ALROSA Solidifies Global Leadership in Sustainable Diamond and Gold Mining

Moscow, September 2019 – In a landmark confirmation of its enduring commitment to responsible operations, ALROSA has been recognized as an undisputed leader among gold and diamond mining companies for its substantial investments in social programs. This prestigious status was affirmed by a comprehensive study conducted by PwC Advisory, underscoring ALROSA’s proactive approach to corporate social responsibility and sustainable development across its extensive operations.

The findings of this independent study highlight ALROSA’s pioneering role in integrating Environmental, Social, and Governance (ESG) principles into the core of its business strategy. For stakeholders, investors, and communities alike, this acknowledgment from a reputable firm like PwC provides critical assurance of ALROSA’s dedication to creating positive impacts beyond mere economic performance.

Pioneering Sustainable Practices: The Comprehensive PwC Advisory Study

The in-depth study by PwC Advisory offers a rigorous benchmark of sustainable practices within the precious metals and rough diamond mining industry. Spanning the period from 2016 to 2018, the research meticulously analyzed official reports from leading companies, providing a transparent and comparable overview of their performance in key sustainability metrics. This extensive review mechanism ensures that the assessments are grounded in verifiable data and adhere to international reporting standards.

The study’s scope was broad and multifaceted, delving into crucial aspects that define genuine sustainable development. These included, but were not limited to, significant investments in social programs aimed at community upliftment and employee welfare, robust environmental protection measures designed to minimize ecological footprints, and efficient resource management practices concerning energy and water consumption. Furthermore, the study scrutinized efforts to reduce greenhouse gas emissions and evaluated progress in fostering a diverse and inclusive workforce, particularly focusing on the representation of female employees within the traditionally male-dominated mining sector.

Unpacking the Metrics of Responsible Mining

By covering such a wide array of indicators, the PwC study provides a holistic perspective on what it means to be a responsible miner in the 21st century. It moves beyond simple compliance, evaluating companies on their proactive strategies to contribute positively to society and the environment. ALROSA’s strong performance across these diverse categories paints a clear picture of a company that not only understands but actively embraces its broader responsibilities.

The benchmarking process allows ALROSA to gauge its performance against global best practices and identify areas for continuous improvement, further solidifying its position as an industry frontrunner. This transparency and commitment to external validation are crucial for building trust with all stakeholders, from local communities to international investors seeking ethical and sustainable opportunities.

Unwavering Commitment to Social Investment and Community Development

ALROSA’s dedication to social responsibility is profoundly reflected in its financial allocations, setting an unparalleled standard within the industry. Annually, the company consistently allocates a remarkable 3% of its revenue towards social expenses, an indicator that positions ALROSA as the absolute leader in this critical area. This substantial commitment underscores the company’s belief that its success is intrinsically linked to the well-being of the communities in which it operates.

In 2018 alone, ALROSA channeled an impressive almost $168 million into diverse social investments. These funds were strategically deployed across a spectrum of initiatives designed to foster sustainable growth and improve quality of life. A significant portion supported regional development programs, vital for enhancing infrastructure and public services in remote areas, particularly in Yakutia where many of ALROSA’s operations are located. The company understands its role as a key socio-economic anchor in these “monotowns” – single-industry towns where its operations are often the primary source of employment and economic activity.

Empowering Local Communities and Employees

Beyond regional development, ALROSA invests heavily in corporate social programs specifically tailored for its employees and their families. These programs encompass a wide range of benefits, including comprehensive healthcare, housing support, recreational facilities, cultural events, and pension schemes, ensuring that those who contribute to ALROSA’s success are well-supported. Such internal programs are crucial for fostering a motivated and stable workforce, essential for long-term operational excellence.

Furthermore, the company’s commitment extended to approximately 500 social and charitable projects, touching various facets of community life. These initiatives range from supporting educational institutions and youth programs to funding healthcare facilities, cultural preservation efforts, and environmental awareness campaigns. By engaging in such a broad array of projects, ALROSA actively contributes to the holistic development and resilience of the regions, reinforcing its role as a responsible corporate citizen. This widespread investment demonstrates a deep understanding of its social license to operate and a proactive approach to building enduring, positive relationships with local populations.

Leading the Charge in Environmental Stewardship

ALROSA’s commitment to environmental sustainability is as robust as its social initiatives. In 2018, the company’s expenditures on environmental protection activities surpassed $76 million, representing 2.2% of its consolidated revenue. This significant financial outlay highlights a dedicated effort to mitigate the ecological impact of its mining operations and promote a healthier planet. The company’s strategy is built on a proactive and responsible approach, encompassing a wide array of measures designed to protect ecosystems and conserve natural resources.

