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CHANGING LANDSCAPESREPORT TO SOCIETY 2005

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CASE REPORT 1 04 - 05

BIODIVERSITY HEALTH & SAFETY WATER USE COMMUNITY & EDUCATION

A look at some of the many ways in which we are helping to encouragebiodiversity and restorenatural habitats across the UK.


In 2005 Tarmac investedheavily in new equipmentand devised innovative waysof working to ensure thathand arm vibration doesn’tcompromise the health ofour workforce.


Our new ‘reservoirpavement’ technology –Tarmac Aquifa™ – is set toreduce the risk and costs offlash flooding through itsenvironmentally friendlydrainage system.


Tarmac’s Millennium Eco-Centre near Wrexhamis helping to promotesustainable living and raise awareness ofenvironmental issues acrossthe wider community.


WELCOME TO TARMAC’S REPORT TO SOCIETY FOR 2005. AS A BUSINESS, WE PLAY AN ESSENTIAL ROLE IN PROVIDINGSOCIETY WITH THE RAW CONSTRUCTIONMATERIALS WHICH MAKE UP THE FABRIC OF OUR DAILY LIVES.

As well as our commercial considerations, we are guided by astrong sense of responsibility for the health and safety of ouremployees, for the environment and for the communities wework in and society as a whole. We’re also committed tocommunicating openly and honestly on our performance inthese different areas and to sharing our vision of where we areheading. We have produced this report to give our customers,regulators, employees and neighbours, as well as localcouncillors, planners and MPs, an accurate understanding of the efforts we are making to manage our business responsibly.

In this, our 11th report of its kind, we’ve begun with four in-depth case studies which give an insight into some of ourrecent innovations and policies at work. Towards the back of thereport, you’ll find detailed data and analysis of our performancein the different sectors before a final word from our CEO.

We hope you’ll find it informative, engaging and even inspiring.Although we’ve achieved much already, we’re constantlylooking at how we can continue to improve, because in Tarmac, we believe the foundations of the future are laid today.

CONTENTS

INTRODUCTION 01

ABOUT TARMAC 02 - 03





SAFETY 12 - 14

HEALTH 15 - 16

ENVIRONMENT 17 - 20

SOCIETY 21 - 23

A MESSAGE FROM OUR CEO 24

INTRODUCTION 01


Our products are in use almost everywhere you look: in roads, buildings and infrastructureprojects of course, but also in paper, glass,cosmetics and many more sectors besides. As well as providing essential materials for all types of industry, we’re also a major supplier of contract construction services for both the public and private sectors.

WHO WE AREWe have a rich history and an exciting future.More than 100 years ago, we invented themodern road surface ‘tarmacadam’. Over theyears, we have grown and diversified significantly;in 2000, we became a part of Anglo American plc– one of the world’s largest mining and naturalresources companies.

Working within Anglo American’s IndustrialMinerals division, we employ more than 12,000people and achieved a turnover of £1.4 billion in 2004. We are the leading supplier of buildingmaterials in the UK, and have also establishedsignificant international operations in continentalEurope, the Middle East and Asia.

The countries in which Tarmac operated in 2005are: UK, Eire, France, Belgium, Germany, Spain,Poland, Czech Republic, United Arab Emirates,Oman, India, China and Hong Kong.

WHAT WE DOOur business has evolved dramatically over morethan a century. From producing the road-surfacingmaterial from which our name is derived, we nowserve a variety of industry sectors that impact onvirtually every aspect of daily life. An overview ofour products, services and their related uses isprovided on the opposite page.

WHAT WE BELIEVEAs a business, we are focused on providing ever-higher standards of service and value to ourcustomers wherever we operate.

At the same time, we are committed to investing in our employees – helping them to realise theirpotential while providing a safe and healthyenvironment in which they can work.

We look to grow our business in a sustainable andresponsible manner, providing our shareholders witha good return on their investment. We also believewe have a responsibility to play a positive role in thecommunities in which we work and to be a leader in environmental management.

This report looks at our performance in safety,health, environment and social matters across2005, and the plans that are in place to improveour performance in all these areas.

TARMAC IS A LEADING PROVIDEROF MATERIALS, PRODUCTS AND SERVICES USED BY THECONSTRUCTION INDUSTRY TOCREATE AND SUSTAIN THE SOCIETY WE LIVE IN.

ABOUT TARMAC02 ABOUT TARMAC


PRODUCT OR SERVICE USED FOR

AGGREGATES:

CRUSHED ROCK, SAND AND GRAVEL

• ROAD CONSTRUCTION• BUILDING AND INFRASTRUCTURE FOUNDATIONS• PRODUCTION OF CONCRETE AND ASPHALT

ASPHALT

• MOTORWAY CONSTRUCTION• AIRPORT RUNWAYS• SPORTING ARENAS• CAR PARKS AND DRIVEWAYS

READY-MIXED CONCRETE • CONSTRUCTION PROJECTS

MORTAR AND SCREEDS • SMALL-SCALE BRICK-LAYING PROJECTS• MAJOR HOUSE-BUILDING SCHEMES

CEMENT • PRODUCTION OF CONCRETE AND CONCRETEPRODUCTS FOR THE CONSTRUCTION INDUSTRY

LIME

• LAND REMEDIATION• WATER TREATMENT PROJECTS• PRODUCTION OF FIBREGLASS, TOOTHPASTE,

SUGAR, GLASS, LEATHER, IRON AND STEEL

RECYCLING SERVICES

• RECYCLING WASTE MATERIALS FROM THECONSTRUCTION INDUSTRY AND ALSO THE IRON AND STEEL INDUSTRY

• PRODUCING A RANGE OF RECYCLED AGGREGATESAND BLENDED MATERIALS FOR REUSE

KEY FACTS

WE INVESTED £110 MILLION

IN A NEW CEMENT PLANT AT

BUXTON, UK

WE HAVE PLANTED MORE

THAN 110,000 TREES IN

THE LAST FIVE YEARS

IN 2005 WE PRODUCED

76.8 MILLION TONNES

OF AGGREGATES

WE OPERATE 37 RECYCLING

SITES WORLDWIDE

WE HAVE OVER 12,000

EMPLOYEES WORLDWIDECONSTRUCTION CONTRACTING SERVICES

• ROADS• FOOTPATHS AND CYCLEWAYS• INDUSTRIAL OR BUSINESS PARKS• MULTI-STOREY CAR PARKS AND

COMMERCIAL DRIVEWAYS• FENCING, SIGNING, LIGHTING AND

TRAFFIC MANAGEMENT

CONCRETE PRODUCTS

• CONCRETE BLOCKS FOR WALLING, STRUCTURALFLOORING AND DECORATIVE PAVING

• SPECIALIST PRE-CAST PRODUCTS FOR TUNNEL, RAILAND CIVIL ENGINEERING PRODUCTS

ABOUT TARMAC 03


CASE REPORT 1:

