Committed to Sustainable Partnerships

Cement Australia is the leadingintegrated manufacturer of cementitiousproducts in Australia. The company holds47% of the Australian market, and is anacknowledged leader in the nationalindustry. Our international shareholdingprovides leading global support on thefull range of related technical,environmental and sustainability issuesconfronting the industry.

Cement Australia has the commitmentand capacity to drive worthwhilesustainable outcomes in cementmanufacture and sustainable materials,and particularly in relation to resourceconservation and management.

Our Global Links

Our strong links with global cementplayers provides us with real advantagesincluding:

Global benchmarking of our operations;

Access to the latest in cementprocessing technology; and

Links to the World Business Council forSustainable Development through ourparent companies, Holcim andHeidelbergCement which provides,amongst a half a dozen sustainabilityinitiatives, an international focus ongreenhouse issues, emissions reporting,and resource sustainability.

Our Operations

Cement Australia has an annual turnoverof nearly one billion dollars, through4.8 million tonnes of cement sales perannum, and sales of lime products, fly ashand slag. We employ approximately 1,100employees largely in regional Australia.

We operate from three major integratedclinker and cement manufacturingoperations, the largest of which is ourFishermans Landing operation nearGladstone, as well as some twenty-twofacilities providing the support and logisticsnecessary to supply such a geographicallydiverse market as Australia. CementAustralias subsidiary Geocycle, aspecialised waste management company,is an important component in effectingour sustainability strategy.

Cement is a vital commodity for theAustralian economy, not only as a criticalcomponent of any infrastructuredevelopment program, but increasingly inresource recovery and reuse innovation in both cases providing significanteconomic and social benefits.

Its relatively low value and independencefrom unique geological raw materials, aswell as its critical importance for the builtenvironment, means that only very fewcountries do not maintain a viable andstrategically important domestic cementmanufacturing industry.

Cement Australia: Committed to Sustainable Partnerships

Introduction

Cement Australia has the commitment and capacity to drive worthwhilesustainable outcomes in cement manufacture and sustainable materials,and particularly in relation to resource conservation and management.

Cement Australia: Committed to Sustainable Partnerships

Cement Australia: A Sustainable Business

Our Objectives

While still a relatively young company,Cement Australia has embarked on itsown journey to understand whatsustainability means, and what ourapproach to sustainability might look like.

As a commercial entity, there is clearlyan imperative that we be financiallysuccessful. But we understand that ourlonger-term financial success can onlybe achieved by embracing a broaderview of sustainability. We dont believethat one can exist, in the longer term,without the other.

So our overarching objective is thatCement Australia develops into asustainable business that delivers onfinancial, social and environmentalcommitments today, all the whileensuring our long-term capabilityto do this in the future.

This objective must, and does, link withour company vision to be the leaderin cement in Australia

In order to achieve and maintain thisvision, and with a view to achieving asustainable future, we believe that thereare three core inter-related elements,which must be managed in parallel:

Our Strategy

Sustainable PerformanceThis element focuses on the financialperformance of Cement Australia,but also recognises the importance ofactively reviewing and improving theway the business achieves this.

Sustainable PartnershipsWe recognise the importance as wellas the breadth of the stakeholders inour company. Our relationships withour shareholders, our customers, ourregulatory authorities, our neighboursand our employees must also besustainable. They must have a long-termfocus, and they must be developed aspartnerships not simply as fleetingtransactions or one-way communications.As one example of this, Cement Australiamaintains community liaison groups at allof its major operations and we believethat these are essential to providing anaccessible public face to the communityas well as enabling proactivemanagement of community issues.

Sustainable PracticesWe build from the more traditionalsafety, health and environment focusto include resource conservation aswell as an understanding of thecollaborative role that industry mustplay with society to address criticalissues such as climate change.

Our sustainability strategy focuses ondelivering in each of these areas and canbe summarised opposite.