At the forefront of these efforts are substantial investments in advanced treatment facilities. These state-of-the-art systems are crucial for purifying industrial wastewater and managing air emissions, ensuring that discharge into natural environments meets or exceeds stringent regulatory standards. By employing cutting-edge technologies, ALROSA actively prevents pollution and safeguards water quality and air purity in the regions where it operates, particularly vital in the pristine and sensitive ecosystems of Siberia.

Protecting Ecosystems and Resource Management

Another cornerstone of ALROSA’s environmental strategy is extensive land reclamation. Recognizing that mining operations inevitably alter landscapes, the company is committed to restoring disturbed areas to a natural or economically productive state post-extraction. This involves carefully planning and executing rehabilitation projects that often include reforestation, soil stabilization, and reintroduction of native flora and fauna, ultimately aiming to recover biodiversity and ecological balance. These efforts demonstrate a long-term vision for responsible land use and environmental restoration.

Moreover, ALROSA actively finances environmental studies and ongoing monitoring programs. These scientific initiatives are indispensable for understanding the long-term ecological impacts of mining, informing best practices, and ensuring continuous improvement in environmental performance. By investing in research and vigilant monitoring, the company can proactively identify potential risks, implement preventative measures, and adapt its operations to evolving environmental challenges and scientific understanding. This comprehensive approach to environmental management solidifies ALROSA’s position as a leader in responsible mining practices.

Advancing Gender Equality and Human Capital Development

In an industry traditionally characterized by a predominantly male workforce, ALROSA stands out for its progressive approach to gender equality and human capital development. Adhering to the rigorous disclosure requirements of GRI (Global Reporting Initiative) reporting standards, the company transparently communicates its commitment to supporting equal opportunities across its operations. This dedication has yielded tangible results, as evidenced by the PwC research, which highlighted ALROSA as employing the highest percentage of women among its industry peers, with women constituting a significant 34% of its total workforce.

This impressive figure not only demonstrates ALROSA’s success in attracting and retaining female talent but also reflects a corporate culture that values diversity and inclusion. Such representation is particularly noteworthy in mining, often perceived as a physically demanding sector. ALROSA’s proactive policies, which may include flexible working arrangements, support for career progression, and equitable hiring practices, likely contribute to this positive outcome, fostering a more balanced and dynamic work environment.

Fostering a Diverse and Skilled Workforce

While the company may be slightly behind other industry representatives in the average number of hours dedicated to external personnel training, ALROSA compensates with a highly effective and robust in-house training center. This internal facility is a cornerstone of its human capital strategy, where approximately 99% of all professional development courses and skill-enhancement programs are conducted. This significant reliance on its own site offers numerous strategic advantages.

By developing and delivering training internally, ALROSA ensures that educational content is highly tailored to the specific needs, technologies, and operational challenges of its mining processes. This bespoke approach leads to highly relevant and practical skill development, directly enhancing employee competencies and operational efficiency. Furthermore, it allows for greater quality control over training modules, promotes a consistent corporate culture, and often proves more cost-effective in the long run. The in-house training center thus plays a vital role in nurturing a highly skilled, adaptable, and loyal workforce, crucial for sustaining ALROSA’s leadership in the diamond and gold mining sector.

Innovative Water Management: A Benchmark for the Industry

ALROSA has established itself as an exemplary leader in water stewardship, an increasingly critical aspect of sustainable operations in resource-intensive industries like mining. The company significantly surpasses its peers in the proportion of recycled and reused water within its production processes. Currently, this impressive share accounts for over 90% of ALROSA’s total water intake, setting a formidable benchmark for environmental efficiency and responsible resource management across the global mining sector.

Achieving such a high rate of water recycling is a testament to ALROSA’s advanced engineering and dedicated investment in sophisticated water management systems. This involves implementing closed-loop water circulation systems, where water used in various stages of the mining and processing operations is collected, treated through multi-stage filtration and purification processes, and then reintroduced into the production cycle. This minimizes the need for fresh water abstraction from natural sources, significantly reducing the company’s environmental footprint on local aquatic ecosystems.

The benefits of this innovative approach are multifaceted. Firstly, it ensures the preservation of precious freshwater resources, particularly critical in remote and potentially water-stressed regions. Secondly, by dramatically reducing the volume of discharge water, ALROSA mitigates the risk of environmental contamination, protecting natural habitats and ensuring the health of surrounding communities. Thirdly, efficient water recycling contributes to operational cost savings and enhances long-term operational resilience against potential water scarcity. ALROSA’s proactive water management strategy not only demonstrates its commitment to environmental responsibility but also positions it as a pioneer in developing and implementing sustainable practices that others in the industry can emulate.