BALANCING BUSINESS WITH BIODIVERSITY

THE VERY NATURE OF OUR BUSINESS HAS THE POTENTIAL TO DAMAGE ORDESTROY A RANGE OF PLANT AND ANIMAL LIFE IN A HABITAT, SO ACROSS OURUK SITES, WE ARE WORKING HARD TO ENCOURAGE BIODIVERSITY – FROMKESTRELS NESTING IN A HOPPER IN BOLTON TO CREATING A WILDFLOWER BANKAT WOLVERHAMPTON. AND ALTHOUGH COMMITMENT TO ENVIRONMENTALPERFORMANCE IS COMPANY POLICY, COLLEAGUES HAVE REQUIRED LITTLEENCOURAGEMENT TO GET INVOLVED.

“There is a distinction between conservation andrestoration. We might have to take out a hedgerowbut if, at the same time, we create ponds andbanks for sand martins, we’re still encouraging an overall gain.”

ANDY CRAWSHAW Group Sustainable Development Manager, Tarmac

“We have to do our research and a lot of forwardplanning to make sure our work doesn’t disruptnesting birds. It’s not just legislation – there’s agenuine interest among quarry people toencourage wildlife. It’s a more pleasing andrewarding way of working.”

GEORGE ELLIOTT Restoration Manager – Midlands andNorth West, Tarmac


04 - 05BIODIVERSITY

AN ONGOING COMMITMENT We address environmental issues throughout the extraction process, from planning throughextraction to handover after restoration iscompleted. An Environmental Impact Assessment is carried out at the planning stage, to evaluate thepositive and negative impacts of our developments.We have an ongoing commitment to increasebiodiversity through our operations and build this into our planning.

It is inevitable that our business, and quarrying inparticular, causes environmental change; thechallenge is to reduce its impact on wildlife, or eventurn it into an opportunity to restore vanishinghabitats. It isn’t a mathematical evaluation; wildlifecan’t be measured in the same commercial termsas aggregates. But valuable habitats such aswetlands, heathlands and grasslands can berecreated to support a wide variety of flora andfauna, including many endangered species.

BACKING THE BITTERN AT LANGFORD QUARRY The bittern is a medium-sized heron, standing atjust over two feet tall. In 1997, just 15 bitternsexisted in the UK. By 2004, numbers had increasedfivefold, thanks to the work of organisations suchas the RSPB and English Nature. But we have alsohad a role to play. At our busy Langford sand andgravel quarry in Nottinghamshire, reed beds arebeing restored, and the bittern is slowly returningto the area. Working with the RSPB, we restoreand prepare previously excavated land ready forthe planting of reeds. The RSPB then manages and monitors the land and the wildlife it attracts.

ACTION PLANSAt a number of our quarries, including Mancetter inWarwickshire, areas have been designated as Sitesof Special Scientific Interest (SSSIs) in recognition oftheir rich biodiversity. Mancetter is also one of thesites with a Biodiversity Action Plan (BAP) already inplace. This provides a framework within which wehave developed targets and a strategy forprotecting and maintaining the environment.

There’s no legal obligation for BAPs at the momentbut, as a responsible company, we are committedto putting BAPs in place at over 200 of our activemineral operations worldwide by 2008. Wecompleted 11 in 2005 and there are plans tocomplete another 70 in 2006. The Estates andSustainable Development departments work withecology specialists and operational management todevelop site-specific BAPs and, once completed,they will be managed as part of our environmentalmanagement system.


CASE REPORT 2:

KEEPING HAV AT ARM’S LENGTH

INTRODUCED IN 2000, OUR ZERO TOLERANCE CAMPAIGN IS FOCUSED ONPROTECTING THE HEALTH AND SAFETY OF OUR EMPLOYEES AGAINST ALL KINDS OF WORKPLACE RISKS. AS A PART OF THIS, TARMAC HAS BEENINVESTING HEAVILY IN NEW EQUIPMENT AND DEVISING INNOVATIVE WAYS OF WORKING TO REDUCE EXPOSURE TO DANGEROUS LEVELS OF HAND ARM VIBRATION (HAV), WHICH CAN RESULT FROM ACTIVITIES IN THE CONSTRUCTION AND RELATED INDUSTRIES.

BAD VIBRATIONSGo to any construction site, quarry or roadworksproject and sooner or later you are likely to see ajack-hammer at work. These pneumatic excavatorshave long been considered essential in breaking up existing surfaces in preparation for newconstruction or repair work.

Nevertheless, jack-hammers – alongside othervibrating hand tools – can transmit significant levelsof vibration back through the equipment to theusers’ hands and arms. Through prolonged exposureto HAV, damage can be caused to the bloodcapillaries and nerve endings. The consequentreduction in manual dexterity and, in extreme cases,chronic pain due to poor circulation is the conditionknown as Hand Arm Vibration Syndrome (HAVS).

REDUCING RISKWith up to one million people in the UK exposedto potentially dangerous levels of HAV, this is anissue we take very seriously indeed. Building onour position as a leader in workplace health andsafety, we have developed a comprehensive andinnovative response that we believe will ultimatelyeradicate the risk of HAVS across our organisation– and act as an example of best practice to otheremployers in this sector.


By looking at the problem in its entirety, werealised that only a multi-faceted approach could successfully reduce exposure to HAV to an acceptable level. This focuses on:

• Eliminating unnecessary tasks• Limiting the amount of time spent using

particular equipment• Using only approved ‘low-vibration’ equipment• Detailed monitoring of employees’ exposure to HAV• Clear training and communication on the everyday

risks associated with HAVS.

BETTER EQUIPPEDIn 2005, a comprehensive survey of all our toolswas undertaken to assess the degree to which they transmit HAV. We conducted tests to find the lowest-vibration tools on the market, and havesince approved a budget to replace equipment with approved models across our business.

