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The recent trends show the global instability, with only the global sustainable development and climate change agenda remaining unchanged.

Moreover, the ESG agenda today offers out-of-thebox solutions and new tools for achieving universal goals. The growing ESG awareness, and the synergy of global actors in providing solutions to ESG risks, challenges and opportunities encourage optimism. We are happy to be part of this synergy, striving to preserve our planet for future generations and ensure the prosperity for all.

Accession to the UN Global Compact, a comprehensive, public ESG assessment of Kazatomprom, our decarbonisation and carbon neutrality strategy, contribution to the achievement of the SDGs, a focus on promoting women's leadership and respect for human rights are some of our initiatives, which I hope will roll out effectively and bring new solutions and accomplishments in the near future.

Yerzhan Mukanov
Chairman of the Management Board

ESG and Sustainable Business

Our approach

Kazatomprom strives to comply with the principles of sustainable development across its operations and promotes responsible business and social responsibility practices among its partners, suppliers, and other stakeholders. The principles of sustainable development lie at the core of the Company's operations. Compliance with these principles is vital not only for long-term business development but also for instilling Kazatomprom's core corporate values.

GRI 2-23

Principles of sustainable development of NAC Kazatomprom JSC

When determining priority sustainability areas, Kazatomprom follows the principles of the UN Global Compact and the UN Sustainable Development Goals 2030, as well as other international standards and initiatives in this area.

Kazatomprom’s priority areas of sustainable development

Sustainable development milestones

2011
  • The Integrated Annual Report was based on the GRI non-financial reporting standards for the first time
2017
  • The Company developed Corporate and Social Responsibility Sustainability Programme 2017-2019
2019
  • Kazatomprom developed and published Sustainable Development Policy
  • The Company reinforced the corporate sustainability management function by establishing a dedicated unit, the Sustainable Development Department
  • The Integrated Annual Report includes information on sustainability management approaches and the Company's contribution to achieving the UN global sustainable development goals
  • The Company identified priority UN SDGs and key targets for each of the UN SDGs
2020
  • The ESG information in the 2020 Integrated Annual Report was independently assured in line with global best practices for the first time
  • More GRI indicators disclosed
2021
  • Kazatomprom started work on climate risk management
  • The Company identified sustainable development risks
  • The 2021 Integrated Annual Report included key indicators of achievement of the UN Conference on Trade and Development (UNCTAD) Sustainable Development Goals
  • The Company successfully passed the first supervisory audit and confirmed its certificate from the TÜV International Certification (Germany) in accordance with the requirements of two international standards, ISO 45001 and ISO 14001
  • All enterprises of the Group have the ISO 50001 energy management system in place. Energy audits were regularly conducted as part of the Group's energy management systems
2022
  • The Company identified and assessed climate risks
  • The Company developed the Decarbonisation and Carbon Neutrality of NAC Kazatomprom JSC until 2060
  • Kazatomprom developed a mid-term Sustainability Programme
  • The Company developed Kazatomprom Human Rights Policy
  • Kazatomprom joined UN Global Compact
  • The Company extended the list of GRI disclosures
  • Kazatomprom made disclosures as recommended by the Task Force on Climate-related Financial Disclosures (TCFD)
  • Kazatomprom received its first independent ESG rating from leading international rating agency S&P Global Ratings
Plans for 2023:

The Company has adopted a number of internal documents governing sustainability aspects and business processes on good governance and integrity, health and safety, environmental protection, personnel management, community involvement, and supply chain management.

Promoting sustainability standards and initiatives

Standard/initiative Kazatomprom's participation
UN and ILO Conventions We declare support and take them into account in our internal corporate documents
UN Sustainable Development Goals 2030 We declare support, integrate into daily operations, and submit reports
Key indicators of achievement of the UN Conference on Trade and Development (UNCTAD) Sustainable Development Goals We submit reports
UN Global Compact Office We submit reports

In the reporting period, Kazatomprom continued to improve its approach to sustainability management, striving to create the enabling environment for effective and continuous ESG transformation.

In November 2022, we organised a special session on ESG and sustainable development, with the line-up including the Company's top management and independent consultants. This session discussed the overall impact of Kazatomprom on the social and economic development of Kazakhstan, the latest developments in sustainability and ESG reporting (TCFD, ISSB, CSRD and EU taxonomy), the risk-based approach in ESG, ESG ratings and their requirements. We also held an internal session to review the draft Medium Term Sustainability Programme and receive comments and feedback from top management.

Sustainable development management system

GRI 2-9, GRI 2-13

Sustainability matters are addressed at a wide range of levels within the Company. At the strategic level, sustainability is a direct focus of the Board of Directors. The Board Committees oversee the compliance with the Company's sustainability principles and achievement of strategic objectives. At the management level, the Management Board oversees and monitors the implementation of strategic development areas, programmes, and activities, as well as monitors the achievement of sustainability goals and KPIs. Specific sustainability objectives are the responsibility of the relevant units at the regional and subsidiary level.

Sustainable development management structure

Contributing to the achievement of the UN Sustainable Development Goals

Kazatomprom fully shares the values of the UN Sustainable Development Agenda. The Company recognises the importance of all 17 UN SDGs and, as part of its operations, strives to make a feasible contribution to their achievement. Due to the specifics of our operations, we have identified six priority UN SDGs to which the Company makes the most significant contribution.

Kazatomprom’s Priority UN Sustainable Development Goals

Ensure healthy lives and promote wellbeing for all at all ages
Ensure access to affordable, reliable, sustainable and modern energy for all
Promote sustained, inclusive, and sustainable economic growth, full and productive employment and decent work for all
Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation
Ensure sustainable consumption and production patterns
Take urgent action to combat climate change and its impacts

The table below provides a brief description of the Company's actions under each of the priority UN SDGs. For more information on the projects and initiatives implemented in 2022 under each goal, see the thematic subsections of the Report.

Contribution to UN Sustainable Development Goals

UN SDGs Relevant SDG target Key results in 2022

3.4

By 2030, reduce by one third premature mortality from noncommunicable diseases through prevention and treatment and supporting mental health and wellbeing

  • KZT 4.4 billion allocated to finance employee health improvement and treatment programmes.
  • KZT 965 million invested in occupational medicine.
  • KZT 3.2 billion allocated to finance medical insurance programmes.
  • The Company took measures to prevent the spread and eliminate the consequences of COVID-19 (KZT 116 million).
  • Kazatomprom implemented measures to improve the quality of health of employees and draw their attention to a healthy lifestyle.

3.6

By 2020, halve the number of global deaths and injuries from road traffic accidents

  • 15,316 behavioural audits conducted.
  • 11,876 employees received safety culture training (leadership, defensive driving, 5 safety steps, etc.).
  • We conducted an employee survey to determine the current level of employee and management compliance awareness at all levels and found a positive change in employee behaviour, which was also confirmed by an increase in the number of respondents willing to express their opinion.
  • The Company continued using stop cards to stop unsafe works.
  • All CEOs of Kazatomprom's group companies made personal commitments under the Vision Zero concept.

3.9

By 2030, substantially reduce the number of deaths and illnesses due to hazardous chemicals and air, water and soil pollution and contamination

  • As part of the ESAP Roadmap, we approved ESRP Programme in 2022 to enable the Company to achieve sustainable development goals based on the UN SDG targets.
  • Working in line with the approved Integrated Environmental and Social Research for Sustainable Development (GRI standards) (ESRP programme), we developed an action plan including a risk assessment for proactive management of health, safety, environment and social issues in 2024 (Phase 3).
  • KZT 313 million invested in the implementation of Kazatomprom Environmental and Social Action Plan (ESAP).
  • The Company developed guidelines and projects to enhance the safety culture.
  • Kazatomprom successfully passed the second supervisory audit and confirmed its certificate from the TÜV International Certification (Germany) in accordance with the requirements of two international standards, ISO 45001 and ISO 14001.
  • We worked to reduce radon and its progeny as an occupational hazard at certain uranium mining operations.

7.1

By 2030, ensure universal access to affordable, reliable and modern energy services

  • The Company's photovoltaic plants generated 3.01 MWh.
  • Kazatomprom implemented projects in support of the global green energy trend.

7.3

By 2030, double the global rate of improvement in energy efficiency

  • KZT 1.1 billion was the actual economic effect of the Company's energy-saving and energy efficiency measures. The ratio to total electricity consumption made 6%.
  • All enterprises of the Group have the ISO 50001 energy management system in place.
  • Kazatomprom used a number of alternative energy sources (photovoltaic stations, solar heaters, and heat pumps).

7.a

By 2030, enhance international cooperation to facilitate access to clean energy research and technology, including renewable energy, energy efficiency and advanced and cleaner fossil-fuel technology, and promote investments in energy infrastructure and clean energy technology

Participation in international conferences:

  • 24-15 November 2022, Kazatomprom held the 10th International Research to Practice Conference "Current Problems in the Uranium Industry", with presentations "Reuse of Materials and Equipment" and "Decarbonisation at Kazatomprom”.
  • 26 September 2022, International Metallurgical Summit Kazakhstan, Almaty, with the presentation "Kazatomprom Decarbonisation Strategy".
  • 16-17 June 2022, the 12th Astana Mining & Metallurgy Congress, Nur- Sultan, Kazatomprom Decarbonisation Strategy and ESG. Speech theme: "Kazatomprom Decarbonisation Strategy”.
  • 27 May 2022, Qazaq Independent Directors, Almaty, with the presentation “ESG and Decarbonisation at Kazatomprom”.
  • 18-19 May 2022, Digital mining & metallurgy international online conference by SmartGOPro, with the presentation “Decarbonisation and ESG Programme of Kazatomprom".
  • 6 April 2022, Minex Forum Kazakhstan, Nur-Sultan, with the presentation “Kazatomprom's ESG and Decarbonisation Plans”.

8.2

Achieve higher levels of economic productivity through diversification, technological upgrading and innovation, including through a focus on high-value added and labourintensive sectors

  • The Company made its procurement plans for 2022 fully in the SAP ERP system.
  • We took actions under the 2022 Roadmap for Achieving Licence Cleanliness at Kazatomprom Group.
  • The project "Binding efficiency improvement in enabling works" is being implemented. In 2022, the approved measures were implemented. Optimisation benefits amounted to KZT 2.4 billion.
  • The Group filed 16 intellectual property applications and received 15 intellectual property titles.

8.4

Improve progressively, through 2030, global resource efficiency in consumption and production and endeavour to decouple economic growth from environmental degradation, in accordance with the 10-year framework of programmes on sustainable consumption and production, with developed countries taking the lead

  • In 2022, the Company started a project to develop a unified corporate geoinformation service and continued works to generate content for a digital map of the mines in Syrdariya and Shu-Sarysu provinces.
  • We made preparations to launch an automated emission monitoring system at Ulba Metallurgical Plant and SKZ-U LLP. We are set to complete the installation of the system in 2023.
  • We conducted emergency response training on alarm signals in case of a self-sustaining nuclear chain reaction at all nuclear installations of Ulba Metallurgical Plant.
  • In 2021, design and estimate documentation for Kazatomprom-SaUran refinery upgrade project was developed. In 2022, the Company commenced the construction under the Kazatomprom-SaUran refinery upgrade project.
  • In 2022, the effect worth KZT 6.3 billion was achieved through the Material and Equipment Reuse project. In addition, scrap metal dropped by 2,250 tonnes.

8.5

By 2030, achieve full and productive employment and decent work for all women and men, including for young people and people with disabilities, and equal pay for work of equal value

  • Employees are recruited through employment centres, educational institutions, electronic labour exchange, and other Internet resources on a competitive basis. In 2022, the competition was 16 candidates per vacancy in the central office and 10 candidates per vacancy for subsidiaries and affiliates.
  • The Company finances studies of 269 students majoring in industryspecific areas and occupations in universities and colleges of the Republic of Kazakhstan.
  • Men and women enjoy equal work, employment, and pay.
  • A local Izbasar programme is in place designed to develop young specialists.

8.8

Protect labour rights and promote safe and secure working environments for all employees, including migrant employees, in particular women migrants, and those in precarious employment

  • The collective bargaining agreement covers 99% of employees.
  • The health and safety management system covers 100% of the Group's employees.
  • All mining subsidiaries and affiliates of Kazatomprom operate in accordance with an Occupational Safety Management System corporate standard introduced in 2021.

9.1

Develop quality, reliable, sustainable and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human wellbeing, with a focus on affordable and equitable access for all

  • KZT 2.6 billion channelled into the regional budgets for the socio-economic development and infrastructure.
  • KZT 928.8 million allocated for social projects including the construction of an ambulance station, children's playgrounds and sports grounds, the purchase of educational equipment, site improvements, financial assistance to vulnerable social groups (coal, food aid, school supplies, and Christmas gifts) and a number of other socially significant initiatives.

