Corporate Social Responsibility

Ferrexpo’s corporate social responsibility programme provides annual support to local communities in the town of Komsomolsk, where the mine is located, as well as to surrounding areas. Examples are:

Financial support for over 4,000 low-income earners, pensioners and people who suffer from physical disabilities. Purchase of state-of-the-art diagnostic equipment helping to modernise local hospitals and clinics. Ferrexpo also provides free medical treatment to pensioners. In 2011, Ferrexpo launched a programme called ‘Renovated City’ which focuses on reducing municipal charges for local inhabitants. The programme includes measures to reduce heat loss in apartment buildings and donations of new heating systems for housing communities. Cultural support through the funding of the House of Culture. The House of Culture sponsors the annual festival ‘Arrow-wood summer on the Dnieper’, as well as concerts on special days such as the Day of Metallurgy. Allocation of funds for educational equipment. In April 2011 Ferrexpo financed up-to-date equipment for a new state-ofthe-art physics laboratory in a local secondary school. Sports education and leisure activities for children, including the financing of the junior football team ‘Gornyak’ as well as a youth sailing and rowing club. Ferrexpo sponsors the annual Day of Youth.

In total, Ferrexpo plans to spend over UAH30 million on charitable causes in Komsomolsk and the surrounding areas i n 2011.

DuPont

DuPont Safety Resources (‘DuPont’) has an outstanding record of success in assisting companies to achieve a ‘zero harm’ objective and were engaged as a result of the fatal accidents that occurred in the early part of 2008, reflecting management’s determination to improve Ferrexpo’s safety record.

DuPont carried out their initial assessment by reviewing safety documentation, carrying out interviews with employees at all levels and making observations on field tours. In their report, DuPont recognised FPM’s strengths in areas such as the commitment of the management board, the provision of a first class training centre and the professionalism of employees.

DuPont made a number of recommendations following the review and have been working with local management and employees on implementing a structured action plan. This has focused on the areas of leadership, training and behavioural practices and improving risk evaluation processes.

Ferrexpo continues to work on its short, medium and longer-term safety goals.

Air quality

FPM is constantly working on minimising the impact of its activities on air and water quality. In 2008 FPM personnel monitored and tested the effects of moistening exposed and potentially dusty surfaces in reducing dust pollution. They concluded that this moistening cut air pollution but had no negative effect on subsoil or surface water pollution.

As a result of these experiments FPM now carries out extensive watering of work faces after blasting and in the dry season. This also enabled the company to decrease expenditure on disposal costs of stripping material.

Cultural investment

The cultural centre of Komsomolsk has traditionally been the Palace of Culture and Technology. Until recently, the Palace of Culture was run by the local City Council and the facilities had become out of date.

In 2005, FPM management and the City Council agreed to cooperate on the reconstruction and re-equipping of the Palace of Culture and FPM contributed over US$800,000 to the cost of its repair and upgrading.

FPM continues to support the Palace of Culture as a unique centre for the local population and invested in the region of US$690,000 in the centre in 2008. It supports 17 distinct groups of performers and its creative groups took part in more than 120 concerts and competitions