In another major development, we are looking to dramatically reduce the use of hand-held jack-hammers by rolling out the JCB 2CX Streetmasteracross our operations. Trialled in our West Midlandsoperation in 2005, the Streetmaster uses a cabin-operated backhoe attachment to complete more

“With new equipment in place and a comprehensivenew monitoring system about to be rolled out,Tarmac is leading the field in its attempts to minimisethe risks from HAV.”

KEN BRADLEY National Contracting Sustainable DevelopmentManager, Tarmac

than 80% of tasks previously requiring a jack-hammer. Following the trials and anawareness day for all the business areas hosted by JCB, 73 Streetmasters have already beenearmarked for roll-out across the business in thefirst quarter of 2006 as the start of a significantshift in our ways of working.

TIME FOR TAGSTo complement our investment in new low-vibration equipment and tools, in 2005 we’veintroduced an effective yet easy-to-use ‘tag’system, which will help employees to understand,monitor and control their exposure to HAV inwhatever situation they are working.

Following on from our equipment survey, we’vehad tags specially produced for all our equipmentspecifying weight, noise level and vibration level.To help employees calculate how long they canuse different pieces of equipment for withoutexposure to dangerous levels of HAV, a simplepoints system is used. The points marked on anitem’s tag are accrued by the employee per tenminutes of use; no more than 100 points shouldbe accumulated by one person across all types ofequipment on any one day.

To help signpost the risks, tags have been colour-coded in red, amber and green to represent high,medium and low vibration levels. To be rolled outacross our workforce from early 2006, we believethis system represents another milestone in ourongoing commitment to protecting the health ofour employees as a priority in everything we do.

06 - 07HEALTH & SAFETY


OPTION 2

OPTION 1

COLLECTED ‘GREY’ WATER IS RECYCLED FOR NON-DRINKING USES SUCH AS FLUSHING TOILETS, WASHING CARS, WATERING GARDENS, LAWNS AND FARMS, ETC

WATER IS PURIFIED BY BACTERIA IN THE GEOTEXTILE FABRIC LAYER

WATER SOAKS AWAY INTO THE SUB-SOIL

THE NON-POROUS MEMBRANE ALLOWS PURIFIED WATER TO BE COLLECTED FOR RECYCLING

FREE-DRAINING ASPHALT SURFACING

UNIFORMLY GRADED AGGREGATE WITH 30% VOIDS TO STORE STORM WATER

CASE REPORT 3:

’CLEVER PAVEMENTS’ FIGHT FLOODING


NATURAL PURIFICATIONAble to absorb up to 30% of its volume, Tarmac’sAquifa™ system allows water to permeate throughthe surface and collect in a ‘geotextile’ layer ofnaturally occurring bacteria. Here, impurities such as oil are broken down, sand and silt aretrapped, and harmful heavy metals removed.

The rate the purified water is released into existingdrainage can be controlled to reduce the risk of flooding. It can be released to permeate intonatural watercourses or alternatively, fed intoirrigational systems as ‘grey water’ – purified, but not of filtrated drinking quality – then captured andrecycled for other purposes such as flushing lavatories.This will help to conserve household drinking water,30% of which is currently flushed away.

A UK FIRSTWith a patent pending, we are the first to the UKmarket after successful trials in Wolverhampton and Bristol, working with the Transport ResearchLaboratory in line with the Environmental Agency’sSustainable Drainage Systems (SUDS) strategy andguidelines. We developed the Tarmac Aquifa™technology to be used in housing developments,retail and business parks, and car parks.

Similar technology has been successfully used in the United States and France over the last 20 years. In Bordeaux, for example, over 400conventional drainage systems were replaced with reservoir pavement technology followingtorrential downpours in 1982.

FLASH FLOODING CAUSES MISERY TO THOUSANDS AND COSTS THEINSURANCE INDUSTRY MILLIONS OF POUNDS, BUT TARMAC’S NEW‘RESERVOIR PAVEMENT’ TECHNOLOGY,TARMAC AQUIFATM, COULD MAKESUCH OCCURRENCES A THING OF THE PAST. THE NEW MATERIAL HOLDS,PURIFIES AND RECYCLES RAINWATER,AND COULD EVEN SIGNAL THE ENDFOR THE TRADITIONAL DRAINAGESYSTEMS OFTEN OVERWHELMED BY TORRENTIAL DOWNPOURS.

“With nearly two million new homes required overthe next 10 years and strong scientific evidencethat the UK will experience warmer, wetterwinters, the chance of more flash floods is a major concern for the construction and insuranceindustries. This product is a highly absorbent,robust and flexible material developed to withstand a 100-year storm.”

CLIVE FREEMAN Director, Tarmac Infrastructure Solutions (TIS)

“The system deals with the extreme effects of globalwarming, in that it prevents flash flooding, but alsoconserves valuable drinking water at times ofpotential drought.”

DR HOWARD ROBINSON Head of Product Development, Tarmac

08 - 09WATER USE


CASE REPORT 4:

CONSERVATION AND THE COMMUNITY

WORKING WITH SCHOOLS AND THE WIDER COMMUNITY IN NORTH WALES,SHROPSHIRE AND CHESHIRE, TARMAC’S MILLENNIUM ECO-CENTRE HELPS TORAISE LOCAL AWARENESS OF THE IMPORTANCE OF RECYCLING AND WASTEMANAGEMENT, IMPROVES ENVIRONMENTAL KNOWLEDGE AND HIGHLIGHTS THE IMPORTANCE OF A MORE SUSTAINABLE LIFESTYLE THROUGHVOLUNTEERING AND EDUCATION.

AN OUTDOOR CLASSROOMThe Eco-Centre was established in 1998 atTarmac’s Borras Quarry in Wrexham and attractsaround 10,000 visitors a year. It combines keystage education with volunteer work, andpromotes sustainable environmental practicesdesigned to involve the whole community.

Our main involvement is to manage the quarry lifecycle programme, a long-term scheme to coordinate the quarry’s restoration and preservation, aided by local businesses, and teachers and pupils from a local school, St Christopher’s.

For example, the schoolchildren are involved in anextensive planting scheme, helping to transformthis former airfield into a woodland of trees nativeto the immediate area – elder, ash, bay willow,English elm, birch, etc.


“We’ve had visitors from around the globe at the centre, and can be proud to have such a successful environmental facility in the Wrexham area.”

