-EN15 Direct greenhouse gas (GHG) emissions (Scope 1)


p. 35

G4-EN15 Direct greenhouse gas (GHG) emissions (Scope 1)


p. 35

G4-EN18 Greenhouse gas (GHG) emissions intensity


p. 35

G4-EN21 NOX, SOX, and other significant air emissions


p. 30

Effluents and waste

G4-EN22 Total water dischargeOur performance in 2015, Outcome 5

p. 30

G4-EN23 Total weight of waste by type and disposal method


p. 27


Social performance indicators

Labour practices and decent work

EmploymentG4-LA1 Total number and rates of new employee hires and employee turnover by age group, gender and region

Outcome 1 p. 18

Labour /management relation

G4-LA4 Minimum notice periods regarding operational changes, including whether these are specified in collective agreements

Outcome 1 p. 18

Occupational health and safety

G4-LA6 Type of injury and rates of injury, occupational diseases, lost days, and absenteeism, and total number of work-related fatalities, by region and by gender

Outcome 1 p. 16

Training and education

G4-LA9 Average hours of training per year per employee by gender, and by employee category

Outcome 1 p. 19

G4-LA11 Percentage of employees receiving regular performance and career development reviews, by gender and by employee category

Outcome 1 p. 19

G4-LA12 Composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority group membership, and other indicators of diversity

Outcome 1 p. 18


Human rights

Investment

G4-DMA Generic Disclosures on Management Approach Transparent governance p. 46

G4-HR2 Total hours of employee training on human rights policies or procedures

concerning aspects of human rights that are relevant to operations, including the

percentage of employees trained


Non-discrimination

G4-HR3 Total number of incidents of discrimination and corrective actions

takenOutcome 1 p. 18

Child labour

G4-HR5 Operations and suppliers identified as having significant risk for incidents of child labor, and measures taken to contribute to the effective

abolition of child labor

Organization does not use child labour. The activity with great risk of use of child labour has not been revealed

Forced or compulsory labour

G4-HR6 Operations and suppliers identified as having significant risk

for incidents of forced or compulsory labor, and measures to contribute to

the elimination of all forms of forced or compulsory labor

Organization does not use forced or compulsory labour. The activity with great risk of use of forced or compulsory labour

has not been revealed

Security practices

G4-HR7 Percentage of security personnel trained in the organization’s human rights policies or procedures that are relevant to

operations.


Society

Anti-corruption G4-SO4 Communication and training on anti-corruption policies and procedures Transparent governance p. 46

- fully disclosed - partially disclosed


SD Data table 2015

Metric Value PerformanceCrude steel production tonnes (million) 6,3 6,0

1. Safe, healthy, quality working lives for our people 2014 2015

Number of employees - total 29 131 27 139

Fatalities - total number 1 2

Lost-time injury rate per million hours worked 0.52 0.35

Lost day rate % 5.8 4.4

Occupational disease rate % 0.17 0.17

Absenteeism rate - total % 3.57 3.37

Employee turnover rate % 2.0 2.2

Number of strikes exceeding one week in duration number 0 0

No. training hours per employee hours 68 852. & 3. Products that accelerate more sustainable lifestyles and create sustainable infrastructure

Research and development spend (ArcelorMittal Group) $ (million) 259 227

Raw materials used by weight:

- Iron ore million tonnes 25.1 24.5

- Coal million tonnes 2.5 2.6

- Coke million tonnes 1.7 1.9

Recycling input rate % 30% 30%

Steel scrap recycled million tonnes 1.9 1.8

CO2 avoided from steel recycled million tonnes 2.4 2.3

Production residues and by-products re-used % 52 51

BF slag to cement industry million tonnes 0.8 0.7

CO2 avoided from slag re-use in cement industry million tonnes 0.6 0.5

5. Trusted user of air, land and water

Environmental and energy capital expenditure (million) 718.4 859.5

Air

Total dust emissions thousand tonnes 41.9 36.5

Dust emissions (steel) per tonne kg/tonne of steel 6.7 6.0

NOx thousand tonnes 8.9 12.8

NOx (steel) per tonne kg/tonne of steel 1.4 2.1

SOx (steel) thousand tonnes 8.0 7.9

SOx (steel) per tonne kg/tonne of steel 1.3 1.3


Land

Production residues to landfill/waste (steel) %

Water

Water intake* m3 per tonne of steel 8.2 9.1

Net water consumption* m3 per tonne of steel 7.7 8.5

6. Responsible energy user that helps create a lower carbon future

Energy intensity (steel)* GJ/t liquid steel 20.1 20.0

Primary energy consumption million GJ (PJ) 140.6 135.4

Total CO2e footprint million tonnes CO2e 13 14

CO2 intensity (steel) tonnes CO2 per tonne

of steel 2.1 2.2

7. Supply chains our customers trust Global procurement suppliers evaluated against code for responsible sourcing number 328

8. Active and welcomed member of the community

Estimated direct economic contribution (million) 32 909 43 452

payments to government of which:

- State budget (million) 1 021 3 923

- Municipal budgets (million) 658.0 731.0

- Employee salaries, wages and pensions (million) 3 224.4 3 494.5

- Supplier and contractor payments (million) 25 861 34 784

- Capital expenditure (million) 2.9 5.17 - Community investment spend

(including STEM spend) (million) 28.6 18.3

- Other payments (million) 2 113 3 9919. Pipeline of talented scientists and engineers for the future

% community investment allocated to developing scientists and engineers 9.3%

Investment in STEM projects (million) - 1.7

10. Our contribution to society measured, shared and valued

CR reporting according GRI + +

Transparent good governance % of employees completed code of business conduct training % 38.5 14.8

% of employees trained on human rights % 49.6 29.1

% of security trained on human rights % 71.8 N/A

% of employees completed anti-corruption training % 2.3 1.4


Published in June 2016.

РJSC ArcelorMittal Kryvyi Rih 50095, Ukraine, Dnepropetrovsk region, Kryviy Rih, Ordzhonikidze st., 1

We welcome your feedback on this report. Please send it to [email protected]

Рjsc “arcelormittal kryvyi rih” 50095, ukraine, dnepropetrovsk … · 2016-07-01 · ukraine....

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