Driving Climate Action Through Energy Efficiency and Renewables

ALROSA’s commitment to combating climate change is evident in its robust strategies for reducing greenhouse gas (GHG) emissions and transitioning towards cleaner energy sources. The company has made significant strides in this area, demonstrating a clear trajectory of continuous improvement year after year, as highlighted by the PwC study. A key part of this strategy involves a gradual but comprehensive upgrade of its vast fleet of mining and passenger transport vehicles, systematically converting them from traditional diesel and gasoline engines to more environmentally friendly gas-powered alternatives.

As of 2018, an impressive 300 units of ALROSA’s transport fleet were already running on natural gas, a cleaner-burning fuel that significantly reduces harmful emissions. This strategic shift has contributed to a remarkable achievement: ALROSA has successfully reduced its greenhouse gas emissions in CO2 equivalent by half over the past five years. This significant reduction underscores the effectiveness of its decarbonization efforts and its dedication to mitigating its contribution to global warming. The transition to natural gas is not merely an environmental initiative; it also represents a long-term operational advantage, leveraging more sustainable and potentially more stable fuel sources.

Decarbonizing Operations and Embracing Green Energy

Beyond transport, ALROSA has also made monumental shifts in its overall energy consumption profile. Between 2016 and 2018, the company drastically reduced its reliance on carbon-intensive fuels. The amount of coal consumed plummeted by an astonishing 80%, diesel fuel usage decreased by almost 90%, and crude oil consumption was halved. These dramatic reductions reflect a strategic pivot away from fossil fuels and towards a more sustainable energy mix.

Crucially, this transition has been underpinned by an exceptional embrace of renewable energy sources. ALROSA’s commitment to clean energy is truly industry-leading, with the share of renewable energy exceeding an astounding 90% of its total energy consumption. This remarkable achievement is largely attributed to the company’s strategic utilization of the abundant hydropower resources in the regions where it operates, particularly in Siberia. By tapping into clean, inexhaustible hydroelectric power, ALROSA not only minimizes its carbon footprint but also secures a stable and reliable energy supply for its operations. This proactive move towards renewables positions ALROSA as a frontrunner in the mining industry’s global effort to decarbonize and align with international climate targets, demonstrating a genuine commitment to a greener future.

A Vision from the Top: Sergey Ivanov on ALROSA’s Responsibility

Sergey Ivanov, CEO of ALROSA, succinctly articulated the deeply embedded philosophy that drives the company’s extensive sustainability efforts. He emphasized ALROSA’s profound role as a company of regional significance, particularly in Yakutia, where approximately 50,000 people reside in its “monotowns.” For these communities, ALROSA is more than just an employer; it is the economic backbone and a vital social partner.

“Therefore, social responsibility is our top priority and we continue to be one of the leaders in this area,” Ivanov stated, reinforcing that this commitment is not merely a corporate add-on but an intrinsic part of ALROSA’s identity and operational mandate. He further highlighted the company’s contributions to the social and economic development of other key regions, such as the Arkhangelsk region, where its subsidiary, Severalmaz, operates. This broader geographical impact underscores ALROSA’s widespread positive influence and commitment to regional prosperity.

Ivanov reiterated the tangible financial dedication behind these principles, noting that ALROSA’s social investments in 2018 alone amounted to almost $168 million. Complementing this, the company separately financed environmental projects, allocating over $76 million to safeguard the natural environment. These substantial figures underscore the serious and sustained commitment ALROSA makes to both its people and the planet. Concluding his statement, Ivanov graciously credited the collective effort of the entire workforce: “These results achieved by ALROSA last year were made possible thanks to the efforts of all the company’s employees.” His words acknowledge that true sustainability is a collaborative endeavor, driven by the dedication and hard work of every individual within the organization.

Conclusion: Setting the Standard for Sustainable Mining

The findings of the PwC Advisory study unequivocally position ALROSA as a global leader in sustainable diamond and gold mining. Its exceptional performance across key Environmental, Social, and Governance (ESG) metrics – from unparalleled social investments and pioneering environmental protection initiatives to progressive human capital development and groundbreaking energy efficiency – sets a new benchmark for the industry. ALROSA’s unwavering commitment to allocating significant portions of its revenue to social programs, its innovative water recycling systems, and its impressive transition to renewable energy sources demonstrate a holistic and deeply embedded approach to corporate responsibility.

By prioritizing the well-being of its employees and local communities, safeguarding the environment through rigorous measures, and actively working to mitigate climate change, ALROSA exemplifies what it means to be a truly responsible global mining company. The dedication articulated by CEO Sergey Ivanov and the tangible results validated by independent experts like PwC underscore ALROSA’s vision for a future where economic success goes hand-in-hand with profound social and environmental stewardship. As the industry evolves, ALROSA continues to light the path forward, proving that sustainable practices are not just an aspiration but an achievable reality.

For a comprehensive overview of ALROSA’s sustainable development initiatives and detailed performance data, please refer to the official ALROSA Sustainability Benchmark Report.