Production activities such as mining, ore-processing and smelting have a strong dependency on water resources. Having clean and safe water resources is crucial for our production and the lives of surrounding communities. Typically, our water sources include surface water, mine water and municipal water, etc. We realise that excessive water consumption will affect the surrounding communities and the environment. Therefore, in the process of production and operation, we place great importance on and continuously improve water resource management and enhance water utilisation to reduce negative impacts on local water resources resulting from our operations.

• To maintain our overall water re-use rate of no less than 90%
• To reduce water intensity by 10% from 2020 by 2030

We strictly abide by the laws, regulations and local policies of the host countries, such as the “Water Law of the People's Republic of China”, the “Water Pollution Prevention and Control Law of the People's Republic of China”, and the “Environmental Protection Law of the People's Republic of China”. We also follow international initiatives and standards such as the “Environment, Health, and Safety General Guidelines”, “Mining Industry Environment, Health, and Safety Guidelines”, and “Basic Metal Smelting Industry Environment, Health, and Safety Guidelines” published by the International Finance Corporation (IFC). We conduct our business according to the principle of striving for excellence. During the reporting period, we had no significant incidents related to water withdrawal or discharge.

Our commitment to responsible water consumption is enshrined in our "Policy Statement on Water Resources Management", which explicitly states that the Company's Board and management team are responsible for water resource management strategies and performance, and that water resource management is incorporated in our business planning. We established necessary communication mechanisms with affected communities and stakeholders to effectively manage and share water resources and maintain the water balance of the whole basin.

We used AqueductTM Water Risk Atlas, a tool developed by World Resources Initiative (WRI), to conduct annual water risk analysis for 45 subsidiaries, covering physical risk indicators affecting water volume (such as baseline water stress, interannual variability, seasonal variability and drought risk), physical risk indicators affecting water quality (such as untreated wastewater and coastal eutrophication trends), and regulatory and reputational risk indicators (such as drinking water issues and sanitation issues), and adjusting the evaluation results based on each asset’s exposure risk coefficient to water stress.We will regularly evaluate the impacts of water resources and water availability at local level on stakeholders, so that we can ensure that water withdrawals during our operations will not affect their water demand.

We conducted a detailed evaluation of the water risk and water stress analysis and found that the actual risks of these assets in high-risk areas are controllable and will not have a significant impact on production and operation. In addition, we conducted a multi-scenario assessment of our water security risks based on the impact of climate change on the environment according to multiple time spans (for specific assessment results, please refer to Our “Climate Change Action Plan”).

To ensure that the impact of our activities on water resources is minimised and to ensure the security of the rivers and groundwater sources in mine areas, we locate our sites far away from the water sources or the upstream of the rivers. All subsidiaries are required to monitor the water quality of surrounding areas at least on a quarterly basis, increase control over river water quality, and protect the quality and quantity of water available to local communities and other residents in the river basin. We have developed a series of management measures to protect the water resources of the mine areas:

Our wastewater mainly generated in the processes of mining, metal smelting and processing. Pollutants in the wastewater include acidic and alkaline pollutants, oil pollutants, various heavy metals, cyanide, fluoride and other substances that pose environmental risks. Without reliable treatment and monitoring of wastewater, the pollutants in the wastewater will have a significant impact on the environment on which we and the surrounding communities depend for survival. For this reason, we regard wastewater management as one of the core issues in the construction of production facilities at all operating sites, and continue to be on full alert during operation.

We use our "Environmental Protection and Ecological Information Management Platform" for real-time online monitoring of the information about the total volume of pollutants and pollutant discharged so as to achieve the timely forecasting and early warning of the total volume and concentration of wastewater discharged. We follow the principles of "Rainwater and Sewage Diversion, Clean and Sewage Diversion, Source Reduction, Classified Collection, Treatment Depending on Quality, and Circular Utilisation" to recycle and treat industrial wastewater, domestic sewage, and rainwater separately, ensuring the sufficient utilisation of water resources and meeting the requirements of water cycle management throughout mining life cycle.

Regarding acid rock drainage (ARD), we worked with external experts to assess and develop methods to reduce ARD generation in mining areas where it may occur based on the “Global Acid Rock Drainage Guidelines”. We incorporate ARD into our overall water cycle system, recovering valuable metals from higher-concentration ARD and then neutralising it with low-concentration ARD, to re-use or discharge it after it meets the standards.

We will only proceed mining development activities if closure planning conducted during the feasibility phase demonstrates that ARD can be managed from both technical and economic perspective.