Annual Report and Accounts 2010

In 2010, NWR continued to develop the core areas of its CSR strategy: Corporate Governance, Our people, Community, Environment.

At NWR, employee safety is a key priority, along with the provision of comprehensive health care, support for employees’ education and fair compensation that stands well above the regional average.

Safeguarding the health and promoting the safety of our workers is an integral part of our business. We have well-developed safety guidelines, processes and monitoring systems throughout our mines and coking plants. Every one of our employees is trained to be aware of risks and to take personal responsibility for their own safety and that of their fellow workers.

Our safety record is comparable to international industry standards and we are constantly striving to improve it.

NWR’s dedicated safety investment programme, ‘SAFETY 2010’, has seen EUR 17 million invested in improving health and safety across our mining operations, including upgrading equipment for our miners with the aim of providing each miner with new and better equipment by the end of 2010. As a result, more powerful, lighter lamps, stronger boots, clothing with reflective strips and the latest self-rescue devices were issued to every miner.

Our constant efforts to improve safety, our focus on accident prevention and our investment in new mining technologies, protective aids and equipment have delivered encouraging results. Over 2010, the Lost Time Injury Frequency Rate (‘LTIFR’) has dropped by 24 per cent at our mining operations compared to to 2009, from 12.00 to 9.13 respectively.

The cutting edge technology installed across our mines within the EUR 350 million Productivity Optimisation Programme 2010 (‘POP 2010’) has also had a direct impact on improved health and safety.

The main role of OKD, HBZS is to provide mining rescue services across all OKD's mines. As well as responding rapidly and efficiently whenever required to deal with any incidents on site, including saving lives and providing first aid underground, the Mining Rescue Service is also on hand to assist the civic emergency services in responding to incidents involving the general public.

Under the Continuous Improvement Programme employees are invited to submit suggestions on ways to improve safety, working conditions and efficiency. Each successful suggestion earns the employee responsible a 1,000 Czech Koruna award, with additional incentives once the proposal has been implemented and benefits recognised. In 2010, more than 1,075 suggestions were submitted, of which 742 were implemented by the Company.

We care about our employees’ health and quality of life. All employees receive periodical medical check-ups. Also, employees at certain mining operations of our OKD subsidiary are entitled to reconditioning stays and rehabilitation care. Children of employees can obtain contributions towards medical assistance. NWR also contributes to premium health care for active as well as retired miners. The Company foundation regularly contributes towards new diagnostic equipment for hospitals via grants. Preventative care in the area of employees’ health is also a major commitment at our OKK Koksovny subsidiary.

NWR maintains a constructive relationship with our employees and the trade unions. The Company believes that remuneration should correspond to work levels and market conditions. The average wage of NWR’s mining operations employees exceeds the regional average by nearly 50 per cent.

All employees are entitled to five weeks holiday per year. Mining operation workers are additionally rewarded for their demanding work with an extra week of leisure.

We provide our employees with financial contributions for holidays and Christmas, for recreational activities for their children and covering transport costs. Furthermore, NWR sponsors the children of its employees via scholarships at carefully selected schools in the region.

NWR’s care for its employees also extends to their leisure time. Employees receive vouchers for sports, cultural activities, medical needs, wellbeing and so forth, varying according to the number of years worked for the Company. The Company also supplies transportation for employees travelling to specific operations of the Company.

OKD has developed an Intranet interface with easy access to information for its employees as well as English, Czech and Polish language versions of the Company’s website.

As one of the largest private sector employers in Central Eastern Europe, NWR is wholly committed to improving the skills of our workers and to helping them develop their full potential. NWR provides several different types of training for employees at our own training centre.

OKD provides several different types of training for employees at its OKD Central Training Centre. The centre serves all our miners in the Karviná region, as well as contracted staff working for OKD.

In 2010, a total of 20,605 employees completed training in separate modules, with training time amounting to 17.3 hours per person; 2,409 employees completed the initial training, 4,620 qualifying, re-qualifying, and special courses, and 13,576 regular occupational health and safety training.

OKD has renewed its collaboration with the Vocational School of Technology and Services in Karviná, supporting the introduction of a new three-year curriculum to train mining operation specialists, such as mining electricians and locksmiths.

The families of our workers are also included in the programme. For instance OKD’s Academy project, designed to support children in their studies at high school and university, maintaining the traditions of the mining profession and transferring experience from generation to generation.