9.4

By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resourceuse efficiency and greater adoption of clean and environmentally sound technologies and industrial processes, with all countries taking action in accordance with their respective capabilities

  • KZT 112.9 million in the well construction costs.
  • KZT 22.7 million allocated to maintain mining companies.
  • KZT 27.2 million allocated to maintain service companies.
  • A project was underway to build a refinery with a production capacity of 4,000 tonnes of uranium (U3O8) at Inkai JV LLP The project will expand production capacity from 3,200 to 4,000 tonnes of uranium per year and shift to a new type of finished product, uranium oxide
  • The construction of 900 t Zhalpak onshore facility at DP ORTALYK LLP was of the stage of development and approval of the design documents. The project’s goal is to improve operational efficiency and production development. The main benefit is the expansion of production
  • A uranium oxide refinery project with an annual capacity of 6,000 tonnes at Ulba Metallurgical Plant was at the design stage. The project is implemented to develop nuclear fuel cycle production. Expected benefits: business diversification, and higher value-added products
  • An 800,000 t sulphuric acid plant was of the feasibility study phase. The project’s goal is to provide sulphuric acid for mining operations and minimise shortages.

9.5

Enhance scientific research, upgrade the technological capabilities of industrial sectors in all countries, in particular developing countries, including, by 2030, encouraging innovation and substantially increasing the number of R&D workers per 1 million people and public and private R&D spending

  • 65 R&D contracts for a total of KZT 6.829 billion.
  • 264 employees, including 4 doctors of science and 27 candidates of science, are engaged in research and development.
  • The Group's employees submitted 2,236 innovation proposals, of which 2,016 were accepted and 1,292 were implemented.
  • Four contracts were signed to grant the right to use the inventions with JV Zarechnoye, JV Khorasan-U LLP, and JV ORTALYK LLP (two contracts).

9.6

Support domestic technology development, research and innovation in developing countries, including by ensuring a conducive policy environment for, inter alia, industrial diversification and value addition to commodities

  • Kazatomprom continues cooperation with Satbayev University that is home to the country's first International Science and Education Centre for the Nuclear Industry.
  • The Company signed a number of memoranda of cooperation on R&D and innovations.

12.2

By 2030, achieve the sustainable management and efficient use of natural resources

  • Research was conducted to improve the environmental safety of production:
    • Analysis of the environmental and social impacts of production facilities on the environment and local communities.
    • The Company started the Integrated Environmental and Social Research for Sustainable Development (GRI Standards) Programme 2022-2024 (ESRP) to assess the impact of uranium mining operations on the environment and local communities, develop measures to improve the quality of the environment and engagement with local communities.
    • Kazatomprom conducted research to streamline the production and consumption waste management processes in line with the Environmental Code of the Republic of Kazakhstan and GRI Standards.

12.4

By 2020, achieve the environmentally sound management of chemicals and all wastes throughout their life cycle, in accordance with agreed international frameworks, and significantly reduce their release to air, water and soil in order to minimize their adverse impacts on human health and the environment

As part of the R&D efforts, the following projects were implemented:

  • We developed a software product to control downhole pumping equipment.
  • The Company installed the hardware, software and technology for 4D monitoring of the uranium development by radio-frequency surveying of inter-well space at Inkai mine.
  • We developed and manufactured a complex downhole tool combined with an inclinometer and a cavity gauge.
  • The Company implemented Kazatomprom's Zero Waste Culture Development Programme (Phase 1, 2022).
  • We assessed the system of industrial environmental control (IEC) of soil, water and air for 12 uranium mines, as well as Ulba Metallurgical Plant (a processing plant in Kurchatov and Ulba Metallurgical Plant in Ust-Kamenogorsk).
  • Kazatomprom monitors surface and underground waters in the areas of its operations on an annual basis.

12.5

By 2030, substantially reduce waste generation through prevention, reduction, recycling and reuse

  • Subsidiaries and affiliates have in-house landfills for placement and longterm storage of drill cuttings classified as non-hazardous waste.
  • Separate collection points and special sites for the temporary storage of wastes on the territories of Kazatomprom's mines.
  • Regular timely removal of production and consumption waste for disposal.
  • As part of our Zero Waste Culture Development Programme, we plan (Stage 3 in 2024) to develop proposals on the introduction of technologies for processing and recycling production and consumption waste, and to develop science-based regulatory documents in the field of waste management.

12.6

Encourage companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle

  • Kazatomprom's production processes are powered by the most environmentally friendly in-situ leaching technology.
  • The Company annually prepares Integrated Reports where it discloses its influence in ESG areas, in particular, they show how resource consumption in the Group changes over the course of several years thanks to rational management approaches, lean production, and upgrade.
  • We adapted forms for collecting information on waste management in line with international reporting requirements on sustainable development (GRI).
  • We developed a uniform Template for Subsoil Use Disposal Cost Estimation for uranium mining companies.

13.1

Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries

  • Work is underway to attract international investment companies as part of a move to have more renewable/alternative energy sources.
  • As part of the corporate Decarbonisation and Carbon Neutrality Strategy, the conversion of hot water boilers from diesel fuel to liquefied gas in the boiler units of Karatau LLP's shift camp was commissioned in 2022 in line with safety requirements for gas supply systems.

13.3

Improve education, awareness-raising and human and institutional capacity on climate change mitigation, adaptation, impact reduction and early warning

  • We implemented measures to improve environmental culture: clean-ups, landscaping and territory improvement, planting trees, participation in the Earth Day campaign, etc.

Contribution to the Second Priority UN Sustainable Development Goals

In the reporting period, the Company continued to contribute to the achievement of the second priority UN Sustainable Development Goals.

UN SDGs Relevant SDG target Key results in 2022

4.4

By 2030, substantially increase the number of youth and adults who have relevant skills, including technical and vocational skills, for employment, decent jobs and entrepreneurship

  • The Company took actions to implement the Comprehensive Educational Programme 2019–2023.
  • Cooperation with higher educational institutions, internships, and work placement of young specialists.
  • Career guidance at schools.
  • We continued cooperation with the National Geographic Qazaqstan magazine and finance subscriptions to schools in Turkestan and Sozak districts.
  • Every year, the SANA information camp welcomes senior school students in the regions of our operations to develop their leadership potential.

6.3

By 2030, improve water quality by reducing pollution, eliminating dumping and minimising release of hazardous chemicals and materials, halving the proportion of untreated wastewater and substantially increasing recycling and safe reuse globally

  • Subsidiaries and affiliates launch wastewater treatment plants and biological water treatment plants to use purified water for irrigation and dust suppression.
  • Storage ponds, evaporation ponds, filtration fields, and septic tanks are in place at mining enterprises.

6.4

By 2030, substantially increase wateruse efficiency across all sectors and ensure sustainable withdrawals and supply of freshwater to address water scarcity, and substantially reduce the number of people suffering from water scarcity

  • 9,188.9 megalitres of water withdrawn from groundwater.
  • 608.9 megalitres of water withdrawn from municipal and other water supply systems.

10.2

By 2030, empower and promote the social, economic and political inclusion of all irrespective of age, sex, disability, race, ethnicity, origin, religion or economic or other status

  • No discrimination cases in the Company.
  • Kazatomprom conducted an anonymous survey to measure employees' awareness of protection of rights and interests, anxiety in the team, discrimination, and the problems in communications with managers.

15.1

By 2020, ensure conservation, restoration and sustainable use of terrestrial and inland freshwater ecosystems and their services, in particular forests, wetlands, mountains and drylands, in line with obligations under international agreements

  • ST NAC 5.3.2-2022 Arrangements for Remediation of Subsoil Operations Standard, which establishes general requirements for remediation of subsoil operations and land reclamation.
  • ST NAC 5.3.3-2022 System of Occupational Safety Standards. Environmental Protection. Standard Programme of Industrial Environmental Control of Insitu Leaching Standard.

15.5

Take urgent and significant action to reduce degradation of natural habitat, halt the loss of biodiversity, and by 2020 protect and prevent the extinction of threatened species

  • The Company completed the Zarechnoye mine's environmental impact assessment in 2022. Kazatomprom carried out comprehensive environmental studies, including analysis of biodiversity, soil, and drinking water, in the production and adjacent areas in the nearby settlements (Koksarai and Sarykol villages).
  • Fieldwork generated new data at the Semizbay and Irkol - Semizbay deposits. The Company documented fauna species, studied population, collected photos and traces of activities, and captured indicator species.
  • Kazatomprom identified rare and endangered species (Red List).

16.5

Substantially reduce corruption and bribery in all their forms

  • Since 2019, Kazatomprom has introduced enhanced anti-corruption programmes based on both Kazakh and UK laws.
  • Kazatomprom and 23 subsidiaries and affiliates introduced the role of compliance officer whose mandate includes, among other things, anticorruption expertise and actions.
  • The Group carries out annual corruption risk analysis.
  • The group's compliance officers conduct due diligence of counterparties, including their involvement in corruption offences.
  • The Company conducts a massive anti-corruption awareness campaign among employees of both Kazatomprom and suppliers.
  • Anti-corruption clause has strengthened in procurement contracts since 2019.
  • Since 2021, the procurement contracts have included a Supplier Code of Ethics, which, among other things, sets out rules of conduct for suppliers with regard to anti-corruption efforts. A breach of this code is grounds for Kazatomprom to terminate the contract unilaterally.
  • We handled 88 grievances received through the Hotline.

17.6

Enhance the global partnership for sustainable development, complemented by multi-stakeholder partnerships that mobilize and share knowledge, expertise, technology and financial resources, to support the achievement of the sustainable development goals in all countries, in particular developing countries

  • Kazatomprom is a member of six international nuclear industry organisations, four national sectoral organisations, and one international sustainability organisation.
  • The Company annually publishes integrated annual reports where it discloses non-financial reporting indicators in accordance with the GRI.
  • The Company engages an independent auditor to assure non-financial data in integrated annual reports.

Commitment to the UN Global Compact Principles

GRI 2-23

In 2021, Kazatomprom joined the UN Global Compact initiative (UNGC) and continues to work towards this cause. The Global Compact's ten principles in the areas of human rights, employment, environment, and anti-corruption are included in the substantive topics that the Company has identified as the most significant and relevant.

Cooperation with the UNGC builds trust with the investment community, allows us to measure and demonstrate our progress in implementing the Ten Principles in a consistent and coherent manner, and provides an opportunity to benchmark our progress against that of other global companies.

Every year, UNGC participants publish a Progress Report, which is available on the official UNGC website. In June 2023, Kazatomprom will release its first Progress Report. In addition, Kazatomprom employees have access to the UNGC's academic platform, where various workshops and conferences are held monthly, covering the most significant topics of the global ESG agenda.

Principles Section of the Report
1. Businesses should support and respect the protection of internationally proclaimed human rights Creating an Attractive Working Environmenа
2. Businesses should make sure that they are not complicit in human rights abuses Creating an Attractive Working Environment
3. Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining Creating an Attractive Working Environment
4. Businesses should uphold the elimination of all forms of forced and compulsory labour Creating an Attractive Working Environment
5. Businesses should uphold the effective abolition of child labour Creating an Attractive Working Environment
6. Businesses should uphold the elimination of discrimination in respect of employment and occupation Creating an Attractive Working Environment
7. Businesses should support a precautionary approach to environmental challenges Taking Care of Our Planet
8. Businesses should undertake initiatives to promote greater environmental responsibility Taking Care of Our Planet
9. Businesses should encourage the development and diffusion of environmentally friendly technologies Taking Care of Our Planet
10. Businesses should work against all forms of corruption, including extortion and bribery Corporate Ethics and Compliance

Stakeholder engagement

GRI 2-29

Kazatomprom sees its mission as creating value for stakeholders in alignment with their interests and needs. To deliver on this mission, the Company is building a system of effective interaction with stakeholders, using various engagement methods and communication channels, and paying special attention to improving two-way communication systems and receiving feedback.

Key underlying documents regulating the Company’s stakeholder engagement are Kazatomprom Disclosure Policy and Stakeholder Map.

To identify and select stakeholders for further engagement, Kazatomprom relies on the assessment of the impact on its current operations and strategic development, as well as the established practice of the Company's engagement with external stakeholders and their dependence on its performance.

Stakeholder communication channels:

The Company updates its stakeholder map annually. In 2022, a management survey confirmed the relevance of the map.