Sustainable Business

Cement Australia: Committed to Sustainable Partnerships

Our Sustainability Strategy

In order to achieve and maintain our vision of being the leaderin cement in Australia, we must manage three core interrelatedelements in parallel.

SUSTAINABLEPERFORMANCE

SUSTAINABLEPARTNERSHIPS

SUSTAINABLEPRACTICES

SUSTAINABLEFUTURE

We must deliver excellent financial results to ourshareholders consistently over the long term.This is achieved through continuous business

improvement activity.

We must build a business that supports andimproves the lives of everyone we interact with.

We respect the people and organisations we workwith and have a role to play in building the

community that supports us.

We must ensure our actions do not cause harmto people or the environment and we reduce ourconsumption of natural resources. We must alsowork closely with authorities and industry to form

collaborative solutions to global issues.

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Cement Australia: Committed to Sustainable Partnerships

So how does this strategymanifest itself in practice?

Sustainable Performance

Sustainable Performance, results inan increasing focus on integratingsustainability issues into our financialplanning and budgeting processes.Within this element, we include a strongbusiness improvement program andannual plant performance reviews askey ways of achieving continuousimprovement. Similarly, human resourcesdevelopment, particularly within arelatively small and specialised industrysector goes hand-in-hand with asustainability objective.

Sustainable Partnerships

We have a strong history of ongoingengagement through community liaisongroups. It is also important that ourregulators understand the vagaries ofcement manufacture, as much as weunderstand regulatory processes andpractice.

Our employees are our most importantpartnership. Gone are the days whenemployees, at the precise moment theywalked through the workplace gate,delegated responsibility for safety,environmental performance andcorporate governance to their employer.We now see new generations ofemployees that actively care about thesustainability performance of theiremployer, and are also keen to beinvolved in whatever way they can.

Sustainable Practices

Focus areas for Sustainable Practicesinclude our management of safety, health,environment and compliance, with aparticular focus in recent times onimproved water management andgreenhouse gas emissions management.Cement Australia is particularly active inthe area of resource conservation, and isone of the largest material recyclers inAustralia

Our employees are our most important partnership. We now see newgenerations of employees that actively care about the sustainabilityperformance of their employer, and are also keen to be involved inwhatever way they can.

Sustainable Partnerships: Case Study

Since the 2003 acquisition of the Railton plantin Tasmania, Cement Australia has consistentlydemonstrated its determination to meet itsobligations to those employees affected by themanufacture of asbestos sheeting at the sitebetween 1947 and 1986.

As a company with a commitment to zero harmand providing a safe working environment forour employees, we are treating this issue withthe utmost priority. Recognising theimportance of this issue, we have quicklyestablished a proactive and comprehensiveresponse to it. Our response operates on anumber of levels:

Quickly resolving claims as they are made;

Investing in an accelerated program ofremoving or completely isolating all asbestosat the site.

Ensuring all employees understand andimplement safe work practices, particularlyin relation to asbestos;

Encouraging any former employee with aconcern to contact us immediately andproviding these employees with assistanceand information;

Keeping the community informed throughregular community consultation meetings,by providing a contact point for informationwithin our organisation and by ensuringsafety and education materials are available;

Conducting a detailed study into the level ofoccupation exposure during the period ofmanufacture to help us better understand theissue and frame our response accordingly.

The following chart illustrates the spendcommitment associated with this program.

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Actual Forecast/Fin Plan

Asbestos Removal cumulative spend

Case Study

Cement Australia: Committed to Sustainable Partnerships

Cement Australias approach to greenhouse gas abatement begins at agrassroots level: with our people; through our operational processes;through a focus on research and development; as well as by sharing ourknowledge and skills across all of the communities in which we operate.