NICK BALL Quarry Manager, Borras

“It’s a friendly place where people are welcome tostop by, have a cup of tea and see what’s goingon. Most of the people who get involved hearabout us by word of mouth.”

JASON ORME Project Manager, Millennium Eco-Centre

“The Welsh Assembly award recognises all the hard work that so many people have put into the centre. It really is a fantastic facility for thesurrounding community, and the funding gives the centre a promising future, ensuring it will be a positive influence to many more people.”

ANDY SWINNERTON Area Operations Manager, Tarmac

Other hands-on educational experiences, includingdry-stone walling and willow weaving workshops,also reinforce classroom learning.

Volunteering is the other important aspect of theEco-Centre, with community allotments and workplacements attracting volunteers interested inrestoration and conservation work from as faraway as Bulgaria and South Africa.

EXTRACTING FUNDSThe Eco-Centre was also awarded £250,000 from the Welsh Assembly’s Aggregates LevySustainability Fund. The fund, introduced in April 2002, is awarded to projects promoting anunderstanding of issues arising from aggregateextraction, and reducing its local impact.

10 - 11COMMUNITY & EDUCATION


SAFETY

ACROSS OUR DIFFERENT OPERATIONS, WE WORK IN A VARIETY OF POTENTIALLYHAZARDOUS ENVIRONMENTS, WHICH PRESENT RISKS ASSOCIATED WITH LARGEVEHICLES, ROCK FACES, HEAVY MACHINERY, EXPLOSIVES AND MORE BESIDES.NEVERTHELESS, WE FIRMLY BELIEVE THAT OUR OPERATIONS SHOULD NOT GIVERISE TO ANY INJURIES TO EMPLOYEES, CONTRACTORS OR THIRD PARTIES – THIS IS A PRIORITY IN EVERYTHING WE DO.

Tragically in 2005 we suffered a fatality in theworkplace. This is a matter of utmost concern to us and is of course an unacceptable breach of our high standards in safety management.While we have already made great strides towards our ultimate target of zero injuries in the workplace, there is still much to be done.Consequently, we have revised our strategy, as outlined later in this report.

A CULTURE SHIFT: 2000 TO 2005After our acquisition by Anglo American in 2000,we developed a comprehensive five-year strategyto radically transform the safety culture acrossTarmac with the aim of eradicating all injuries and unsafe behaviour.

In the five years since its implementation, this hasresulted in dramatically improved performanceagainst a variety of key targets and, just asimportantly, the creation of a ‘safety first’ culturethroughout our business in which incidents andinjuries are avoided through good managementand adherence to safe working practices.

We have achieved an 83% reduction in the LostTime Injury Frequency Rate (LTIFR*) in this five-year period – a quantum leap in performancewhich many considered unachievable.

PERFORMANCE IN 2005We suffered one fatal injury. Our belief is that it is only if we free the workplace of all unsafe actsand conditions that we will be sure to avoid fataland serious injuries.

In 2005, our LTIFR has decreased from 0.67 in2004 to 0.62 in 2005 – a 7.5% year-on-yearimprovement. We acknowledge that this representsa gradual slow-down in the rate of improvementseen in the context of a five-year period.

Our Lost Time Injury Severity Rate has reduced from445 in the year 2000 to 240 in 2005. This is anoverall improvement of 46% and testament to ourcontinued commitment to the target of zero injuriesin the workplace.

OUR PERFORMANCE IN 2005

IN THIS SECTION

– A CULTURE SHIFT: 2000 TO 2005

– PERFORMANCE IN 2005

– SAFETY STRATEGY 2006 AND BEYOND

– TARMAC SAFETY FILM WINS INTERNATIONAL AWARD

12 SAFETY


We also set ourselves a target for a minimum of94% of our sites to be injury free in 2005. Acrossthe 12 months, we achieved injury-free status across 92% of our sites, compared to 89% in 2004.Regrettably, we did not meet our target, but thereis nevertheless a significant improvement over2004. The fact that such a large proportion of oursites have already achieved injury-free status is apositive indication that this is a realistic andattainable goal.

SAFETY STRATEGY 2006 AND BEYONDThroughout 2005, we have been developing a revised safety strategy in collaboration with Anglo American. This will build on thestrengths of our previous strategy while, at the same time, addressing our weaknesses and areas for improvement.

The new strategy represents a new and significantphase in our approach to safety managementacross all our operations. It supports our goal of creating an interdependent safety culture,where every member of our workforce takesresponsibility both for their own safety and for the safety of others.

CULTURE: ZERO MINDSET•We believe that all injuries and occupational

illnesses are preventable.

•We are all responsible for preventing andcorrecting unsafe behaviour or work conditions.

LEARNING: NO REPEATS•All unsafe practices and incidents will be

investigated to determine what happened and why.

•All necessary steps will be taken to prevent a recurrence.

STANDARDS: SIMPLE, NON-NEGOTIABLESTANDARDS AND RULES

•We will adopt common, simple and non-negotiable standards and rules across our group.

The new strategy is being launched andimplemented over the next two to three years. We believe it will help us to deliver a step changein our safety performance and help to shape theway we work for years to come.

2000

2002

2003

2004

0.88

0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0

0.62

2001

0.67

1.39

2.31

2005

3.57

*Lost Time Injury Frequency Rate

Lost Time Injuries (LTIs) x 200,000

Man hours worked

TARMAC GROUP LTIFR 2000–2005

SAFETY 13

Lost Time Injury Any injury that results in someone losing morethan one full shift following an incident butwhich does not include any time lost on the dayof the incident itself.


TARMAC SAFETY FILM WINS INTERNATIONAL AWARD

Strong and effective safety communications areessential to the success of our safety strategy, sowe use a wide variety of methods to get our coremessages across. In 2005, we brought to life theimplications of not working safely in two dramaticsafety films: Once Too Often Dave, which followsthe misfortunes of three colleagues whorepeatedly ignore the safety warnings of theirsupervisor; and Never Walk By, a film, createdspecifically for the National Contracting gangscarrying out resurfacing work, which highlights the hazards associated with this activity.

Once Too Often Dave scooped three awards atthe 2005 US International Film Festival includingthe top prize for an employee safety film, theGolden Camera Award. More importantly, it isbeing shown across Tarmac sites in the UK andalso forms part of the site induction process forcontractors, new recruits and visitors – playingan important role in helping to create andmaintain our strong safety culture.