Kazatomprom stakeholder ranking map 2022

Stakeholder engagement mechanisms

GRI 2-29
Stakeholder’s interest in the Company Stakeholder engagement mechanisms
Shareholders

Economic profit/consolidated net profit/economic performance

Free funds for development and dividends

Net asset value (NAV)

Corporate governance rating

Market share/Market presence

Reduction of environmental emissions

Decisions of the General Meeting of Shareholders of the Company, the Board of Directors and Management Board of the Fund, the Board of Directors of the Company

Joint working groups, meetings, negotiations

Discussion of the implementation status of sustainable development processes with the Fund

Regular reporting to shareholders, including Samruk-Kazyna, in the agreed format

Special session on sustainable development with the relevant board of directors

Correspondence on the operations of the Group

Surveys, questionnaires, testing

Internal corporate communication channels

Annual report and website of the Company

Customers

Market share/Market presence

Products and service labelling

Marketing communications

Reduction of environmental emissions

Customer feedback

Meetings, negotiations, questionnaires

Signing of agreements, memoranda, and strategic cooperation agreements

The Hotline

Annual report and website of the Company

Investment analysts

Analysis of various aspects of the Company's operations

The Company's entering into analytical ratings

Conferences, forums, annual meetings, analyst days, production site visit with investors

Meetings, negotiations, questionnaires

Annual report and website of the Company

Quarterly operating results

Quarterly financial statements and press releases

Senior managers and staff

Employment, relations between employees and management, non-discrimination/diversity and equal opportunities/level of employee satisfaction with work and the work of Company-controlled services

Training and education

Improvements in the production safety culture

Fair and transparent conditions for staff remuneration, professional growth of employees, safe working conditions

Staff development

Production safety briefings and implementation of programmes to improve working conditions

Implementation of measures for social support of workers and members of their families

Staff training, upskilling and development

Regular meetings with management, negotiations

Notification of employees on the Company's operations, professional growth opportunities through corporate magazines, social media

Surveys, questionnaires, testing

The Hotline, internal corporate communication channels, website of the Company

Suppliers of goods, works, and services

Equal access to tenders

Benefits from the implementation of category-based procurement strategies

Support for domestic manufacturers

Variety of procurement methods

Regular analytical meetings, negotiations, business correspondence

Signing of agreements, memoranda, strategic cooperation agreements, licensing

Information/reporting on the implementation of production, investment and social plans and obligations forwarded to the Company

Reporting on the Company's financial and economic performance

Consideration of letters (requests) sent to the Company

Surveys, questionnaires, testing

The Hotline

Annual report and website of the Company

Open access to information on the procurement portal and the Company's official website

Business communities (Associations, National Chamber of Entrepreneurs, Union of Legal Entities)

Participation of the Company in improvements in and compliance with industry standards

Participation of the Company in improvements to the business environment

Support for the Company at the state authorities through mechanisms of interaction of the business environment with the state authorities, assistance with the promotion of the legislative initiatives of the Company

Development of proposals on amendments and supplements to the laws of Kazakhstan

Signing of agreements, memoranda, and strategic cooperation agreements

Joint working groups, meetings, negotiations, questionnaires

Annual report and website of the Company

Partners

Market share/Market presence

Unit production cost of U3O8 produced by the Company and all uranium mining subsidiaries

Memorandums of association

Decisions of the General Meeting of Shareholders/participants of subsidiaries and affiliates, boards of directors, Supervisory Board of subsidiaries and affiliates, joint consultative and advisory bodies

Joint working groups, joint inspections

Meetings, negotiations, business correspondence, questionnaires

Reports on current operations

Correspondence on the operations of the Group of subsidiaries and affiliat

A annual report and website of the Company

Government authorities

Compliance, stability and business sustainability

Creation and maintenance of jobs

Representation of the country's economic interests in the international arena (economic, political and image benefits for the country through the prism of development of the uranium industry in Kazakhstan)

Improvement in the energy and resource efficiency in production

Reduction of environmental emissions

Verification of the compliance by the Company’s subsidiaries and affiliates with licensing and contractual obligations

Audit of compliance with the laws of Kazakhstan, development of proposals on amendments to the laws of the Republic of Kazakhstan

Coordination of the subsoil use contracts and state registration of the right of subsoil use

Information/reporting on the implementation of production, investment and social plans and obligations in line with requests

Negotiations, business correspondence, control, production, operational and other meetings, questionnaires

Reports on the performance by the Company’s subsidiaries and affiliates of licensing and contractual obligations, submission of quarterly reports to the Ministry of Energy of the Republic of Kazakhstan, reporting on the Company's financial and economic performance

The Hotline

Annual report and website of the Company

International organisations

Participation of the Company in international agreements and initiatives

Conferences, forums, annual meetings

Signing of agreements, memoranda, and strategic cooperation agreements

Joint working groups, meetings, negotiations, questionnaires

Annual report and website of the Company

Lenders

Economic profit/consolidated net profit/economic performance

Free funds for development and dividends

Net asset value (NAV)

Investment and procurement practices/benefits from the implementation of category-based procurement strategies

Regular analytical meetings, negotiations, business correspondence, questionnaires

Media coverage of the Company's operations

The Hotline

Annual report and website of the Company

Local executive authorities

Compliance with requirements, creation and retention of workplaces, sponsorship and philanthropy

Occupational health and safety of the employees of the Company

Improvement in the energy and resource efficiency in production, reduction of environmental emissions

Memoranda of cooperation between the local executive authorities and the Company to support and develop the social sector in the regions

General agreements between the local executive authorities and the Company on financing the social sector in the regions

The Hotline, social media

Annual report and website of the Company

CSOs and local communities

Improvements in the production safety culture

Improvement in the energy and resource efficiency in production

Reduction of environmental emissions

Compliance with legislative requirements, sponsorship and philanthropy

Training and education

Public hearings

Developing proposals to amend and supplement the laws of Kazakhstan

Media coverage of the Company's operations

Surveys, questionnaires, testing

Information on the current operations of the Company, its subsidiaries and affiliates

Handling letters (complaints, requests) sent to the Company

The Hotline, social media

Annual report and website of the Company

Trade union

Creation and maintenance of jobs

Improvements in the production safety culture

Public hearings

Signing of agreements, memoranda, and strategic cooperation agreements

Regulation of employment relations with the employees of the Company through the collective bargaining agreement

Remuneration of employees in accordance with the labour laws of Kazakhstan, training and education, safe working conditions

Information on the current operations of the Company's subsidiaries and affiliates

Receiving letters (complaints, requests) sent to the Company

The Hotline, social media, internal corporate communication channels

Annual report and website of the Company

Subsidiaries and affiliates

Employment and level of remuneration, relations between employees and management, nondiscrimination, diversity and equal opportunities

Improvements in the production safety culture, training and education

Market share/Market presence, products and service labelling

Decisions of the Company as a participant/shareholder of the subsidiaries and affiliates

Reporting in accordance with the Non-Disclosure Agreement between Samruk- Kazyna and Kazatomprom

Decisions of the General Meeting of Shareholders of the Company, decisions of participant of subsidiaries and affiliates, the Board of Directors and Supervisory Boards of subsidiaries and affiliates

Audit of compliance with the laws of the Republic of Kazakhstan and the internal regulations of the Group

Verification of the compliance by the Company’s subsidiaries and affiliates with licensing and contractual obligations

Developing proposals to amend and supplement the laws of Kazakhstan

Provision of information at the request of the government authorities on different lines of business of the Company

Signing of agreements, memoranda, and strategic cooperation agreements

Orders and instructions, hearings of management reports (subsidiaries and affiliates)

Information/reporting on the implementation of production, investment and social plans and obligations forwarded to the Company

Operational and other meetings, public hearings

Production safety briefings, training and education

The Hotline, social media, internal corporate communications channels, annual report and the website of the Company

Specialised organisations (including Samruk-Kazyna Trust Social Project Development Fund)

Implementation of projects and programmes aimed at addressing socially significant issues

Function of a single operator of philanthropic efforts of the Samruk-Kazyna group

Incoming and outgoing correspondence

Business correspondence

Meetings, negotiations, etc.

Reports on current operations

Media coverage of the Company's operations

The Hotline

Company’s website

Stock exchanges

Compliance

Timely submission of financial statements and other information

Meetings and negotiations

Company’s website

Report

Reports on current operations

Websites of exchange regulators

Consultations between stakeholders and the Company

Kazatomprom has adopted specific procedures for conducting consultations on economic, environmental and social issues between key stakeholder groups and the highest governing body.

Economic, environmental and social issues are regularly considered by the specialised Committees of the Board of Directors and the supervisory boards of subsidiaries and affiliates. Relying on the preliminary work performed by the BoD committees, namely preliminary consideration of the most important matters reserved to the Board of Directors and development of recommendations for decision-making on these matters, the Board of Directors is able to quickly adapt to the changing circumstances and observe particularly important principles of corporate governance.

Processes to remediate negative impacts

GRI 2-25

As a public company, Kazatomprom strictly complies with listing rules and disclosure requirements. The Company's corporate governance system rests on the principles of efficiency, prompt response, and transparency, ensuring good governance and control in all areas: human rights protection, shareholder protection, HR policy, supplier relations, law and ethics, occupational health and safety, environmental protection, corporate conflicts and conflicts of interest, as well as issues and processes related to remediation of potential and/ or emerging adverse impacts.

We fully recognise that any incident involving our business and/or a breach of the law could lead to negative consequences, such as financial losses, undermined the trust of investors and stakeholders, lower share prices, damage to the reputation of Kazatomprom and Samruk-Kazyna, fines, etc.

Kazatomprom has built, and continues to develop, a system of engagement with all stakeholders, using a variety of communication methods and channels, which allows focussing on improvements in two-way communication systems.

To ensure effective cooperation in identifying and/or addressing adverse impacts, the Company has established clear and accessible grievance mechanisms to allow all stakeholders to raise concerns about potential and/or actual adverse impacts and to seek response and remedy. All our employees and stakeholders can communicate their requests, questions, suggestions or complaints through the communication channels in place. Moreover, Kazatomprom's internal documents oblige all employees who become aware of any circumstances and/or actions related to the occurrence of negative impacts to report them to the Company's hotline, via internal corporate communication channels, social media accounts or website. Kazatomprom strictly prohibits any retaliatory measures against whistleblowers, guaranteeing confidentiality and anonymity.

The materiality of all issues raised is established against the criteria approved and appropriate to every topic raised. Depending on the actual/ potential adverse impact and/or the complaint received, Kazatomprom will take appropriate corrective action.

In particular, we seek to identify all possible risks in advance and reduce our exposure to operational, environmental and financial damage to the lowest possible level to eliminate our negative impact. The Company follows this approach in all relevant business processes, including strategy, business planning, business operations and capital value creation processes, and has already effectively identified and remediated adverse impacts, as well as ensures effective control of risk mitigation. Kazatomprom takes adequate and timely measures to prevent and/ or eliminate adverse impacts through rigorous processes to investigate hazardous conditions, potential accidents/incidents and awareness of environmental conditions, as well as a responsible approach.

We assess the effectiveness of our communication channels through corporate culture audits, in particular through staff engagement and interaction within the Company, the promptness of crisis resolution, production efficiency and the achievement of our strategic development goals.

Creating economic value

GRI 3-3

Kazatomprom openly and transparently informs shareholders, employees, partners and other stakeholders about its efforts taken to create economic value. This disclosure helps the Company's stakeholders see how the Group creates and distributes economic value over the reporting period.

Retained economic value amounted to KZT 472.96 billion in 2022.

Direct economic value generated and distributed, KZT billion

GRI 201-1
Description Stakeholder group 2020 2021 2022
Direct economic value generated
Incomes56 Broad stakeholder group 667.12 761.53 1,146.9
Distributed economic value, incl.
Operating expenses57 Suppliers of goods, works, and services 288.11 373.59 440.95
Salaries Staff 50.72 53.05 71.69
Financial expenses Shareholders, creditors, investment analysts 7.68 6.71 8.43
Taxes, except income tax Government authorities 24.73 26.14 32.57
Income tax expenses 63.78 61.62 110.74
Other expenses 9.73 15.86 8.43
Social expenditures (investment in local communities) Local communities 1.01 4.54 1.13
Retained economic value 221.37 220.03 472.96

Determining material topics

GRI 3-1

The Company’s Department for Strategic and Sustainable Development has embarked on preparing an integrated annual report (IAR) of Kazatomprom for 2022 to comply with the disclosure and transparency rules of the listing agency of the United Kingdom DTR 4.1.3 (UKLA’s Disclosure and Transparency Rules), the requirements of the Kazakhstan Stock Exchange (KASE) and the Astana International Financial Centre (AIX) for the publication of annual reports as well as with Kazatomprom’s Information Disclosure Rules and the corporate governance standards recommended by the Company’s Corporate Governance Code. At the same time, the 2022 IAR will be prepared in line with the GRI, SASB, and TCFD non-financial reporting standards.

As the updated GRI 2021 standards have taken effect, in particular, GRI 1: Foundation 2021 (replaces GRI 101: 2016) and GRI 3: Material Topics 2021 (replaces GRI 103: 2016), it is necessary to take a different approach to determining material topics for disclosure in the Company’s IAR. According to GRI 3: Material Topics 2021, the organisation’s highest governance body should review and approve the list of material topics. If such a body is not in place, the list should be approved by a senior executive or group of senior executives in the organisation. In addition, the organisation should also describe the process it has followed to determine its material topics, including how it has identified its impacts and how it has prioritised the impacts for reporting based on their significance.

The Company’s Department for Strategic and Sustainable Development carried out a number of activities to determine the material topics for the Company and their disclosure in the 2022 IAR. It conducted a stakeholder survey to determine material topics to be disclosed in the 2022 IAR. These topics demonstrate the Company’s significant impacts on the economy, environment, and people, including impacts on their human rights. Overall, the Company received responses from the following stakeholder groups:

The list of topics for evaluation included the topics of the GRI Topic Standards and Kazatomprom’s indicators. The stakeholders were asked to rate each topic on the organisation’s impact on the economy, environment, and people, including impacts on their human rights, on a 5-point scale, with 1 being “very low” and 5 being “very high”. The preliminary list included topics that scored 4 and 5 points out of 5 possible.

