The topic of climate change has evoked a significant global response, culminating in 2008 with the introduction in Australia of a Commonwealth Government framework aimed at enabling a transition towards a lower carbon future. As an operator and producer of mineral products in Australia, OZ Minerals seeks to understand and manage the business risks associated with emerging climate change policy.

With operations and development projects spread across Australia and Southeast Asia, our climate change risk profile is based on the following:

• The impact of an Australian emissions trading scheme on the cost structure of our business, primarily due to increased operating costs and/or supply risk for electricity and fuel
• The effect on demand for our products resulting from business constraints felt by our customers due to changing emissions trading regulation in their jurisdictions
• Changing climatic regime, including the potential disruption of exploration activity, operations and transportation due to extreme weather and changes in climate systems
• Potential opportunities through our operations in Laos to generate credits under the Kyoto Clean Development Mechanism whilst simultaneously contributing to our broader social and environmental objectives

The focus of our work in 2008 has been in three areas:

• Fully characterising the energy and greenhouse inventory of the merged group operations
• Assessing opportunities for reducing greenhouse gas emissions and delivering business value through improved energy efficiency
• Monitoring the potential business impact of climate change regulation, including the implementation of an emissions trading scheme

In recognition of the fact that climate change is a global problem requiring an integrated global solution, we will continue to focus our efforts now on incorporating energy efficiency into project design and implementing opportunities for energy efficiency at existing operations.