Cement Australia: Committed to Sustainable Partnerships

Cement Australia and Climate Change

Greenhouse gas emissions and climatechange are particularly significantsustainability issues for the cementindustry. For one, societys demand forcement, along with the cementmanufacturing process itself mean that,worldwide, carbon dioxide emissionsfrom the cement industry contributeabout 5% to total anthropogenicemissions. The make-up of industryand power generation in Australia issuch that cement industry contributionshere are much less at about 1.5% ofemissions, but nonetheless significant.

The making of cement

Making cement is an energy and resourceintensive process, requiring the precisecombination of lime, silica, alumina, andiron, which are combined and then fusedtogether during the mixing and cookingprocess in the kiln.

The raw materials are initially heated to1000C, calcining the calcium carbonatein limestone to calcium oxide andreleasing carbon dioxide, a processusually referred to as calcination andcontributing to approximately 50% of ourtotal carbon dioxide emissions.

This calcination process is unique to onlya few manufacturing processes andhighlights the importance of focussing onemissions rather than energy whendiscussing climate change policy.

Within the rotary kiln, the materials aremixed and further heated to about 1450ccausing a high-temperature sinteringreaction to occur, forming a calciumsilicate matrix called clinker.

All of the materials fed into the kilnbecome part of the clinker, forming anintrinsic matrix which, once cooled, is thenground with small amounts of gypsumand other minerals to produce the greypowder commonly recognised as cement.

Manufacture of the intermediate product clinker, is responsible for about 90% ofcarbon dioxide emissions.

Clinker is also a much easier material totransport than cement with most globaltrade occurring in this form.

Cement manufacture is predominantlydomestic, requiring access to mineralresources most commonly found inlimestone, energy supplies and markets.Demand shortfalls are made up fromimports of both clinker and cement.

Cement Australias approach togreenhouse gas abatement begins at agrassroots level: with our people; throughour operational processes; through afocus on research and development; aswell as by sharing our knowledge andskills across all of the communities inwhich we operate.

Cement Australia: Committed to Sustainable Partnerships

In 2008, Cement Australia launched arenewed carbon strategy, intended tomove the company to the reality ofoperating in an emissions tradingenvironment.

The strategy incorporates the followingcomponents:

A Foundation level that embedsknowledge and understanding of ourcarbon footprint as a key requirementof our personnel.

A pre-existing Company Approachwhich describes Cement Australiascurrent cultural approach.

A Strategic Approach whichincorporates three key pillars:

1. An abatement and compliancestrategy, which addresses the moretraditional abatement elements atthe levels of; operational excellenceor getting the best out of ourexisting plant and equipment;ensuring that best availabletechnology is in use where viable;and increasing our involvement inpursuing emerging technologieslargely through research,development and demonstrationinitiatives.

This strategy also targets the complianceaspects of acquitting our liabilities withinan emissions trading environment, andcomplying with the raft of new lawsrelating to climate change and energyefficiency.

2. A stakeholder strategyintended to ensure we maintainan appropriate focus oncommunications at our broaderdefinition of stakeholders.

3. A product strategy that aims toinfluence both the carbon aspects ofthe products that we make,sustainable materials, as well asendeavouring to influence the way inwhich our products are used,sustainable construction. It is thecase that, for the built environment,only a small percentage of energyand greenhouse emissions originatefrom the construction materialsthemselves. The way in which thosebuilding materials are utilised willhave a far greater impact on lifecycleemissions.

Our carbon emissions strategy is designed to get us carbon ready. It takes intoaccount the challenges of new government regulations and changing publicexpectations, while aiming to improve our position as an industry leader.