Also, the Company’s Department for Strategic and Sustainable Development analysed the material topics for the leading companies in the nuclear and mining industries, as well as the material ESG-related issues for independent international rating agencies.

The Company sent additional requests to its structural units to ensure full compliance with GRI 3-1, GRI 3-2 and GRI 3-3. The structural units looked into the material topics for the companies in the nuclear and mining industries that were determined by the survey and analysis as well as the material ESG issues for the rating agencies that deal with the positive and negative impacts of every topic on the environment, economy and people, including their human rights.

Thus, they developed a list of 16 material topics to be disclosed in the 2022 IAR. The list was approved by the Management Board.

Changes in material topics

GRI 3-2
2021 2022
Economic topics
GRI 201 Economic Performance GRI 201 Economic Performance
GRI 202 Market Presence
GRI 203 Indirect Economic Impacts GRI 203 Indirect Economic Impacts
GRI 204 Procurement Practices GRI 204 Procurement Practices
GRI 205 Anti-corruption GRI 205 Anti-corruption
GRI 207 Tax
Environmental topics
GRI 302 Energy GRI 302 Energy
GRI 303 Water GRI 303 Water
GRI 304 Biodiversity and ecosystems GRI 304 Biodiversity and ecosystems
GRI 305 Emissions GRI 305 Emissions
GRI 306 Effluents and Waste GRI 306 Effluents and Waste
GRI 307 Environmental Compliance
Social topics
GRI 401 Employment
GRI 402 Labour/Management Relations
GRI 403 Occupational Health and Safety GRI 403 Occupational Health and Safety
GRI 404 Training and Education
GRI 405 Diversity and Equal Opportunity
GRI 412 Human Rights Assessment
GRI 413 Local Communities GRI 413 Local Communities
GRI 415 Public Policy
GRI 419 Socioeconomic Compliance
N/A Human rights
Kazatomprom indicators
KAP1 Operational life of production sites KAP1 Operational life of production sites
KAP2 Emergency preparedness KAP2 Emergency preparedness
KAP3 Radiation safety KAP3 Radiation safety

The list of material topics for 2022 was used to prepare the 2022 IAR for detailed disclosure of the economic, environmental and social impacts of the Company in line with the requirements of the GRI, SASB and TCFD standards.

As required by GRI 3-3, the Company’s Department for Strategic and Sustainable Development conducted an additional analysis of potential positive and negative impacts of the Company on the economy, environment or people, including impacts on their human rights.

Amid a global debate on the challenges of climate change and the benefits of ESG development, we have seen a growing interest in the nuclear industry from the global community.

Today, decarbonisation is not only a tool to meet environmental and climate targets, but also a way to ensure that the products are differentiated and globally competitive. In this regard, Kazatomprom is set to play a significant role in the energy transition effort, while remaining committed to its strategy of long-term value creation, maintaining high production and environmental safety standards.

Given the global trends and the country's commitments, Kazatomprom recognises it can make a significant contribution to help the nation achieve its goals and objectives. Kazatomprom developed and approved a Decarbonisation and Carbon Neutrality Strategy in November 2022.

Achieving decarbonisation targets hinges directly on the implementation of Kazatomprom's energy saving and energy efficiency programme, which in turn addresses not only environmental issues but also brings economic benefits to the Company. To date, greenhouse gas emissions for 2022 have not been exceeded against 2021, remaining at the same level.

The emission reduction expectations for 2023 are already several times higher than the plans outlined in the 2027 Business Plan and targets in the Decarbonisation Strategy.

Aliya Akzholova
Managing Director of Operations

Climate Change and Energy Efficiency

Our approach

GRI 3-3

Global climate change poses a number of serious risks to the economy, environment, and human health. The key risks are water scarcity, food shortages, biodiversity loss and natural disasters.

To combat climate change and its negative impacts, 197 countries adopted the Paris Agreement on 12 December 2015, striving to reduce significantly global greenhouse gas emissions and limit the global temperature rise to 2 degrees Celsius. The Republic of Kazakhstan ratified the Paris Agreement and pledged to take measures to combat climate change, defining a lowcarbon development vector for itself.

While adhering to global priorities and following the national strategy, Kazatomprom also seeks to contribute to the fight against climate change. As a world leader in the production of uranium raw materials, the Company is the main supplier of fuel for nuclear power plants and ensures the development of the world's nuclear power industry, thereby providing a significant indirect positive impact in the fight against climate change. With the changes in the global taxonomy that took place in 202258, nuclear power is now officially one of the low-carbon sectors of the economy and contributes to a significant reduction in greenhouse gas emissions into the atmosphere.

Mitigation of climate impacts is one of Kazatomprom's key areas, especially in light of the TCFD (Task Force on Climate-related Financial Disclosures) initiative, whose recommendations help to manage better the risks and opportunities associated with climate change and make more informed financial decisions.

In the reporting period, as part of the work aimed at reducing climate impacts, the Company developed a Decarbonisation Strategy in accordance with the TCFD recommendations and plans to achieve carbon neutrality by 2060. The Strategy includes a programme and action plan to reduce greenhouse gas emissions for each subsidiary and affiliate of the Company, as well as climate risks and opportunities.

Climate mitigation is not only a contribution to the implementation of the Paris Agreement’s provisions. The Company also considers it as one of the tools of the business strategy helping to reduce energy costs and reducing the risks associated with legislative restrictions on greenhouse gas emissions, as well as increasing the competitiveness of the Group in the future.

Indicators and targets

In the Strategy for Decarbonisation and Carbon Neutrality, we identified three main development scenarios:

The realistic and optimistic scenarios prioritised by the Company include a list of measures, including increasing energy efficiency, applying offset mechanisms, increasing the use of renewable energy sources, modernising the car fleet or switching to electric transport, and reducing carbon intensity.

Realistic scenario

A realistic development scenario implies the implementation of energy efficiency measures and increasing the share of renewable energy to achieve the goal of a 10% reduction in direct and indirect GHG emissions in 2030, 55% in 2045, and 70% in 2050 as from the level of 2021.

Goals of the Decarbonisation Strategy in the realistic scenario:

The scenario suggests a gradual reduction in the carbon intensity of the country's energy network due to the moderate achievement of the set goals for increasing the share of renewable energy and alternative energy sources in the amount of 10% by 2030 and 30% by 2050.

Decarbonisation targets in a realistic scenario in the short-, medium-, and longterm prospect

Indicator 2021 2030 2045 2060
Target share of GHG reduction, % 0% 10% 55% 100%
Target amount of GHG emissions at Kazatomprom, ’000 tonnes of CO2 - 848.8 252.0 0
Share of RES and Alternative Energy Sources at country level, % 3% 10% 24% 40%

The scenario includes several methods to reduce greenhouse gas emissions:

Optimistic scenario

The optimistic KAP decarbonisation scenario outlines more ambitious plans to reduce GHG emissions, taking into account the achievement of carbon neutrality, as well as the goal of achieving a 15% reduction in GHG emissions by 2030 from the base year of 2021 and with an early achievement of carbon neutrality by 2045.

Goals of the Decarbonisation Strategy in the optimistic KAP scenario:

Decarbonisation targets in an optimistic scenario in the short-, medium-, and long-term prospect

Indicator 2021 2030 2045 2060
Target share of GHG reduction, % 0% 15% 100% 100%
Target amount of GHG emissions at Kazatomprom, ’000 tonnes of CO2 - 799.8 0 0
Share of RES and Alternative Energy Sources at country level, % 3% 15% 42% 62%

To achieve the goals of the Strategy, the Company developed potential activities based on the analysis of the main sources of GHG emissions, taking into account their distribution by direction and priorities. Short-term, medium-term and long-term activities are highlighted. We also assessed their potential to achieve the goals of the Decarbonisation Strategy.

Short-term activities Medium-term activities Long-term activities
  • Optimisation measures on energy efficiency (scheduled recommendations of energy audits)
  • Optimisation of the use of road transport
  • Installation of heat pump units (HPU)
  • Capital measures for production optimisation and energy efficiency
  • Partner RES under the corporate Power Purchase Agreements (PPA)
  • Implementation of hybrid and electric transport
  • Construction of own RES facilities
  • Implementation of GHG absorption and compensation mechanisms

Approach to identifying transitional and physical risks

Significant physical risks

We used the EY Climate Risk Universe tool to identify significant physical and transition risks that could affect the Company's operations. This tool is based on research by international experts who have studied the impact of climate risks on various activities. Using this tool and taking into account the relevant business processes of the Company, we identified significant risks, such as road transport, rail transportation, the chemical industry, and mining and processing.

The Company has identified four categories of significant physical risks:

Each risk category has potential impacts on transportation, the chemical industry, and mining and processing. For each category of risks, we carried out a detailed analysis on their impact in all Group’s subsidiaries and affiliates, depending on their geographical location:

Transitional climate risks

Transitional risks mean that the Company may face additional financial costs due to the tightening of carbon regulation. This can lead to higher costs for carbon units (as part of the carbon tax), and raw materials, as well as for the introduction of new, lower carbon technologies. In addition, tightening reporting and goalsetting obligations may also entail additional costs.

The Company identified five categories of Transitional Climate Risk:

Determination of transitional risks and the level of their impact on the Company

Transitional Climate Risk Risk Level Risk Description The Company’s Measures and actions taken to mitigate the consequences
1. Expanding/ strengthening emission reporting obligations Low Additional disclosure requirements will result in additional costs for establishing and maintaining GHG emission monitoring processes. Reports that do not meet stakeholder expectations can undermine investor confidence and lead to lower company valuations. Given the tightening requirements of national (changes in Kazakhstan’s emissions trading system) and international (TCFD within the LSE) legislation, this risk has a direct impact on Kazatomprom. Timely risk surveillance and disclosure. KAP sets decarbonisation goals and develops a long-term strategy to achieve carbon neutrality through improved energy consumption, equipment replacement, low-carbon technologies, and offset mechanisms. The Company regularly monitors greenhouse gas emissions by quantifying the volume of direct and indirect greenhouse gas emissions in accordance with international standards and guidelines and generally accepted guidelines, such as the GHG protocol and ISO 14064.
The Company is doing the necessary work and plans to deepen climate-related disclosures, risks and opportunities as required by the TCFD.
2. Increasing costs of greenhouse gas emissions Low KAP facilities are not quota-based installations, however, the projected introduction of a carbon tax on fossil fuel consumption, due to its specificity, has a direct impact on Kazatomprom. To reduce the impact of the risk of increasing costs on GHG emissions, the Company plans to reduce the volume of fossil fuel consumption through the gasification of boiler houses and introducing measures to optimise transport, switch to purchased energy from renewable sources (or use own green energy, in the case of investments in renewable energy sources) and measures of optimisation character.
3. Low-carbon transition costs Medium The increase in the share of purchased electricity and thermal power from renewable sources is higher than expected, and therefore an increase in the tariff for purchased electricity will require gradually increasing volumes of investments in low-carbon technologies, both intensive (production optimisation) and extensive (RES) in nature. Kazatomprom is considering the possibilities of maximising the reduction of direct and indirect GHG emissions in the course of its production activities, and offsetting the remaining non-reducible emissions (through offsetting mechanisms, including Carbon Absorption Projects).
4. Increasing the cost of raw materials Medium Modern manufacturing and chemical industries, built on hydrocarbons, use them as a raw material and as an energy source. Carbon pricing will have a much larger impact on raw material prices compared to other industries. Increased raw material costs could be passed on to consumers, which could lead to lower demand. Efficient production management through the promotion of ESG (Resource Conservation and Energy Efficiency Improvement) principles and the overall implementation of climate risk management will allow the Company to monitor and measure the impact magnitude and manage this risk more sustainably.

For each of the risks, the Company carried out a detailed assessment and developed measures and actions to reduce or mitigate the consequences of the risk.

The Group integrates all developed measures into the overall risk management system.

Assessment of greenhouse gas emissions and carbon footprint

SASB EM-MM-110a.2

The President of the Republic of Kazakhstan announced at the International Conference "Ways to Achieve the Goals of the Paris Agreement and Carbon Neutrality in Kazakhstan" in 2021 to develop a Carbon Neutrality Doctrine in the country. In this regard, 2021 was regarded as the base year for calculating greenhouse gas emissions of all scopes. 2021 was also regarded by Samruk-Kazyna JSC as the base year for all portfolio companies.

To achieve carbon neutrality, following the plans of the Decarbonisation Strategy, in 2022, together with the leading international consulting company Ernst & Young, the Group implemented a project to quantify direct and indirect greenhouse gas emissions and the carbon footprint of products, taking into account national requirements and international standards, as well as specifics of the production of NAC Kazatomprom JSC. As part of the project, we developed a model to calculate greenhouse gas emissions for all Group’s subsidiaries and affiliates as well as a model of the carbon footprint of the Company's uranium and metallurgical products.

The Company assessed greenhouse gas emissions according to the following aspects:

To conduct the assessment, the Company analysed and grouped all subsidiaries and affiliates of according to their main activities in three business segments:

The structure of direct greenhouse gas emissions shows that more than half of the Company's direct GHG emissions come from the uranium mining and processing segment, followed by the ancillary activities. The nuclear fuel cycle and metallurgy segment has the smallest share of direct emissions.