0 100 200 300 400 500 600

2005

2004

2003

2002

2001

2000

240

266

319

308

544

445

Lost Time Injury Severity Rate

Days lost due to Lost Time Injuries (LTIs) x 200,000

Man hours worked

TARMAC GROUP LTISR 2000–2005

14 SAFETY


IN THIS SECTION

– OCCUPATIONAL HEALTH STRATEGY

– HEALTH SCREENING

– HAND ARM VIBRATION

– LOOKING FORWARD: 2006 AND BEYOND

HEALTH

ALONGSIDE THEIR PHYSICAL SAFETY, WE REGARD SAFEGUARDING THE HEALTHOF ALL OUR EMPLOYEES AND CONTRACTORS AS A KEY PRIORITY. TO ACHIEVETHIS, WE TAKE A PROACTIVE APPROACH TO OCCUPATIONAL HEALTH ISSUES ANDHAVE INTRODUCED PREVENTATIVE MEASURES TO COMBAT HEALTH RISKSACROSS ALL ASPECTS OF OUR BUSINESS.

OCCUPATIONAL HEALTH STRATEGYWorking in heavy industries, our businesses canpresent a range of potential health hazardsincluding noise, dust, hand arm vibration and skinirritants. We take these and other such risks veryseriously indeed, aiming to eliminate exposure tohazards or, where this is not possible, to controlexposure at levels which will not cause harm.

Following its launch in 2004, we continued toimplement our new Occupational Health Strategyin 2005 throughout the different Tarmacbusinesses. Based on the Anglo AmericanOccupational Health guidelines, the strategy setsout a rigorous and comprehensive approach toeliminate the conditions and behaviours that cause health risks across our workforce.

In 2005, each of our businesses completed anoccupational health risk assessment to identify and, where possible, eliminate health risks for allemployees. This included reviews of occupationalhygiene, risk and health monitoring data in eachbusiness, with the goal of creating a newbenchmark against which future performance can be measured.

HEALTH SCREENINGWe believe that effective health screening is anessential part of our Occupational Health Strategy,helping us check the effectiveness of controlmeasures, monitor performance, and modifybehaviours and working practices where appropriate.

Through our rolling three-year health screeningprogramme, we have established an accuratebaseline of performance indicators, which enablesus to focus on key areas of priority as and whennecessary. In particular, we have been looking atthe prevalence of four conditions historicallyassociated with working in the construction,building products and mineral extraction industries:

NUMBER OF EMPLOYEES AFFECTED

NOISE-INDUCED HEARING LOSS 2,535

HAND ARM VIBRATION SYNDROME 446

DERMATITIS 12

OCCUPATIONAL LUNG DISEASE 4

HEALTH 15


Employees with these conditions have notnecessarily acquired them from working at Tarmac– we have had strict preventative measures in placefor many years to help avoid such occurrences.Many cases are in fact a legacy of years spentworking in heavy industries – possibly for a numberof employers – in environments that would notmeet today’s more health-conscious standards.

While we cannot change the past, we arecommitted to safeguarding the health of ouremployees to the best of our abilities. As a part ofour new Occupational Health Strategy, we have setourselves the goal of eliminating any new cases ofnoise-induced hearing loss, Hand Arm VibrationSyndrome (HAVS), dermatitis and occupational lungdisease that can result from workplace activities.We have introduced important measures and waysof working to achieve this aim and we will bereporting on our performance in due course.

HAND ARM VIBRATIONIn the construction and related industries, use ofhand-held pneumatic tools has long been aneveryday feature of workers’ lives. However, thesetools are not without risks; excessive use can leadto cases of HAVS, which in turn may cause reducedmanual dexterity, poor circulation and chronic pain.

HAVS is an issue we have always taken veryseriously, and we have strict guidelines in place toavoid hazardous levels of exposure. In 2005, wemade some major strides forward in this area. With the trialling of new equipment and new ways of working, we believe we can eradicatecompletely the risk of HAVS across our workforce –see our Case Report on pages 6 and 7 for details.

LOOKING FORWARD: 2006 AND BEYOND2005 is the first year in which we have begungathering accurate totals of cases of work-related illhealth across the group. The figures that we reporton this year will provide us with a starting pointfrom which we can measure our progress insubsequent years. We will continue to refine andbuild on the data that we have now begun togather, monitoring the progress of existing casesand any new cases that arise.

16 HEALTH


ENVIRONMENT

AT TARMAC, WE ARE COMMITTED TO OPERATING IN AN ENVIRONMENTALLYRESPONSIBLE MANNER BY UNDERSTANDING AND CONTROLLING THE IMPACTSOF OUR OPERATIONS IN BOTH LOCAL AND GLOBAL CONTEXTS. OUR GOAL ISONE OF CONTINUOUS ENVIRONMENTAL PERFORMANCE IMPROVEMENT ACROSSALL ASPECTS OF OUR BUSINESS AND THE ONGOING DEVELOPMENT OFSUSTAINABLE PRACTICES WHEREVER WE ARE WORKING.

IN THIS SECTION

– ENVIRONMENTAL MANAGEMENT

– RESOURCE USE

– CLIMATE CHANGE

– WASTE MANAGEMENT

– GARSTANG CONCRETE PLANT

– BIODIVERSITY

– WATER USE

– LOOKING FORWARD: 2006 AND BEYOND ENVIRONMENTAL MANAGEMENTWorking in quarrying and other related industries,we recognise that the nature of our business canhave significant effects on the environment. For thisreason, we have developed a strategic approach toenvironmental management, which aims tominimise any negative effects and increases thepositive impacts of the work that we do.

In the last few years we have introduced site-specific environmental management systems across over 660 of our industrial sites worldwide.These systems ensure that we have a consistentand effective approach across a geographicallydiverse group operating in 12 countries.

Alongside this, we have also set ourselves thetarget of achieving third-party accreditation to ISO 14001 – the recognised international standardfor environmental management systems – across allour industrial locations by 2007. During 2005, weachieved ISO 14001 certification in a further 53sites, bringing us to a total of 523 certified sitesout of a total of over 680 worldwide.

RESOURCE USEWe are very much aware of the lifecycle of ouroperations throughout the different aspects of ourbusiness, and this applies equally to the naturalresources we use in our products.