The carbon house

Cement Australia: Committed to Sustainable Partnerships

CompanyApproach

Vision

StrategicApproachFoundation Objectives

Colourkey

Getting carbon-ready

Must dos GuidingprinciplesBrand

attributes

People (employees)Capability and knowledge (measuring and reporting)

Abatement and compliance strategy

Stakeholder strategy Product strategy

Cement Australia: Committed to Sustainable Partnerships

Sustainable Performance:CO2 Emissions Case Study

The first graph on the right highlights CementAustralias absolute emissions of carbondioxide as well as our total sales of cementand cementitious product. We report ouremissions by:

1. their source, which includes emissions:from the limestone that we heat in our kilnsand which we refer to as processemissions (the upper green area on thegraph. The dark purple area shows theemissions associated with the use of thecoal used for heating the limestone andwhich we refer to as thermal emissions.The lowest mauve area represents theindirect emissions associated with our useof electricity.

2. Through significant investment in processtechnology and increasing market share ofsupplementary cementitious materials,Cement Australia has maintained emissionsat less than 1990 levels while increasing oursales of cementitious materials to nearly50%. We think this is a commendableachievement.

Case Studies

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thermal efficiency (GJ/t cli) CSI Global Termal eff. Data

Sustainable Performance:Energy Efficiency Case Study

Cement Australia: Committed to Sustainable Partnerships

Cement Australia and Resource Conservation

Cement Australia is focused ondelivering increasingly sustainablecement manufacturing operations tofuture generations. One particular areawhere the cement industry is able toprovide significant environmental andsocial benefits is in resource conservation.

As a significant consumer of limestoneand coal energy resources, CementAustralia is well aware of its environmentalfootprint and the need to minimise thiswherever possible. Fortunately, thecement manufacturing process providessome unique co-processing opportunities,and cement itself is able to capitalise onsome specific chemical symbioses thatoccur with certain byproduct materials

More importantly, the business areasderiving a return from principallysustainability-related operations have alsoimproved, with EBIT from SCM activitiesdoubling since 2004, and our AFRbusiness improving from a $1.1M lossin 2003 to a $5.7M profit in 2009.

AFR

Cement Australia has an active alternativefuels and raw materials program thatutilises a spectrum of industryby-products exhibiting either calorificvalue or material replacement value, aspartial replacements for our traditionalfuels and raw materials.

At the fuels end of the material spectrum,fossil-based alternatives provide tangibleresource efficiency benefits by reducingthe volumes of material ending up inlandfill, as well as conserving traditionalfossil fuel reserves for future generationsand extracting a beneficial use ofotherwise waste materials.

Cement Australias operations inQueensland have pioneered ouralternative fuels program with between15,000 and 20,000 tonnes of by-productmaterials being safely converted toenergy each year; thereby providing asustainable outcome for materialsincluding used oils, spent solvents, washwaters, resins, greases, waxes, paint andink among others.

Cement Australia: Committed to Sustainable Partnerships

SCM

At the alternative raw materials endof the spectrum, the use of substitutepre-calcined materials can and doesprovide substantial reductions in ouroverall greenhouse gas emissions.Such materials include fly ash and varioussteel industry slags, able to be utilised asboth raw materials and supplementarycementitious materials (SCMs), and ofwhich Cement Australia recycles well overa million tonnes per annum a majorrecycler by any measure.

However, the far greater benefit fromthese activities arises through thesignificant carbon emissions abatementthat this creates. For every tonne of flyash or ground, granulated blast furnaceslag used, there is an equivalent reductionof about 770 kg of carbon dioxide.Conservatively, Cement Australias useof SCMs provides annually:

a net greenhouse gas reduction ofapproximately 770,000 tonnes of CO2;

a reduction in the use of limestone rawmaterials of about 1.52 Mt; and

a reduction in the use of coal of about120,000 tonnes.

For Cement Australia, this is a greatexample of how a sustainable businessshould operate. By exploring andfacilitating all opportunities to fully utilisealternative fuels and raw materials, in ourproduct range, we are reducing our ownenvironmental impact, providing asignificant benefit to society in reducingthe amount of waste materials ending upin landfill, creating a dramatic reduction inthe carbon intensity of our product allthe while adding to the companysbottom line.