The project found that the largest contribution to the carbon footprint of KAP comes from indirect energy emissions associated with the consumption of electricity, heat, hot water and steam supplied from outside. To reduce indirect energy emissions, the Company identified targets for increasing the volume of renewable energy consumption and also planned the implementation of energy efficiency projects. To achieve full carbon neutrality and compensate for irreducible GHG emissions, the Decarbonisation Strategy of NAC Kazatomprom JSC involves the implementation of GHG absorption and offsetting projects.

Structure of direct GHG emissions in 2019–2021, %

Carbon footprint assessment

To assess the carbon footprint, the Company analysed its production cycle within the chains for the production of target products: uranium, tantalumniobium, and beryllium; as well as chains for the production of raw materials used in the production of target products: gas and fluorine. Based on the results of a quantitative assessment of the carbon footprint of products manufactured by the Company, we determined the volumes of GHG emissions during production by types of products (functional units) and commercial products. The production of uranium oxide concentrate makes the most significant contribution to the volume of GHG emissions.

824,000
tonnes of СО2
is Kazatomprom's total carbon footprint from the production of uranium oxide concentrate.

To reduce the carbon footprint, we developed a number of measures including optimisation solutions and measures to improve energy efficiency. Among them are production optimisation, the overhaul of production equipment, purchase and expansion of renewable energy capacities as well as measures to absorb СО2.

The total amount of investments that the Company plans to channel to reduce GHG emissions and carbon footprint makes up USD 129/227 million for a realistic and optimistic scenario, respectively.

Greenhouse gas emissions

The Company regularly monitors greenhouse gas emissions by quantifying direct and indirect emissions in accordance with international standards and guidelines and generally accepted guidelines such as the GHG protocol and ISO 14064.

The Group carries out consolidation of greenhouse gases on a 100% basis regardless of the Company's equity participation in joint ventures.

GRI 305-1, SASB EM-MM-110a.1.

Direct greenhouse gas emissions, 2020-2022 (Scope 1), ‘000 tonnes of CO2-eq.

Indicator 2020 2021 2022
Direct greenhouse gas emissions 92.59 106.91 97.26

The Company has no emissions from the combustion or decomposition of biomass.

GRI 305-2

Indirect GHG emissions, 2020–2022 (Scope 2), tonnes of CO2-eq59

Activity Electricity consumption-related Thermal energy consumptionrelated Total emissions
2020 2021 2022 2020 2021 2022 2020 2021 2022
Uranium mining and processing 532,920 554,960 546,694 546 518 1,095 533,466 555,477 548,152
Nuclear fuel cycle and metallurgy 135,196 130,871 42,965 96,378 103,927 203,468 231,574 234,798 246,434
Ancillary activities 52,929 50,902 46,348 1,915 1,376 2,810 54,844 52,279 49,448
Total 721,045 736,733 636,007 98,838 105,821 207,373 819,883 842,554 844,034

Annual greenhouse gas emissions at each subsidiary and affiliate do not exceed the threshold of 20,000 tonnes of CO2 equivalent as adopted at the national level for reporting emissions and participating in the Kazakhstan Emissions Trading System.

In the reporting period, Kazatomprom held several campaigns to help reduce the Company's contribution to climate change. In particular, we continued planting trees on the territory of the fields and in the adjacent settlements. We also¬ held a Car-Free Day when stakeholders ditched private cars for a day and used public transport, reducing greenhouse gas emissions from fuel combustion.

Kazatomprom employees took part in the Earth Hour campaign, within which it was supposed to disconnect all devices from electricity for an hour not only to save electricity and reduce greenhouse gas emissions associated with its consumption but also to draw public attention to the climate change issues.

GRI 305-3

Other indirect greenhouse gas emissions (Scope 3), tonnes of CO2-eq.

Indicator 2022
Emissions from goods and materials 580,399
Emissions from transportation 161,723
Total 742,122

Earlier, until 2021, the Company did not calculate greenhouse gases for Scopes 2 and 3, as the applicable Kazakhstan Law provides only for calculations for Scope 1 based on assessments of independent and licensed companies. In this regard, the Company did not recalculate greenhouse gas emissions.

Energy efficiency and energy saving

GRI 3-3, GRI 302-4

Kazatomprom lays emphasis to reducing its ecological footprint and minimising its impact on the environment. To this end, the Company implements programmes to reduce and optimise energy use. All subsidiaries and affiliates of the Group have an energy management system that manages energy efficiency issues and complies with the requirements of ISO 50001:18001.

The Company is also in a phased transition to an energy management system that complies with ISO 50001:2019, which helps on an ongoing basis reduce energy consumption, minimise emissions of harmful substances into the atmosphere as well as receive financial benefits.

Kazatomprom improves energy efficiency and reduces the energy intensity of production by introducing energyefficient equipment, rational using natural resources and modernising production processes. In the field of energy consumption and energy efficiency improvement, the Company's management established a KPI that does not allow exceeding the annual planned specific electricity consumption rates for uranium production.

An energy audit is conducted at the Group's enterprises once every five years to assess the possibility and potential for energy saving. Its results are used by all enterprises of Kazatomprom when developing an Action Plan for energy saving and energy efficiency improvement. The plan is formed annually as part of the Implementation Plan of the Kazatomprom Development Strategy for 2022-2031.

In 2022, the Company implemented a range of measures to improve energy efficiency. The actual economic effect was KZT 1,142 million, or up by 7% of the target. Our energy saving and energy efficiency measures helped save 223 GJ in 2022.

GRI 302-1, 302-4, SASB EM-MM-130a.1.

Energy consumption, ‘000 GJ60

Indicator 2020 2021 2022
Thermal energy 887 950 868
Heat from renewables 11 7 4
Electricity 2,849 3,069 3,043
Electricity from renewables 14 12 14
Total energy consumption 3,762 4,038 3,929

Sokol-M(O)-5 Water Desalination Plant launched at UMP JSC reduced thermal energy consumption in steam in 2022 as compared to 2021. This allowed obtaining distilled water without using thermal energy in steam for further use in the technological process. Consumption of fuel and energy resources for production, extraction and processing of raw materials reached 5,411,000 GJ.

Earlier, the Company produced distilled water from saturated steam by cooling tubular heat exchangers (distillers) with recycled water.

Use of primary energy sources, ‘000 GJ

Source type 2020 2021 2022
Coal 17.9 17.6 12.7
Natural gas 0.0 2.5 7.7
Fuel (gasoline, fuel oil, diesel) 1,318 1,431 1,461
Energy intensity
GRI 2-4, GRI 302-3

In 2022, the consumption of fuel and energy resources (FER) at the Group's enterprises decreased by 1% compared to 2021 thanks to ongoing efforts to reduce the FER consumption. In 2022, the specific energy intensity was 254 GJ/t and includes energy consumption from all fuel and energy resources.

Energy intensity61

Indicator 2020 2021 2022
Consumption of fuel and energy resources for production, extraction and processing of raw materials, ‘000 GJ 5,073 5,470 5,411
Production, extraction and processing of raw materials, tonnes 19,587 21,834 21,279
Specific energy intensity, ‘000 GJ/t 0.259 0.251 0.254
Alternative energy

Kazatomprom aims to improve the efficiency of its energy supply by moving from energy production with a high carbon footprint to more sustainable and environmentally friendly methods. To achieve this goal, the Group's enterprises actively use alternative energy sources. This approach helps save fuel and energy resources and reduce greenhouse gas emissions:

Electricity generation by PV stations, MWh

Indicator 2020 2021 2022
Generated energy 3.52 3.34 3.01

Effect from the use of alternative energy sources in 2022, ‘000 KZT

Indicator 2020 2021 2022
PV stations 97,761 90,950 133,523
Solar collectors 32,030 29,902 46,520

The Company is constantly looking for new ways to use alternative energy sources at its enterprises. In 2022, we developed design documentation and received a positive opinion from a non-departmental expert review for the installation of four solar collector systems at Karatau LLP. The Company will use these systems to provide hot water to a hotel, household facilities, a hostel, and a sports complex. We plan to complete the installation of the systems and put the facility into operation in Q1 2023.

Recycling

The economic effect of the implementation of the recycling project reached KZT 6.307 billion in 2022.

Plans for 2023 and a medium term

In 2023, we plan actions to reduce the carbon footprint of products in line with the developed Decarbonisation and Carbon Neutrality of NAC Kazatomprom JSC until 2060.

To achieve this goal, we will focus our efforts on the development of renewable energy sources and the reduction of greenhouse gas emissions across Kazatomprom. To this end, work will continue on energy saving and energy efficiency of our operations. Focus areas include:

DEPOSIT LIFECYCLE MANAGEMENT
KAP 1

The Group operates 26 deposits (sites). The deposit is developed by the ISL method in succession by dividing it into technological blocks. It takes an average of three to four years to develop one technological block at the deposit.

Uranium mining by the ISL method involves a set of operations:

Advantages of natural uranium mining by the ISL method compared to conventional uranium mining:

Uranium mining by the ISR method in Kazakhstan

Kazatomprom's key environmental objectives have always been the preservation of the natural environment in the areas where its subsidiaries and affiliates operate. We invest consistently significant resources into environmental initiatives. In particular, the Company's subsidiaries and affiliates spent more than KZT 1 billion on environmental measures, and the enterprises paid KZT 210 million in environmental taxes in 2022.

The Company's subsidiaries and affiliates have robust environmental and radiation safety monitoring systems in place at their uranium mines and production sites, striving to provide reliable information on our environmental impact and possible changes in adverse or hazardous conditions.

Considering current challenges and trends, the Company is implementing significant projects such as low-carbon development (decarbonisation), sustainable development (environmental responsibility, energy and resource efficiency, climate risks, etc.), water resource management and transition to the best available technologies (BAT), which ultimately seek to preserve and restore the natural environment, prevent environmental pollution and damage, minimise the negative human impact on the environment in the regions of presence.

In addition to mandatory industrial environmental control at production facilities, since 2019 the Company has been carrying out comprehensive environmental and social studies of the impact of production facilities on the environment and the health of the population living near uranium deposits.

These studies inform the assessment of biodiversity at and around mine sites. We have engaged experts, biologists, botanists, zoologists, ichthyologists, ornithologists, and others, to identify the species in fauna and flora and develop measures for the biodiversity conservation in the areas of operations.

Kazatomprom regularly reaches out to residents in communities near uranium mines to explain operations of uranium mining companies. This helps build stakeholder trust.

Manas Iskakov
Managing Director for HSE

Taking Care of our Planet

Our approach

Environmental protection is an integral part of Kazatomprom's activities and its approach to sustainable development management. We recognise our responsibility for the impact on the environment, health, safety, and life quality of people. By implementing targeted production plans, we not only provide people with clean energy but also strive to preserve the planet for future generations. The Company takes all necessary measures to ensure environmental safety, preserve the natural environment in areas of production activities, and rational use of natural resources, setting the task to achieve zero impact on the environment.

As part of the global Agenda 2030, the Group has identified Goals 3, 7, 8, 9, 12, and 13 of the UN Sustainable Development Goals in the field of environmental protection as one of the top priorities along with ensuring radiation and nuclear safety.

The main principles and approaches of the Group to environmental protection management are set out in the Policy of NAC Kazatomprom JSC in the field of health and safety, environmental protection, and radiation and nuclear safety.

The Company's Production Safety (HSE) Committee operates under the Board of Directors. The Corporate HSE Department of the parent company provides overall guidance on environmental protection activities, analyses the effectiveness of this work, and prepares reports for the Company's management. The Group formed the units at the level of subsidiaries and affiliates to ensure the implementation of environmental protection policy, compliance with all law requirements in the field of environmental protection and internal corporate procedures.

GRI 2-23

We apply the precautionary principle, especially in the areas of health, safety and environmental impact. The implementation of this principle is carried out in the process of risk management within the framework of the Group's integrated HSE management system.

The Company’s environmental management system in place is in compliance with regulatory and legal documents in the area of environmental protection and coordinates efforts in HSE with the activities of the Group in ensuring industrial, nuclear and radiation safety as well as with other related areas.

By introducing new technologies and best global practices in the extraction of natural uranium, Kazatomprom improves processes related to environmental protection and the rational use of natural resources. We mine natural uranium using the most environmentally friendly method of extracting the element from the earth's crust, the in-situ recovery (ISR), which minimises risks to human health and ensures self-restoration of underground water after the completion of mining. This method is also characterised by the absence of large-scale radioactive contamination of territories.

KAZATOMPROM: 25 YEARS OF RESPECT FOR NATURE

On 8 June 2022, Kazatomprom held an online event on the RHYTHM platform as part of World Environment Day, Kazatomprom: 25 years of Respect for Nature! The Company presented its environmental protection and ecology projects, as well as the decarbonisation efforts implemented by the Group. All subsidiaries and affiliates of the Group carried out environmental campaigns. To improve the culture of environmental safety, we organised educational projects in schools in the format of open lessons on ecology. In particular, Semizbay-U LLP implemented an Environmental Safety training project in the regional specialised boarding school for gifted children No. 4 Bolashak in Stepnogorsk.

