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Annual Report, 2006

28 February 2007

Metals and minerals is a relatively small sector within today’s vast world economy, but its contribution is vital. From taps to televisions to solar panels, metals and minerals provide essential inputs for all sectors. Metals and minerals are essential for modern living, as well as for human development generally; the recent substantial falls in poverty in countries like China and India would not have been possible without a steady and expanding supply of raw materials produced by the mining and metals industry.

Strong demand has brought challenges as well as benefits. It has raised market prices and contributed to inflationary pressures. In some countries where our members operate, it has generated expectations that mining revenues will fund a larger share of social spending. It has emphasized the importance of avoiding waste and, not least because of climate change, improving energy efficiency.

The key current challenges for the sector are threefold: ensure continued supply through secure access to mineral deposits, demonstrate the socio-economic benefits of mining to host governments and communities, and ensure that materials are consumed safely and sustainably.

As an industry leadership group that shares a common set of business values, these challenges are at the heart of ICMM’s mission to help improve our members’ performance. We all know these challenges are substantial. Much remains to be done, especially in terms of implementation. But there has been good progress insetting the standards against which our members will be measured by host governments, communities, financiers and investors.

During 2006, ICMM launched an assurance procedure to validate members’ compliance with the ICMM Principles, new guidance publications on materials stewardship and biodiversity protection, and a toolkit for enhancing socio-economic outcomes from mining investments. These and other initiatives were undertaken with leading stakeholders such as the World Bank, the International Labour Organization and IUCN. ICMM also hosted a landmark safety and health conference, and initiated dialogue with Professor John Ruggie, the UN Secretary-General’s Special Representative on business and human rights.

These efforts add value to member companies by improving relations with resource regulators, investors and bankers. They are also significant in helping members, and through their leadership the mining and metals sector as a whole, move steadily closer to the societal goal of sustainable development.

That ICMM’s work has the support of the best in the mining and metals industry can be judged from the fact that this year, we welcomed three new members – Xstrata, CVRD and Teck Cominco. This is a testament to the talent, enthusiasm and dedication of the ICMM team and task force personnel drawn from member companies and member associations, for which we whole heartedly thank and congratulate them.

 Yet standards and toolkits are not an end in themselves. They are a first stage in the process of improvement. To invoke Winston Churchill, we are at the end of a beginning. We have gained deep knowledge of the issues, and begun to specify some of the solutions. We have mapped the path that companies should take to achieve sustainable development, and defined what must happen to stay on track. What matters now is performance on the ground.

This is our focus going forward. This review outlines how we are continuing to set the standard. There is a virtuous circle here. As the performance of member companies improves, they will become the developers or partners of choice for governments and host communities. Together with a lower risk profile, this means more favourable consideration by investors. This is the win-win we believe in: positive outcomes for the environment and communities, and better business for our members.

Leigh Clifford
Chair, ICMM

Paul Mitchell
President, ICMM