OKK Koksovny is participating in drawing up a new secondary school curriculum in the Czech Republic for students majoring in coke production technologies. The new curriculum will be integrated into the study of metallurgy, and offered to students by the Secondary Technical School in Frýdek-Místek.

All companies within the NWR Group provide long-term support to employment in the regions in which they operate. Although the desire to work in heavy industry among young people is in decline, this trend can be reversed. Our approach also aims to increase positive perceptions of a career in the industry.

Every year a traditional mining festival is organised by OKD. The festival is attended by thousands of people who come, both to have fun and, at the same time, to pay tribute to the demanding but rewarding mining profession. The celebration is dedicated to our employees and their families, but the general public are also welcome.

The long-term development of NWR’s business undertakings requires maintaining positive relationships with local communities based on mutually beneficial partnerships. 2010 saw NWR continue to pursue CSR in the two essential fields of donations and sponsorships.

In 2010, NWR donated EUR 250,000 to the OKD Foundation.

The OKD Foundation, a charitable organisation established by OKD in 2008, has rapidly become a well respected leader in the not-for-profit sector and has supported almost 800 public benefit projects to date through the following key programmes:

• For Health – social and health care projects.
• For Joy – cultural and educational projects.
• For the Future – development of the region and environment.
• For Europe – help for non-profit-making organisations in obtaining support from EU funds.

One of the projects supported was the civic association ‘Filadelfie’, which received the OKD Foundation prize in the ‘For Health’ category in 2010 in recognition of its project to place children from children’s homes with surrogate families. The association supports foster care by providing new housing for families that take in several children. The fundamental principle of the association is that children belong in families, not institutions. The award-winning project ‘Children Belong in a Family’ led to the construction of a seven-room house in the Karpentná quarter of the town of Třinec. The applicants received CZK 1 million from the OKD Foundation fund.

NWR donated a further EUR 20,000 to St. Barbara Civic Association

In addition to the OKD Foundation, NWR also directly supports the St. Barbara Civic Association, which helps children who have lost a parent through a mining accident.

The Association was set up by OKD and currently cares for 87 Czech, Polish and Slovak children, supporting their education, health and leisure time by providing them with the finance for a wide range of needs including school fees, accommodation at halls of residence or school hostels, learning aids, language courses, driving lessons, artistic and hobby activities and health care for both the miners’ children and their widows.

In 2010 NWR supported various sponsorship projects, with a total contribution of EUR 153,126.

NWR’s 2010 sponsorship activities focused on encouraging public discussion on the best utilisation of natural resources in the Czech Republic and Poland. This included support for several specialised conferences. The Company also provided financial support for numerous cultural and sporting activities as well as for regular meetings of entrepreneurs in the Czech Republic.

The Group continued to provide its longstanding support to various sports clubs, and cultural and educational events organised in the Moravian-Silesian region of the Czech Republic. The Company has also provided financial support for an independent festival of modern art.

NWR constantly strives to minimise the impact of its operations on the environment in the regions where it operates.

NWR maintained this approach in 2010 when it further pursued activities including the rehabilitation of landscape affected by its mining activities and processing of coal mining by-products and waste materials.

In 2010, OKD continued its intensive rehabilitation and restoration projects in the Karviná region, which currently cover 55 sites simultaneously. The ‘Darkov Sea’ project, the largest project of its kind in Moravia, covering 145 hectares, is nearing completion (estimated in 2014). The investment in this rehabilitation project has exceeded EUR 24.4 million to date and ultimately should see the area restored to a recreational resort. The area is now covered by a lake, with wildlife already returning to the clean waters and its future as a sports and recreation area is assured.

NWR minimises the impact of waste from its operations.

OKD maintains waste disposal storage sites for waste rock and also sells a portion of waste rock for local use in road building and construction. It also cooperates with Green Gas International B.V. (‘GGI’), a company specialising in methane extraction, to purchase superfluous gas from our mines. In 2010 GGI purchased more than 60mm³ of methane from OKD.

OKK Koksovny’s waste management strategy mainly addresses reduction in the amount of waste production, waste separation and safe disposal from its coking operations.

OKK Koksovny permanently monitors carbon dioxide emissions and is progressively improves emission monitoring methods.

The newly built coke battery at the Svoboda coking plant in Ostrava, which was a key part of the Coking Plant Optimisation Programme 2010 (‘COP 2010’) capital investment programme, is fitted with the latest technologies for capturing air pollutants resulting from the coke production process.