The Group works extensively to minimise the environmental footprint by taking comprehensive measures and implementing environmental initiatives to boost ecological safety and ensure the sustainable development of its enterprises.

Implementation of the ESAP Roadmap

In 2022, within the framework of the implementation of the ESAP Roadmap:

Monitoring and control

SASB EM-MM-160a.1.

The Group seeks to minimise the negative impact of production on the environment and local communities, which is the primary objective of environmental monitoring and control. In accordance with the environmental laws of the Republic of Kazakhstan, the Group’s subsidiaries and affiliates carried out industrial environmental control (IEC) on a quarterly basis in the reporting period, engaging accredited contracting organisations (laboratories).

In 2022, to implement the new norms of the Environmental Code of the Republic of Kazakhstan62 and to establish uniform requirements for the IEC procedure at the enterprises of underground well leaching, the Company updated its corporate standard ST NAC 5.3.3-2022 Occupational Safety Standards System. Environmental Protection. Typical Programme of Production Environmental Control of Underground Leaching63. Based on the changes, the subsidiaries and affiliates were tasked with identifying categories of objects having a negative impact.

Kazatomprom implemented tasks aimed at improving environmental impact monitoring and forecasting, enhanced environmental expertise, completed research on the environmental and social impacts of underground leaching mine production facilities on the environment and local communities, and conducted a comprehensive technological audit of UMP JSC.

As required by the environmental laws of the Republic of Kazakhstan, an Environmental Impact Assessment (EIA) and public hearings are to be held prior to the commencement of any planned activity. At the hearings, representatives of enterprises, acting as customers, present their projects and explain to stakeholders the environmental and social aspects of the planned project. Results of EIA are fully disclosed for review and comments to all stakeholders, and any resident of an area where the Company operates can share their opinion on the issues of interest, including the impact of the planned activity on the environment and health of the local population.

All projects for the construction and reconstruction of production facilities implemented in the Company's subsidiaries and affiliates have passed public hearings and the EIA stage and received a positive state environmental expert opinion.

Certification

The environmental and energy management system implemented at all Group’s production facilities complies with ISO 14001 and ISO 50001 standards.

In 2022, as part of the commitment to improve approaches to managing occupational safety issues, Kazatomprom successfully passed the second supervisory audit and confirmed its certificate from the TÜV International Certification. The independent audit certified that, when organising export deliveries of natural uranium compounds, the Company's integrated management system complies with the requirements of international standards ISO 14001:2015 and ISO 45001:2018 Health and Occupational Safety Management System.

Environmental protection training

To obtain the necessary competencies and knowledge in studying and applying the Good International Industry Practice (GIIP) and ensuring the effectiveness of environmental management, the Company organises regular training sessions for the heads of subsidiaries and affiliates and specialists responsible for subsoil protection, environmental and social issues. In accordance with the Action Plan of the ESAP Roadmap within the reporting period, Kazakhstan Nuclear University jointly with the IVT LLP branch held training seminars in the area of environmental safety and emergency response:

Last year, 191 trainees from 19 subsidiaries and affiliates and the headquarters took part in the training.

As part of the decarbonisation project, we held in Astana a two-day seminar to discuss quantitative assessment of the carbon footprint of products (CFP) and the subsequent development of a Carbon Neutrality Programme (CNP) as part of the implementation of the low-carbon development (decarbonisation) of the Company. We laid emphasis on the disclosure of methods and approaches to calculating indicators of greenhouse gas emissions "Scope 1, 2, 3". The seminar was organised by the parent company in cooperation with Ernst and Young for employees of subsidiaries and affiliates.

The Company held 22 training seminars/ webinars that brought together 811 trainees from the headquarters, subsidiaries, and affiliates of Kazatomprom over the entire period of implementation of the ESAP Plan.

Investment in environmental protection

In 2022, Kazatomprom’s total cost of environmental protection measures amounted to KZT 1,074.8 million. In 2022, the Company paid KZT 210.0 million in emission taxes.

Investment in environmental measures, 2022, KZT million

Improvement of technological processes, including reduction of fugitive emissions into the environment 292.4
Improving the efficiency of existing dust and gas collection and water treatment plants 47.4
Carrying out R&D activities in the area of environmental protection 406.6

In the reporting period, a state environmental protection agency recorded violations of environmental legislation resulting in fines of KZT 21.3 million. Along with this, UMP JSC in the IV quarter paid a fine of KZT 1.84 million for providing false information about the type of activity of the Karadzhal mine. This resulted in incorrectly determining the category of the object (category II), which constituted a violation of paragraph 3 of Article 418 of the Environmental Code of the Republic of Kazakhstan. However, it should be noted that this violation is not environmental pollution. In addition, JV Inkai LLP paid a fine of KZT 1.63 billion in 2022.

Administrative fines imposed on Kazatomprom by the authorised state body related to violations of environmental standards and requirements, namely, soil pollution due to the spillage of technological solutions and the excess of pollutants in wastewater (LLP Baiken-U, LLP Semizbay-U, Kyzylkum LLP, RU-6 LLP, JV Inkai LLP, JV Katko LLP, ORTALYK LLP, and SKZ-U LLP). However, the Company did not exceed the established total limits allowed by government agencies for waste generation, emissions, and discharges. For all violations, we identified and eliminated the root causes, and took measures to prevent similar situations in the future.

Environmental assessment of suppliers

The Company requires that its suppliers of goods, works and services, as well as contractors, comply with the corporate standard The System of HSE Standards. These requirements are mandatory for contractors and are also advisory in nature for contractors.

Emissions

GRI 3-3

The specifics of the Group's production activities result in emissions into the atmosphere, due to which minimisation of pollutant emissions is an important aspect of Kazatomprom's environmental activities. We seek to reduce the negative impact by introducing technological improvements in our own production facilities. At the same time, the Company sells its products to 8 countries that use nuclear energy. By doing this, the Company contributes to law carbon industry development in these countries and helps reduce emissions.

The Group implements a number of measures aimed at reducing air emissions and monitoring the air quality:

The annual electricity output generated by the Group's solar photovoltaic plants is 3.01 MWh. The generated electricity is used for own needs, allowing annual savings of KZT 133 million. Excess electricity is supplied to local power grids for use by households and businesses in the regions where the Group operates.

Water resources

GRI 3-3

Water is an essential component of the technological process both at the main production facilities of Kazatomprom and in the operation of osmosis units (demineralised water is a raw material for generating electricity supplied to the external network for the needs of local communities). Besides, in some regions of operation, the Company provides water supply to the local population and industry.

We support the UN Agenda for Sustainable Development 2030, including SDG 6, Ensure the availability and sustainable management of water and sanitation for all, and also operate in accordance with the Water Code of the Republic Kazakhstan (Article 66) and water resources protection permit documents.

The Company divides the water supply of enterprises into industrial, technical, and potable.

The Company's water intake does not have a significant impact on water sources. The Group does not withdraw water from sources that are recognised as vulnerable, protected by the state and of particular value to local communities or biodiversity.

In an effort to reduce water consumption, we are making maximum efforts to reduce water abstraction and increase recycling. We also regularly monitor and assess the risks of water supply in all regions of our presence.

Water consumption and water withdrawal

GRI 303-1, SASB EM-MM-140a.1.

The Company carries out water intake, including for drinking water supply, in accordance with the requirements and norms of technological regulations for the production sewage water. The withdrawal does not have a significant impact on water sources. Enterprises providing water supply (centralised and non-centralised) keep monitoring water withdrawal, and conduct regular monitoring of the state of water withdrawal facilities, internal water supply systems, and water metering units. The Water Code of the Republic of Kazakhstan, technical regulations, and rules for the selection, installation and operation of water meters in water supply and sanitation systems establish the requirements for water meters.

Groundwater is taken from the water withdrawal sites against a permit for special use of water issued by the Basin Inspectorates for Regulation of the Use and Protection of Water Resources under the Committee for Water Resources of the Ministry of Ecology, Geology and Natural Resources of the Republic of Kazakhstan.

In 2022, total water withdrawn dropped by 9% year on year, from 10,120,700 m³ to 9,188,900 m³.

Total water withdrawal, '000 m³

GRI 303-3, SASB EM-MM-140a.1
Source 2022
Surface water 6.5
Fresh water -
Other water 6.5
Ground water 8,573.5
Fresh water 3,455
Other water 5,118.5
Municipal and other water supply systems 608,9
Fresh water 608.9
Other water -
Total 9,188.9

Groundwater accounts for 93% of the total amount of water withdrawn. 0.07% of water is withdrawn from surface sources. Water withdrawal from municipal and other water supply systems in the reporting period dropped by 62%, from 1,582,900 m3 to 608,900 m3 due to the sale of a stake in JSC Caustic and its exclusion from the coverage perimeter.

GRI 303-5

Total water consumption reached 5,773,300 m³.

Total wastewater discharges

The Group's entities produce industrial, storm and domestic wastewater as a result of water use. After treatment through storm sewer outlet, water is discharged to surface water bodies from storm waste water from the territory of the industrial site and normatively clean water (not used in the technological process). Mine wastewater is discharged into a storage pond. The national laws prohibit the discharge of untreated wastewater into the terrain and water bodies. Since 2017, the General Requirements for Environmental Safety in Kazatomprom's Subsidiaries and Affiliates standard has been in force at Kazatomprom.

GRI 303-2, SASB EM-MM-140a.2

All discharges are treated and meet regulatory requirements of the quality of discharged water according to the Methodology for Emission Rates. Monitoring of the condition of water bodies, including the determination of the chemical composition of surface, underground and waste water, is carried out regularly by the Company's industrial and sanitary laboratories. The monitoring programme includes studies of wastewater quality at all industrial sites that are connected to centralised sewerage.

In 2022, subsidiaries and affiliates of the Group did not exceed the limits of contaminants in discharges as set for water bodies with fisheries.
GRI 303-4

Total wastewater discharge, ’000 m3 64

Indicator 2020 2021 2022
Total wastewater discharge 5,239.4 4,823.0 3,415.6

Uranium mining based on the ISR method poses a risk of groundwater contamination. To ensure the safety of the population and minimise the environmental risk at all Kazatomprom mines in accordance with sanitary standards, the deposits are surrounded by a sanitary protection zone with a radius of 500 m from ore deposits. Moreover, the Group’s enterprises constantly monitor the state of groundwater as part of the production environmental control in accordance with the established legal requirements and the requirements of the corporate standard “Methodological Guidelines for the Monitoring of the Impact on Ground and Underground Water in ISR Mining of Uranium”.

Waste management

GRI 3-3, 306-1, 306-2, SASB EM-MM-150a.10

Kazatomprom’s production operations generate industrial and municipal waste. Safe waste management, recycling and disposal is one of Kazatomprom's priorities. If it is impossible to process waste, we ensure detoxication and environmentally safe disposal of waste or transfer waste to specialised organisations.

Key waste generated by the Company:

When handling waste, the Group is guided by the national legislation, which obliges the enterprises to ensure separate collection of all generated waste, depending on their type and composition, for subsequent disposal, processing and disposal. Subsidiaries and affiliates have temporary sites equipped for containers and metal containers in place. They are marked with clearly visible identification marks indicating the type of waste, as well as the degree of hazard. The Company carries out mandatory control over the prevention of waste generation, and also performs a number of activities in accordance with approved waste management programmes and plans.

Waste reduction efforts:

To manage waste, we also work with organisations specialising in waste collection, recovery or disposal operations. In particular, Kazatomprom makes contracts for the following services:

We have developed passports with basic information for hazardous waste, indicating description, hazardous properties, composition, toxicity and precautions for waste handling. Hazardous waste is transported in line with the applicable laws only by licensed organisations. In 2022, the Company did not transport hazardous waste across borders.

GRI 306-3, SASB EM-MM-150a.4.

In 2022, the total accumulated waste was 604,627 tonnes, down by 41% compared to 2021. Such a significant reduction is due to a decrease in stripping operations at the Karadzhal mine of Ulba Metallurgical Plant due to the stoppage of fluorite ore mining.

Solid low radioactive waste management

In their operations, uranium mining enterprises generate solid low-level radioactive waste (SLRW is the least hazardous solid radioactive waste in terms of radiation level). The Group's mining enterprises dispose of solid radioactive waste in specially designated areas for disposal.

Contribution of various types of SLRW to total radioactive waste (RW) at the Group’s uranium mining entities, 2022, %

SLRW types Contribution to total RW
Sand and sludge from the sand trap, contaminated soil 78.8
Ion-exchange resin 0.3
Metal waste 3.4
Overalls, PPE, rags, filters 1.6
Plastic waste (types, etc.) 1.0
Other radioactive waste 14.8

Biodiversity

GRI 3-3

Despite that Kazatomprom’s operations do not have a direct material impact on biodiversity, we understand and accept the importance of preserving biological diversity in the region of our presence, making every effort to study the state of flora and fauna in the territory of uranium deposits.

We are always open to dialogue and cooperation on biodiversity conservation and protection. For example, Kazatomprom's subsidiary, IVT LLP, has a consortium agreement with the Institute of Zoology to conduct comprehensive research on the protection of birds from the dangers of power lines as part of Kazatomprom's programme.