Cement Australia: Committed to Sustainable Partnerships

Sustainable Performance:New bag filter at Railton

Railtons Electrostatic Precipitators (ESP)were installed in 1965 and 1980 and are nowoutdated in their technology for de-dustingcement kilns.

The limitation of this method is that it requiresthe particulates to be conditioned at thecorrect temperature and moisture for themethod to work.

However, once the temperature and moisturelevels departed from the optimum operatingconditions the Railton ESP would simply notfunction adequately and large dust emissionswould occur.

The Solution

The newly installed technology passes theexhaust stream through several heat tolerantfilter bags that are periodically pulsed withair to loosen the filtered particulates intoa collector. Dust is then reinjected intothe process.

Apart from the greater efficiency of filter bagtechnology at normal running conditions, bagfilters are also immune to condition changesand will continue to operate even during kilnstart up and crash stops.

The Results

The new Redecam was successfullycommissioned 21st October 2009 andreplaces two electrostatic precipitators

All site stacks now serviced by moderntechnology bag filters

An 80% or greater reduction in measureddust emissions has resulted sincecommissioning

No increased environmental plumes fromkiln starts, stops and trips and additionalbenefits in small power savings and noiseemissions

Case Studies

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Cement Australia: Committed to Sustainable Partnerships

Sustainable Performance:Mt Etna Project

Mt Etna was the scene of long battlebetween conservationists and a companypurely focused on mining activities.From the early 1980s until the late 1990s,Central Queensland Cement (now CementAustralia) and conservationists engaged in abitter and angry debatethat came at great personal and financialcost to all parties involved.

Cement Australia recognised that anopportunity existed to rehabilitate thesite and bring all the stakeholders togetheron a project where everyone could bringsomething to the table.

Background

In 1997 a unique partnership betweengovernment, industry and the communitywas formed. Cammoo Caves was jointlypurchased and donated to the Mt EtnaCaves National Park, along with an additionalgift of connecting landby Cement Australia. The Mt EtnaReconciliation Ceremony on27 November 1999 marked the end ofthe campaign. The caves handover signalleda healthy change in direction.

Since then, Cement Australia hasinvested significantly in further rehabilitatingthe site, continuing to engage allstakeholders and involve the broadercommunity, through the unique researchwork being undertaken on Megafaunaremains found at Mt Etna.

Since 2004, this partnership approach hasproven extremely successful and the Mt Etnarehabilitation combined with the Megafaunaproject has contributed to strengthening ofstakeholder relationships.

In July 2009 the Mt Etna mining leases weresurrendered and discussions commenced toallow the gifting of remaining company landsto the Queensland Trust For Nature, toensure the ongoing protection of the area.

About Megafauna

Mount Etnas fossil deposits preserve oneof the most comprehensive rainforest fossildeposits on Earth, including dozens ofspecies of mammals, frogs, lizards and birds.These are known as megafauna. Some of themost exciting finds include the fossilisedbones and teeth of giant lizards, landdwelling crocodiles, bulldog-sized ringtailpossums, giant tree kangaroos andAustralias largest frog! Many of the specieshave modern living descendants in themountainous regions of Papua New Guineaand North Queenslands Wet Tropicsrainforests. Cave formations have sealed theremains of these ancient animals within largecave deposits. Scientists will use these caveformations to date the fossil deposits anddetermine how wet the rainforest wasmillions of years ago.

The animals that came after the dinosaur.

Megafauna

Mt EtnaThe past is our key

to the futureMegafaunaThe animals that came after the dinosaur.

Activity Book

rom: Amazing Facts About Australian Dinosaurs, published by Queensland Museuma blishing, 2006. Available from all good bookstores. RRP $14.95.

M na illustrations: Paul Lennon Queensland Museum

Cement Australia Pty LimitedABN 75 104 053 474

Head OfficeLevel 2, 40 McDougall Street

Milton QLD 4064Tel: +617 3335 3000Fax: +617 3335 3227

www.cementaustralia.com.au