While such geological resources are finite, Tarmac’sproducts are not simply ‘consumed’ when used inconstruction. In fact they are often recycled whenbuildings and roads come to the end of their lifeand used again to build the new houses, roads,schools and hospitals that are needed to sustain our society.

The challenge for a responsible business such asTarmac lies in finding locations where quarrying is both economically viable and can be madeenvironmentally acceptable – our EnvironmentalPolicy helps us to decide when and where this is possible.

ENVIRONMENT 17


CLIMATE CHANGEIt is widely recognised that climate change is amajor global issue and that the use of fossil fuels is a contributory factor in this process. We take this issue very seriously indeed and believe that it is the duty of every business and every employee to act responsibly and proactively with regard toenergy consumption.

We also believe that, as energy costs continue torise, any reduction in our overall energy use makessound business sense as well as helping to addressimportant environmental concerns.

In 2004, Tarmac UK produced an overview of theenergy profile of its business including a review ofthe technologies in use and a comprehensiveassessment of energy-saving opportunities.

Building on our major energy policy review in 2004and the establishment of our 10-year target toreduce specific energy consumption per unit ofproduction by 15% by 2014, we have continued to make significant progress in the UK in 2005. The UK accounts for 89% of Tarmac’s total energyuse. Through a variety of initiatives and ongoingenergy-efficiency improvements, we have reducedour specific energy consumption by 6.1% incomparison to the restated figures for 2004.

The SavE Energy (SavE) campaign to promoteefficient energy usage has continued to gathermomentum in 2005. More than 200 employeeshave been trained in energy awareness and abooklet providing practical guidance on how to

reduce energy consumption was circulated to everyemployee in the UK during the course of the year.

This campaign has a very high profile in Tarmac andits importance is reflected in the appointment oftwo full-time Energy Managers in 2005 – one forour Building Products stream and the other for our Aggregate Products stream – to ensure itseffective implementation and drive performanceimprovements. To support them, Energy Championshave been identified in each of the businesses totake responsibility for meeting targets, raisingawareness and managing change across specificsites and operations.

Building on the data gathered in 2004, we havecontinued to collect monthly energy consumptionstatistics for each of our 550 Tarmac UK operationsthroughout 2005 in order to establish accuratebenchmarks for different product groups. Using thisinformation, we have been able to identify both thebest performers and areas for improvement – inturn providing us with the information to developsite-specific action plans to reduce energyconsumption across all sites and to create acompany-wide resource for the sharing of bestpractice in this area.

These site-specific action plans will continue to beimplemented throughout 2006 and beyond.Nevertheless, some important improvements havealready been achieved, including: the insulation ofaggregate dryers at asphalt plants; reviewingcompressed air systems; and installing variablespeed drives and using energy-efficient motors.

54.661.6

5.7*

4.95.1

42.344.1

2004 2005

7.98.7

7.5

Ready MixedConcrete (m )

TraditionalMortar (tonne)

Sand &Gravel (tonne)

Hard Rock(tonne)

Asphalt(tonne)

Cement &Lime (tonne)ConcreteProducts (m )

999880

7.7

0 100 200 300 400 500 600 700 800 900 1000

* No data available

3

3

2004 data restated following improvements in data gathering systems

kWh/unit production

3.44.5

4.15.2

1,2761,424

8.58.0

9.410.2

2004 restated SEC2005 SEC

0 200 400 600 800 1000 1200 1400 1600

105.8 108.2

85.8102.4

Ready MixedConcrete (m )

TraditionalMortar (tonne)

Sand &Gravel (tonne)

Hard Rock(tonne)

Cement &Lime (tonne)

Concrete3

Asphalt(tonne)

3

TARMAC GROUP SPECIFIC ENERGY CONSUMPTION 2004 AND 2005

TARMAC GROUP KG OF CO2/UNIT OF PRODUCTION 2004 AND 2005

18 ENVIRONMENT


GARSTANG CONCRETE PLANT –JUST 20 TONNES OF WASTE INTWO YEARS!

The introduction of a simple but highly effectivesystem has achieved some significant wastereduction results at our Garstang Ready-MixedConcrete Plant in the North West of England –a total of just 20 tonnes of waste sent tolandfill throughout 2004 and 2005!

The system, which is also achieving similarresults at our Poulton-le-Fylde operation inLancashire, UK, relies on the use of ‘wedge pits’– a wedge-shaped concrete settlement bay intowhich waste washout from our concrete truckmixers is discharged. The sloping floor of thebay means that aggregate ‘fines’ settle at thebottom and can be removed and remixed withthe aggregate feed stock, while the water flowin suspended solids is recirculated from the pitsand reused in production.

“To create such a small amount of waste from a plant producing nearly 90,000 tonnes ofconcrete during this period is a fantasticachievement, but it’s a very simple system thatwe’ve made work through the commitment of everyone here to use it consistently.”

JOHN NOBLET Plant Supervisor, Garstang

WASTE MANAGEMENTTarmac is committed to minimising waste as a keyelement of our environmental policy and 2005 hasseen some notable achievements in this area:

• an increase in recycling activity, including therecycling of waste that would previously have been sent to landfill

• a marked reduction in the total of waste sent to landfill.

While the total amount of waste sent for licenseddisposal has increased by 15.5%, from 349,000tonnes in 2004 to 403,538 tonnes in 2005, this is because our recycling business is now able toaccept waste from highway and utilitymaintenance works. This material, with its highproportion of fine clay, has traditionally provendifficult to turn into a resalable product. However, after making improvements toprocessing methods and equipment, we are now able to extract a saleable aggregate from 30 – 40% of highway and utility waste. An addedadvantage is that by introducing this recycledmaterial back into the supply chain, the need for new material is also reduced.

Excluding the waste passing through our recyclingbusiness, the total tonnage sent to landfill fromour production operations has actually reduced by10.6%, from 236,000 tonnes in 2004 to 211,000tonnes in 2005. This shows real progress towardsour target of a 25% reduction of waste sent tolandfill by 2010 as a direct result of the changesmade to Tarmac’s production processes.

The majority of our waste comes from theproduction of aggregates rather than quarrying,asphalt or concrete production. In addition tomineral waste, there is inevitably an amount ofoperational waste produced. The graph on page 20 shows how the total amount of waste for2005 was distributed.

BIODIVERSITYQuarrying operations can have an impact on localenvironments, and with more than 200 activequarries covering 10,300 hectares, we are veryaware of our interactions with many differentspecies and habitats.