We work to prevent threats to biodiversity by investing significant resources in risk analysis at all stages of our operations. Environmental risks arising from our operations primarily relate to the disturbance of soil and vegetation and the displacement of animals outside their usual habitat. Striving to reduce environmental risks, the Company approved a standard for assessing and monitoring biodiversity during the industrial mining of uranium deposits and during the postreclamation period.

GRI 304-1, SASB EM-MM-160a.3.

The total area of land owned, leased and managed by the Group is 94,974.4 hectares. There are no nature reserves or other specially protected natural sites on the territory of the Group’s uranium deposits or near their borders.

GRI 304-2

Kazatomprom operates on industrial land and in settlements in line with the applicable laws.

All subsidiaries and affiliates within the scope of the project for the implementation of the ESAP Plan were covered by biodiversity assessment studies carried out in the territories adjacent to the production sites.

As part of the implementation of the ESAP Roadmap, Kazatomprom continued the implementation of the Programme of Bird Protection from the impact of power lines in the reporting period. We also carried out comprehensive environmental studies, including biodiversity assessments in the territories adjacent to 16 uranium mines in Southern Kazakhstan: Zarechnoye, Kulandy, Karatau, Northern and Southern Karamurun, Khorasan-1, Khorasan-2, South Inkai, Akdala, Western Mynkuduk, Central Mynkuduk, Zhalpak, Eastern Mynkuduk, Uvanas, Kanzhugan, South Moinkum, and Central Moinkum. Studies were carried out on the territory of mine land allotments and within 10 km to identify possible man-made and cumulative impacts on environmental objects and the local population.

The biodiversity assessment took place in accordance with ST NAC 17.6-2022. "Methodological Guidelines for Biodiversity Assessment at Uranium Fields, Production Facilities and Adjacent Territories" at South Inkai, East Mynkuduk, Uvanas, Kanzhugan, South Moinkum, and Central Moinkum mines.

In the studies, we analysed the production operations from the environmental perspective, the available background data on the condition of air, surface and groundwater. We also studied soil types, the structure of underground aquifers, and the species composition of flora and fauna. We collected new data on the ecological state of the soil cover, surface and underground waters, and atmospheric precipitation. For the first time, we carried out studies of microbiocenosis and phytotoxicity of soils at the GTP. We identified potential channels of impact on environmental objects and compiled a primary list of environmental risks.

The results of the study concluded that there were no impacts of the production activities of enterprises on the indicators of the state of the environment beyond the sanitary protection zone.

In 2023, the Company will continue the environmental condition assessment and biodiversity assessment of Kazatomprom's uranium deposits.

In 2022, we developed and cascaded down to the subsidiaries and affiliates the Methodological Guidelines for Biodiversity Assessment at Uranium Deposits, Production Facilities, and Adjacent Territories. As part of the implementation of the standard, the subsidiaries and affiliates conducted training on Biodiversity Assessment at Uranium Deposits. We identified control points and background sites for the assessment of biodiversity and other environmental studies in areas adjacent to production sites. We created maps indicating habitats affected by mining activities. To determine the habitats more accurately and identify sensitive ecosystems, the Company conducted biodiversity studies with account of the seasonal migration of birds and mammals.

GRI 304-3

Kazatomprom works on an ongoing basis to restore lands disturbed by mining operations. While developing the deposits, the Company carries out reclamation works to restore the landscape and vegetation and return the land into economic use.

There are no protected or restored habitats within the above 16 mines of Kazatomprom. The Company has approved a roadmap for the liquidation of the Uvanas deposit. Implementation of this project is scheduled for the end of April 2023. Until then, enabling works are underway.

International standards, methodological guidelines and relevant qualifiers, as well as the Environmental Code of Kazakhstan and ST 17.6-2022 standard "Methodological Guidelines for Biodiversity Assessment at Uranium Deposits, Production Facilities and Adjacent Territories" guide the biodiversity assessment.

GRI 304-4

Our operations do not pose a threat to animals and plants listed in the Red List of the International Union for Conservation of Nature and Natural Resources (IUCN) and the Red List of the Republic of Kazakhstan and threatened with extinction.

The in-situ recovery does not change the landscape, which contributes to the conservation of endemic flora and fauna. The death of animals and desertification of territories are excluded. Once uranium mining is completed and the consequences of subsoil use are eliminated, the animals return to their previous habitat.

At present, the conservation status of animal and plant species included in the Red List is: 0 endangered, 3 extinct, 12 vulnerable (close to vulnerable), 1 nearthreatened, and 11 least concern species.

Plans for 2023 and a medium term

In 2023, Kazatomprom plans to implement a number of HSE measures:

Focus on the well-being of our employees and the communities where we operate is among our priorities.We implement a set of measures as part of our corporate welfare programme to ensure social stability and create a favourable psychological climate in the work settings, improve social and working conditions and increase safety.

In 2022, we significantly improved monitoring of the working environment, which lies at the heart of the Occupational Relations concept aimed at improving social and working conditions. We provide the safest possible working conditions and comply with Kazakhstan's laws and internal regulations on occupational, radiation and nuclear safety, H&S, and environmental protection.

Kazatomprom has developed standards for meals, accommodation, and special clothing, and has unified the VHI package, giving all employees of its subsidiaries and affiliates equal opportunities regardless of their position.

To promote the healthy lifestyle of staff in the rotation camps, we have created all the conditions for sports activities, tournaments, annual athletic contests, and marathons. To support employees' mental health, the Company has a corporate psychologist, and organises training sessions, group and individual consultations for employees of the parent company, subsidiaries, and affiliates.

The Company offers equal career opportunities, development and training programmes, and has the programmes in place to recognise the Best in Profession, the Best Employee of the Year, and Honoured Employee of the Nuclear Industry.

The average monthly salary of our employees in 2022 was KZT 510,154, up by 37% year on year. This has become possible through an increase in base salaries, Phase 2 of a pay streamlining project, and a new type of payment, indexed income.

In 2022, Kazatomprom initiated a number of socially significant projects, including the construction of children's playgrounds and sports grounds, the purchase of educational equipment, landscaping and amenities, financial assistance to vulnerable social groups (food packages, school supplies, and New Year gifts), and completed the construction of an ambulance station in Turkestan.

Working towards improving all aspects of employee welfare is always in our limelight. Kazatomprom will continue these efforts.

Alibek Aldongarov
Chief HR and Digitalisation Officer

Creating an Attractive Working Environment

Management approach

GRI 3-3

Kazatomprom employs more than 20,000 people. It is one of the largest and most socially responsible employers in the country. The achievement of production results as well as the Company's further growth depend on each employee's performance. We strive to provide our employees with equal and fair working conditions, broad opportunities for professional and personal growth, and social well-being.

NAC Kazatomprom JSC is responsible for ensuring decent working conditions by offering competitive salaries, fostering talent development and guaranteeing labour rights.

Our values rest on mutual trust, respect, openness and integrity, as well as continuous professional development. Our operations require a wide range of skills and qualifications. We provide training and professional development opportunities for all categories of personnel. We create individual development programs for our key employees that include regular professional skills and competencies appraisal.

Inclusion, equal rights and non-discrimination form an essential part of our corporate culture. The Company attracts and develops the most talented people regardless of gender, ethnicity, age, religion, social status, physical and mental ability, work experience or education. This approach is in line with the UN SDGs 3, 4, 8, 9, 10, and 11 aimed to improve the quality of life and welfare of people of all ages, to provide inclusive and equal quality education and lifelong learning opportunities, and to achieve gender equality and decent working conditions for everyone without exception.

The Company's HR management activities are regulated by Kazatomprom HR Policy 2018-2028. This document is one of the most important tools for achieving the strategic goals of the Company. It is designed to motivate employees, achieve high labour efficiency with due regard to their interests and capabilities, and stimulate the active engagement of personnel in the Company’s life. In 2022, the Company's Board of Directors approved an updated HR Policy 2023-2028. The document provides for the introduction of inclusion practices and diversity of special human needs and individual capabilities as well as the creation of a psychologically safe environment and sense of belonging for all employees.

We are also governed by the Labour Laws of Kazakhstan, international standards and a set of internal documents:

GRI 2-13

The Board of Directors approves and monitors the achievement of strategic HR goals. The Company's HR Department and other structural divisions in charge are responsible for the effectiveness of the HR policy, as well as for direct interaction with personnel. HR services at the enterprise level ensure direct on-site coordination and operational management.

Key objectives in HR management at Kazatomprom:

Personnel structure

At the end of 2022, the total headcount of Kazatomprom personnel (including joint ventures and associates) amounted to 20,813 people. The total headcount of the Group's personnel increased by 0.8% year on year.

GRI 401-1, 2-7, SASB EM-MM-000.B

Kazatomprom’s total headcount, 2020-2022, employees

Indicator 2020 2021 2022
Average staff number at the end of the reporting period 21,019 20,643 20,813
Total headcount (staff members, independent contractor agreements, outstaffing contracts) 21,788 21,031 21,682

We value long-term relationships with our employees. The majority are employed under long-term contracts (>91%), with around 9% of employees employed under fixed-term contracts.

GRI 2-7, 2-8, SASB EM-MM-000.B

Kazatomprom’s average headcount by form of employment, 2020-2022, persons

Indicator 2020 2021 2022
Long-term contract 19,821 19,122 18,350
males 16,227 15,696 15,183
females 3,594 3,426 3,167
Fixed-term contract 1,198 1,521 2,463
males 1,001 1,246 2,011
females 197 275 452
Full-time employment 21,011 20,627 20,799
males 17,222 16,931 17,186
females 3,789 3,696 3,613
Part-time employment 8 16 14
males 6 11 8
females 2 5 6
Under independent contractor agreements 769 388 744
males 518 263 449
females 251 125 295
Outstaffing contract 0 0 125

Kazatomprom follows the nondiscrimination principle. The Company employs people of different age groups, including people over 50 years old. In 2022, this age group accounted for 27.7%. The average age of employees was 40 years.

GRI 405-1

Kazatomprom’s average headcount by age, 2020-2022

Indicator 2020 2021 2022
Under 30 3,201 2,799 2,830
From 30 to 50 12,260 12,034 12,219
Over 50 5,558 5,810 5,764
Average workforce age, years 41 40 40
Diversity and inclusion
GRI 405-2

Kazatomprom recognises and values the diversity of employees' views and cultural values. The Company does not tolerate any form of discrimination, including discrimination based on race, gender, religion, disability, or political beliefs. When making job announcements and selecting candidates, experience and qualification requirements are clearly defined to avoid any bias in the recruitment process. The remuneration depends only on the candidate's skills and qualifications.

GRI 405-1

Kazatomprom provides jobs for people with disabilities. In 2022, the Group employed 183 persons with disabilities, an increase of 30 persons compared to 2021. The share of employees with disabilities in 2022 was 0.8% of the average number of employees.

Average number of employees with disabilities, 2020-2022

2020 2021 2022
151 153 183
Gender breakdown

Due to the nature of the Company's production operations, the share of males in the total headcount is larger.

Kazatomprom follows the principle of gender equality and engages women in administrative and service positions. In 2022, the share of females was 17.4%.

Kazatomprom’s average headcount by gender, 2020-2022

Indicator 2020 2021 2022
Males 17,228 16,942 17,194
Females 3,791 3,701 3,619

As part of promoting gender equality, developing leadership potential among females and training future female leaders, the Company plans to gradually increase the share of females in the management bodies of the Company and its affiliates and subsidiaries (boards of directors, supervisory boards and executive bodies) to at least 30% by 2030. It was 19% in late 2022.

Talent retention

Recruitment and staff turnover

GRI 401-1

In 2022, the Group employed 3,652 people, of which 73.9% work in South Kazakhstan (including Shymkent). Kazatomprom has no policy of preferential hiring of local employees. The candidates are selected on their merits: education, qualifications, and professional qualities of the applicants.

In 2022, the Group's staff turnover was 14.88%. Compared to 2021, this indicator slightly grew by 1.88%. In 2022, staff turnover was 9%, of which 13% for administrative staff (13% for managers), and 8% for production staff (7% for managers).

Motivation and remuneration

Kazatomprom seeks to ensure decent and timely pay for its employees and applies transparent approaches to material remuneration, striving to maintain wages at a high competitive level in the labour market and in the industry.

The Company has a remuneration system that complies with national legislation and defines minimum wages, working hours and overtime pay.

STREAMLINING STAFF REMUNERATION IN KAZATOMPROM COMPANIES

Effective 1 January 2022, Kazatomprom implemented a project to streamline staff remuneration in Kazatomprom’s companies that was first launched in 2019. The project had two stages rolled out in 14 Company's subsidiaries and affiliates with about 6,000 employees. Starting from 1 January 2022, it was also implemented at seven production and auxiliary subsidiaries with about 12,000 employees. The project made the methodology of the reward system transparent, streamlined and understandable for every employee of NAC Kazatomprom JSC.

