Newmont has been creating economic value and contributing to strong communities and healthy ecosystems for nearly 100 years. Sustainability is one of our core values and managing our economic, social and environmental risks, obligations and opportunities is central to our business strategy. I’m pleased to report on the progress our team made last year, and where we have more work to do to achieve our purpose, which is to create value and improve lives through sustainable and responsible mining.
In 2015, we reduced our total injury rate by 18 percent to among the best in the mining industry and our Akyem operation reached more than 400 days working without injury. This performance was overshadowed, however, by the loss of two colleagues – Brian Holmes suffered a fatal injury traveling in a shaft elevator in Nevada, and Pak Mastar Tedi succumbed to injuries he received when he was struck by a falling tree in Indonesia. These tragic events serve as a reminder that our work to improve behaviors and controls must continue until we reach our goal of zero harm.
We outperformed our cost and production targets, which helped us to increase adjusted EBITDA by 29 percent to $2.7 billion and nearly double free cash flow to $756 million, despite a nine percent drop in realized gold price. Strong business results gave us the means to repay debt, return capital to investors, and reinvest in growth. We acquired and integrated Cripple Creek & Victor, a gold mine in Colorado; sold two non-core assets, Waihi and Valcambi, for fair market value; and advanced construction of our Merian and Long Canyon projects to establish new gold districts in Suriname and Nevada. We also added five million ounces to our gold reserve base through our exploration program.
Efforts to streamline our business, transition people affected by transactions and build new projects meant changes for thousands of people. We were able to effect these changes while treating employees fairly and with respect, meeting local employment commitments and building a more diverse talent pipeline. In 2015, a handful of employees failed to work in accordance with our Code of Conduct – and some lost their jobs as a result – but the vast majority of our team did the right thing, day in and day out, even under difficult circumstances.
Newmont was named the mining sector leader by the Dow Jones Sustainability Index in 2015. Our team met targets to improve water management and concurrent reclamation planning, and established a baseline for local employment and procurement. We did not, however, meet our global target for complaints and grievances resolution, and are working to improve that performance. Last year we also introduced new standards and strategies on human rights, energy and climate change, and integrated sustainability objectives into our 2016 annual incentive compensation program. Other highlights include:
- Significantly reducing mercury and sulphur dioxide emissions in Australia by decommissioning our old roaster at KCGM and replacing it with an ultra-fine grind mill
- Advancing our Sagebrush Ecosystem Conservation Program in Nevada, designed to protect a broad range of local plant and animal species, in partnership with government
- Concluding a nine-year independent study in Indonesia that showed no adverse impacts related to marine tailings disposal at a former mine site
- Forming an independent advisory panel in Peru to help resolve a contentious land dispute
- Improving basic education near Ahafo through a five-year program launched by the Newmont Ahafo Development Foundation that funds grants, infrastructure and training
Most of these examples serve to demonstrate the importance we place on working collaboratively to improve our sustainability performance and standards. We are one of only six global companies piloting the United Nations Guiding Principles on Business and Human Rights Reporting Framework. Newmont is also an active participant in the International Council on Mining and Metals Sustainable Development Framework, the United Nations Global Compact, the Voluntary Principles on Security and Human Rights, the Partnering Against Corruption Initiative, and the Extractive Industries Transparency Initiative, among other globally recognized initiatives.
While I’m proud of our team’s accomplishments in 2015, we must always look for safer and more sustainable ways to run our business. Our goals for 2016 include eliminating fatalities; surveying our employees and external stakeholders to ensure that we understand their needs and expectations; integrating our risk management systems; and more closely aligning leaders’ compensation with our sustainability performance.
Please read the rest of this report for more detail on how we are building a more resilient business and working to make a stronger contribution to sustainable development. On behalf of the entire Newmont team, we appreciate your interest and welcome your feedback.