Our role is to balance society’s need for thematerials we provide with its responsibility to help safeguard natural habitats. Although we aim to minimise any disturbance to naturalhabitats caused by our activities, sometimes it isunavoidable. Our response to this is to redevelopsites once aggregates have been extracted in away that restores habitats for plants and animals,or even creates them.

As such, we have set ourselves the target ofintroducing site-specific Biodiversity Action Plans(BAPs) at all active mineral extraction sites by2008. In 2005, we made progress towards thistarget by developing and testing a detailedtemplate for creating these BAPs.

To date we have introduced 11 BAPs across ourUK operations, two of which have been reviewed

ENVIRONMENT 19


by Anglo American. In 2005, we also held aworkshop in the UK for all of our internationalbusinesses, which focused on the purpose andpracticalities of BAPs and how they can besuccessfully implemented in different environments.We plan to continue the process of preparing site-specific BAPs in 2006.

Our BAPs will form an integral part of ourEnvironmental Management System, and we are coordinating our aims and activities in line withbiodiversity plans produced by both national andlocal government in order to produce the mosteffective site-specific responses.

WATER USEThere is a significant difference between how wateris used in aggregate production and its usage inconcrete production.

Most of the water used in quarries for aggregateproduction is collected on site; this untreated water is used for product washing or dust suppression,and the vast majority is returned to eithergroundwater or surface water courses, with verylittle lost to the environment.

In contrast, treated or potable (drinking) water isoften needed for the production of ready-mixedconcrete and mortar and concrete products, wheresupply of untreated water by direct abstraction from the aquifer by borehole is not possible.

The treatment of water to make it potable requiressignificant amounts of energy (0.5kWh per cubicmetre) and also places a strain on already limitedwater resources. For these reasons, in 2002 we setourselves the target of reducing our potable waterconsumption per cubic metre of concrete andmortar and concrete products by 4.3% by 2010.

Hazardous waste recycled522 tonnes

Metal recycled8,238 tonnes

Non-hazardous waste recycled423,331 tonnes

Total waste to licensed disposal 403,538 tonnes

0.06

510.94

48

0 500 1000 1500 2000 2500 3000 3500 4000 4500

2003

2004

2005

1,000m

4,077

4,230

4,052

3

0 20 40 60 80 100 120 140 160 180 200

2003

2004

2005 171.3

179.5

162.0

Litres/m of production3

TOTAL WASTE GENERATED IN 2005 (INCLUDES WASTE FROM TARMAC

RECYCLING BUSINESS) %

TOTAL WATER CONSUMPTION

POTABLE WATER CONSUMPTION FOR CONCRETE, MORTAR AND CONCRETE PRODUCTS

LOOKING FORWARD: 2006 AND BEYONDThroughout 2006, we will continue to work towardsour key environmental performance targets:

• To complete ISO 14001 environmental managementcertification by 2007

• To reduce specific energy consumption by 15% (basedon 2004 usage) by 2010

• To reduce specific potable water consumption in theproduction of mortar and concrete products by 4.3%by 2010 (based on 2002 usage)

• To reduce waste sent for licensed disposal by 25% by2010 (based on 2004 quantities)

• To implement Biodiversity Action Plans at all activemineral operations by 2008.

20 ENVIRONMENT


SOCIETY

AS A LARGE ORGANISATIONOPERATING IN MANY DIFFERENTAREAS ACROSS THE WORLD, WE BELIEVE THAT WE HAVE ANIMPORTANT CONTRIBUTION TO MAKE BOTH TO SOCIETY AS A WHOLE AND TO THE INDIVIDUALCOMMUNITIES IN WHICH WE WORK.

We look to achieve this by developing strong, open and constructive relationships with all our stakeholders: customers, employees andcontractors, suppliers, governments and regulatoryauthorities, business organisations and otherinterested groups, and – very importantly – ourneighbours in the local community.

Although we have much anecdotal evidence thatgood practice exists throughout the business, wealso recognise the need to provide accurate figuresto confirm this and to help identify other futureopportunities. Next year we will include data thatwill demonstrate Tarmac’s contribution to its localcommunities, whether it be attendance figures atone of our many open days, the financialinvestment we make to community projects or the diversity of our employees.

BUSINESS PRINCIPLESAs a leader in our field, we believe that we have a responsibility to conduct our businessstraightforwardly, reliably and with integrity at alltimes. To help us achieve this, a rigorous set ofBusiness Principles guides the way we work andpromotes a consistently high standard of conductacross all our operations.

SPEAK UPIn 2005, we introduced a free and confidential‘Speak up’ phone service for our UK business, which is available for all employees to report anyissues regarding the integrity of our operations thatmay concern them. It is our intention to introducesimilar services across all our internationaloperations, helping to develop and maintain theculture of integrity that is essential to the way we run our business.

NOISE REDUCTIONWe are aware that noise pollution from some of our operations has the potential to disturb ourneighbours. As a result, we are constantly looking atways in which we can minimise any adverse impactson local communities across our various activities.

In 2005, we began the implementation of aninnovative new piece of equipment that will helpreduce noise pollution from our vehicles for nearby

IN THIS SECTION

– BUSINESS PRINCIPLES– SPEAK UP– NOISE REDUCTION– EDUCATION – VIRTUAL QUARRY– INVESTING IN PEOPLE AND THE

WORKPLACE– PLAY SAFE... STAY SAFE...

SOCIETY 21


communities. By using a broadband ‘white noise’sound wave to indicate when a vehicle is reversing,the bbs-tek system, devised by Brigade Electronics,emits a signal that is less piercing and intrusivethan the traditional bleeper warning. It emits abroader range of soundwave frequencies so thatwhile the signal is easily identifiable and localisedat close range, it degrades rapidly over longdistances thereby reducing disturbance toneighbours or others in the vicinity.

This system is being specified as standard in all newvehicles that require a reverse-warning signal acrossour fleet, and is also replacing existing bleepersystems that are brought in for repair.

EDUCATION – VIRTUAL QUARRYTarmac has played an important role in thedevelopment of an exciting new educationalresource developed by the Quarry ProductsAssociation – the Virtual Quarry website. Modelled on our own Stancombe Quarry inSomerset, this site provides a fun and interactiveintroduction for children to the world of quarrying and a substantial resource for teachers.

Visitors are taken on a tour of the Virtual Quarryby a team of animated characters who explainwhere the materials for our buildings and roadscome from. On the way, youngsters can take part in educational activities such as piloting arock delivery truck, activating a quarry blast ortransforming an old quarry into a nature reserve.

The Virtual Quarry also provides access to asubstantial learning resource covering key stages 1 to 4 of the National Curriculum. The site includesmore than 20 complete teaching units developedagainst the schemes of work recommended by theDepartment for Education and Skills – take a tourat www.virtualquarry.co.uk

INVESTING IN PEOPLE AND THE WORKPLACEOur commitment to creating a workplace thatrecognises talent and encourages personaldevelopment begins even before we formally take on new employees. Each year, as part ofAnglo American group’s continuing mission tosupport undergraduate education, Tarmac offers a number of Student Technical ExperienceProgramme (STEP) placements to students studying a mining-related discipline.

First-hand industry experience with Tarmac is all theconfirmation many undergraduates need to embarkon a career with us. Our comprehensive graduatetraining scheme has been in operation for 10 yearsand gives new employees 12 months of hands-onpreparation in all areas of the business. Trainingtakes place both on- and off-site, under the closewatch of a mentor or coach. It also offersopportunities for those working in specialist areas,such as finance and engineering, to deepen theirknowledge and earn qualifications while they work.

22 SOCIETY


PLAY SAFE… STAY SAFE...TARMAC IS COMMITTED TOENSURING THAT THE PUBLIC DON’TPUT THEMSELVES IN DANGER BYENTERING OUR SITES. IN PARTICULAR,YOUNG PEOPLE ARE SOMETIMESTEMPTED TO GAIN ACCESS TO LOCALQUARRIES AS AN AREA FOR PLAY ANDADVENTURE – ACTIONS THAT CANPUT THEIR OWN SAFETY AND THESAFETY OF OTHERS AT RISK.

In the UK, we’ve been working with the QuarryProducts Association for many years as an active participant in its Play Safe… Stay Safe…campaign, which warns children and teenagersabout the dangers of trespassing and playing in quarries.

In the Midlands, our involvement with the Play Safe… Stay Safe… campaign was highlightedthrough a special award at the Quarry ProductAssociation Health & Safety Awards 2005. Dave Pargeter, our Dene Quarry Manager, waspresented with an award at the ceremony inLondon in recognition of his contribution to thecampaign and, in particular, for the relationship he has built with the local secondary school in Wirksworth.

Tarmac is accredited as an Investor in Peopleorganisation. The Investors in People Standardhelps organisations improve performance throughthe management and development of their people.We take our responsibility as an Investor in People seriously and, as such, aim to ensure thatemployees with potential are recognised,developed and rewarded for their achievements.This ethos is key to the running of Tarmac’sEmerging Talent Initiative, which aims to givepromising individuals the opportunities to realisetheir potential in their chosen field.

We also recognise that, as employers, we have aduty of care to our employees. The EmployeeAssistance Programme (EAP) was formallyestablished early in 2005 and is open to allemployees across the business who may haveparticular worries, concerns or issues relating to their personal circumstances or work life. The service is confidential and run by anindependent company that can provide counselling in person or over the phone.

SOCIETY 23


BUILDING ON PROGRESS A MESSAGE FROM OUR CEO

WE, IN TARMAC, ARE COMMITTED TOMANAGING CAREFULLY THE IMPACTOF OUR OPERATIONS ON PEOPLE ANDTHEIR ENVIRONMENTS; TO ENGAGINGWITH THE COMMUNITIES IN WHICHWE OPERATE AND TO CONTRIBUTINGPOSITIVELY TO THEM; AND DOING ALLTHIS IN A MANNER THAT IS FAITHFULTO OUR CORE VALUES OF BEINGRELIABLE, UNDERSTANDING ANDRESPONSIVE, AND STRAIGHTFORWARDTO DEAL WITH.

In 2005 we made significant advances across avariety of areas, but this is no cause for complacencyon our behalf. Tragically, a fatal injury occurred inour business in Oman during this period. Along witha slowdown in the rate of improvement in ouroverall safety performance, this led us to concludethat we needed to conduct a comprehensive reviewof our safety strategy.

Our revised strategy will be implemented throughout2006 and beyond and will be instrumental in thedevelopment of an interdependent safety culture,where people work safely, looking out for oneanother. The clarification of what is expected offront-line and middle management is a key aspect of this strategy and substantial training resources willbe directed towards this area. In 2005, 92% of oursites worldwide were free of Lost Time Injuries (LTI)and we are determined that all of our sites shouldreach this important standard of zero LTIs.

It is equally important that we operate in a way thatdoes not harm the health of those who work for us.In 2005 we made substantial progress in ensuringthat health screening is mandatory for all employeesworking in risk situations. This allows us to assessand monitor the health impact of their activitieswhile ensuring that conditions or practices are not causing or progressing occupational illness.

As this report has outlined, we have made importantprogress in environmental performance againsttargets for the reductions of emissions, waste tolandfill, water consumption and a particularlynotable 6.1% reduction in specific energyconsumption in our UK business. We have also setourselves challenging targets which will help to drivecontinued improvements in our environmentalperformance across all aspects of our businesses.

We have been working hard throughout thecommunities in which we operate to minimise anynegative effects that might result from our activitiesand to make a full and positive contribution wherethis is possible. Our commitment continues to bringtangible benefits in many areas from educationalactivities to noise-reduction strategies.

I am proud of the very real progress that is outlined in this report. More importantly, we are committed to building on the strong foundations that we have achieved and I look forward to reporting on our further progress next year.

ROBBIE ROBERTSONChief Executive OfficerTarmac Group

24 A MESSAGE FROM OUR CEO


Tarmac LimitedMillfields Road Ettingshall Wolverhampton WV4 6JP

www.tarmac.co.uk

®

If you have any comments on this report, please write to the safety, healthand environment department at the address above. Or email us at [email protected]

The report is also available on the Tarmac website: www.tarmac.co.uk

Tarmac and the T symbol are registered trademarks.

Printed throughout on Revive uncoated paper, which is made from a guaranteed minimum80% de-inked post-consumer waste and 20% mill broke. The electricity used to print thisreport was generated from renewable sources and vegetable-based inks were used throughout.On average, 84% of any waste associated with this report is recycled.

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