The systemisation of reward implies:

  • taking a unified approach to the list and amount of payments and to the procedure for their calculation at enterprises, regardless of the nationality of the shareholders, working conditions, and the production technologies and capacities used
  • grading 100% of positions in subsidiaries and affiliates
  • keeping or increasing salaries and/or tariff rates
  • comparing annual income of employees at Company's subsidiaries and affiliates with the average income of employees at the same level (grade) in Kazakhstan
  • paying performance bonuses for individual and team performance
  • taking a unified approach to payment for harmful/hazardous and extremely hazardous/significantly hazardous working conditions and to determining the duration of additional leave
  • taking a unified approach to the amount and procedure for payment of leave bonuses by the employer
  • reviewing and eliminating additional payments (personal allowances, workmanship, foreman's allowance, nontransparent bonuses) so that the annual payroll of each employee remains unchanged.

In accordance with the HR Management Corporate Standard of Samruk-Kazyna JSC, the reference wage market for employees of the Company's subsidiaries and affiliates is the general industrial market of the Republic of Kazakhstan, and the level of wages tends to its median.

Kazatomprom pays particular attention to analysing the remuneration ratio for females and males. Due to industry specifics requiring physical labour, most employees are male. Nevertheless, we do not tolerate any form of discrimination with regard to recruitment, remuneration, performance appraisal and career development for females.

The average monthly salary of Kazatomprom's production personnel rose by 44% to KZT 454,648.

Kazatomprom’s payroll fund, KZT

Indicator 2020 2021 2022
Average monthly wage of production personnel 279,202 314,653 454,648
Payroll fund, KZT million 65,707 71,484 99,395

We have analysed among the Group's personnel. The analysis showed that in 2022, the average income of female production personnel was 12% lower than that of males, while the pay gap for administrative and management personnel was 26% in favour of males.

Long-term and short-term staff motivation

The rewards paid to employees for meeting planned targets, and strategic and operational goals of the Group’s companies, as well as for generating innovative ideas, high professionalism, and a responsible attitude to work are the key components of the financial remuneration system, which fuels the long-term motivation of personnel.

Additional incentives include:

Young professionals

In 2022, within the framework of replicating the Zhas Orken programme, the Company successfully continued to implement the local Izbasar programme aimed at developing young specialists. The purpose of the programme is to nurture talented leaders with the prospect of gradual career development at Kazatomprom enterprises.

The Izbasar programme provides a unique experience of internships and special training at several Company's enterprises. In 2022, the programme also included a 15-month paid internship at the Company and its enterprises to select young professionals. Thus, in 2022, eight young specialists were selected on a competitive basis from among the production staff and four external candidates.

Feedback

GRI 2-26

The Company has an effective system of internal communications, which ensures several feedback channels.

The main channel of communication is the Company's Internet resource, kazatomprom.kz. The website provides external stakeholders with the opportunity to leave a written inquiry or complaint and, if necessary, to contact the hotline by phone.

The Company supports the development of a feedback culture by:

The Group’s enterprises monitor and analyse inquiries, providing quarterly reports to Kazatomprom's headquarters. Based on the analysis results for each inquiry, we follow up on the elimination of violations and make appropriate recommendations.

Staff development and training

GRI 3-3

Staff training and development is one of the Company's priorities under the Corporate Culture Transformation and Development Programme. Kazatomprom implements the best and most effective educational practices in the areas of operational efficiency, occupational safety, human rights, labour protection and career guidance. The Company implements programmes to develop leadership competencies and trains mentors and internal coaches. Annually, employees of the Company's enterprises undergo compulsory and professional training.

57,044
man-hours
In 2022, the total annual number of training hours reached

Education level of Kazatomprom’s staff, 2020-2022, %

Indicator 2020 2021 2022
Higher 42.93 43.81 44.69
Secondary vocational 32.66 33.49 34.32
Basic vocational 3.19 3.26 3.33
Secondary 21.17 19.42 17.67
Basic 0.06 0.02 0.02

The Company has a Comprehensive Training Programme 2019-2023, which is aimed at systematising the processes of training, retraining and advanced training of employees and includes such elements as:

The training is conducted on the site of Kazakhstan Nuclear University with the involvement of internal experts and external providers.

Kazatomprom invests a significant number of resources in the training and development of its employees. In 2022, Kazatomprom invested KZT 2 million in employee training and development.

Training is based on the principle of selflearning, according to which 70% of training takes place at work, 20% of skills are acquired by employees through mentoring and coaching programmes, and 10% through training courses and other training programmes.

The HR Department is responsible for supporting managers in training employees, organizing the training process and choosing educational programmes, as well as educational service providers.

TALIMGER PROJECT: SEARCHING AND SELECTING MENTORS FOR EMPLOYEES

In 2022, the Company launched the Talimger Project, which aims to develop a mentoring culture. The idea of the Talimger Project is to search and select mentors for employees wishing to implement a project, reach a goal or acquire a new skill. The aim of the Project is to promote new ideas put forward by employees of the Company and its subsidiaries and affiliates. It operates across all Kazatomprom production areas with the support of mentors. The Company selected three employees. They selected three mentors from the general pool. The interaction between employees and mentors has identified goals and sub-projects for joint activities to achieve the set objectives and common results.

Kazatomprom also develops mentoring through various programmes and areas. The Izbasar programme has a standing group of engaged mentors. As part of a subsequent rotation, new mentors are also welcome. The Company and its subsidiaries and affiliates have an established system of assigning mentors to young professionals/ trainees/interns.

Training effectiveness evaluation

Kazatomprom has introduced a procedure for evaluating the professional, personal, and business as well as managerial qualities by analysing the common and individual performance of each employee. The evaluation and analysis procedure determines the training needs of employees and their future career opportunities. Based on the analysis, we draw up a development plan or corrective plan for the employee, change the remuneration, and promote/ demote the employee.

Upon completion of training, an assessment of the completed training is carried out by filling out questionnaires by the trainees, and then after 3 months, the assessment of the completed training by the head of the trained employee.

Training programmes

GRI 404-2

Company pays close attention to improving the practical skills and abilities of employees due to the constantly tightening requirements for their qualifications. Kazatomprom develops and implements advanced training programmes in professional areas, including mandatory training in accordance with the legislation of the Republic of Kazakhstan.

All training programmes of the Company are aimed at improving managerial and personal and business competencies of managers, talents (successors), forming effective management teams, unlocking internal potential, improving cross-functional interaction, as well as applying the acquired skills in the working environment and achieving better results.

In 2022, the Company continued its Leadership Development Programme.

Kazakh and international service providers with experience in leadership development, management competencies, coaching tools, and team management were engaged.

In 2022, the Company held about 15 workshops, training and strategy sessions, covering 100% of managers at CEO-1 and CEO-2 levels. 251 man-hours of training were conducted. The total number of academic hours was 200 hours.

The training programmes were aimed at improving the managerial and personal and business competencies of managers, and successors, forming effective management teams, unlocking internal potential, improving crossfunctional interaction, as well as applying the acquired skills in the working environment and achieving better results.

In 2022, managers at all levels attended a number of training events based on their development areas. Each training sought to develop Kazatomprom's corporate competencies and values.

KAZATOMPROM’S SCHOOL OF INTERNAL TRAINERS

In 2022, as part of professional training, in-house trainers conducted 13 workshops. The topics were: Microsoft Excel. Advanced. Working with data in Power BI; Personal Finance Management; Requirements of Kazatomprom's Comprehensive Environmental and Social Impact Assessment Programme on the Environment and Local Communities; Kazatomprom's Zero Waste corporate programme.

Kazatomprom experts, including industry veterans in specific areas, are involved in professional training. They demonstrate their efficiency by sharing unique knowledge accumulated over years of experience and practice in the nuclear industry. The dedicated programme is developed by in-house trainers.

In 2022, Company's employees traditionally held 22 master classes. This training programme was recorded, posted on the Group’s corporate portal, and is currently available to all employees. Such a format provides for the use of videos as additional training materials featuring unique knowledge and best practices.

Talent pool

In 2012, the Company introduced a management succession programme for Kazatomprom, aimed at identifying candidates from among the Group's employees with high potential and a desire to improve their professional qualities and career growth to organize succession in the talent pool, as well as continuity in the Company's management system.

During the programme, a mentor is assigned to every successor, who is responsible for employee development, progress monitoring and support in the course of the implementation of their ideas. The pool of successors is defined based on the results of employee performance appraisal. Pool owners – the Chairman of the Management Board and functional area managers – are the main contributors to the development of the succession programme.

In 2022, as part of the programme, the Company:

Under the mentoring programme, 9 mentors were trained in effective interaction with successors and learnt feedback skills. Over the entire period of the mentoring programme, 67 mentoring sessions were held with the participation of successors from the headquarters, subsidiaries and affiliates as well as CEO-1 level mentors. Several mentoring sessions were held with the Chairman of the Board of Directors.

On an annual basis, the headquarters review the number of appointments to positions from the successor pool.

Cooperation with educational institutions

Kazatomprom cooperates with Kazakh universities and colleges, as well as foreign educational institutions. The Group's employees are trained at the expense of the Company. Individuals who are not employed with Kazatomprom and its subsidiaries and affiliates are trained at the expense of subsoil users.

As of the end of 2022, 269 people were trained in industry-specific specialties, of which 112 were employees of Kazatomprom, its subsidiaries and affiliates and 157 individuals were not employed by Kazatomprom.

In 2022, three successors were appointed from the pool, representing 33% of all appointments to key positions.

Kazatomprom continues cooperation with Satbayev University, which hosted the country's first and only International Scientific and Educational Center of the Nuclear Industry (IS&ECNI), where employees of the Company, its subsidiaries and affiliates, as well as individuals, are trained at the expense of subsoil users in priority specialities for the nuclear industry.

In 2022, 15 persons got their master's degrees in Chemical Technology of Inorganic Substances and Materials. During the programme implementation, extensive training was organised. It involved not only the faculty from Satbayev University but also from the Institute of Metallurgy and Enrichment, Institute of Nuclear Physics, Institute of High Technologies, National Research Nuclear University MEPhI, MIREA - Russian Technological University and the "Aksakaldar kanesi" Honorary Professors Association of Kazatomprom. In 2022, a number of students got their bachelor's degrees in subject-oriented programme "Geotechnology of Uranium Fields Development" at IS&ECNI. In 2019, as 1st-year students, some students were selected by Kazatomprom as part of the targeted training of highly qualified geologists. Out of 50 applicants, 6 students passed the selection round. All six graduates were employed by JSC Volkovgeologia after graduation.

In 2022, the Company spent KZT 271 million on training specialists in universities and colleges.

Staff welfare

GRI 401-2

Kazatomprom fosters social support measures aimed at continuously improving working conditions and the quality of life for its personnel regardless of the form of employment. Social policy is one of the key pillars of Kazatomprom’s stable operation and sustainable development. The Company ensures a comfortable working environment and provides additional guarantees and benefits that provide high social protection for employees. These initiatives are aimed at improving the quality of life of employees. The Company implements a set of measures as part of its corporate well-being programme, aimed at ensuring social stability, creating a favourable moral and psychological environment within teams, improving social and labour conditions, and enhancing safety.

The core principles of the Company's social policy comprise:

The country’s leading industrial company continuously improves its approaches to social security and HR management policies.

Kazatomprom's social support costs by area, 2022, KZT bn

Area Level of investment
Health care 1.44
Food 3.7

In 2022, the Company organised a number of events aimed at self-fulfilment in social functions and supporting the social welfare of employees: Kazatomprom Marathon, Spartakiada, In the Rhythm of a Healthy Heart, Donor Day, eco projects, social volunteering projects, and corporate events and contests.

Social programmes were launched aiming at ensuring financial welfare, particularly, improving employees' financial literacy and knowledge leading to smart financial decisions. The Company carries out a number of activities aimed at increasing employees' knowledge of personal finance management and financial instruments. One of the subsidiaries has introduced a concessional lending programme as part of a pilot project.

Employee support

Company’s current social policy focuses on support to certain categories of employees: single parents, families with many children, parents of children with disabilities, and non-working pensioners upon the termination of the employment contract. The Group companies have a unified approach to full-time and parttime employees.

As part of social security, single parents and mothers of three or more children under 12 are granted additional leave. Families with many children and families with disabled children under 18 receive financial assistance.

In 2022, maternity/paternity leave was granted to 380 employees, where 67 were men and 313 were women.

The Company provides medical care and additional financial assistance on special occasions and holidays for nonworking pensioners, upon termination of employment due to retirement or disability.

Health care and welfare of employees

GRI 403-6

One of the key Kazatomprom priorities is the health and welfare of its employees. The Company has elaborated and implemented various programmes aimed at supporting physical and mental health, as well as improving the financial, social, and professional welfare of the employees.

Kazatomprom strives to help each employee develop his or her own conscious attitude to the topic of welfare and the skills necessary to lead a healthy and happy life both at and out of work.

The Company worked consistently to improve physical welfare and form healthy habits to enhance the quality of life, improve health and increase productivity.

Effective programmes were rolled out in 2022:

Trade unions and human rights

Kazatomprom does not restrict the employees’ rights to establish or join public organisations that represent their interests. The Group’s staff can engage in any political, educational, charitable or social activity, as long as this engagement does not affect the performance of official duties and does not harm society.

Nuclear Industry Workers Trade Union ensures Kazatomprom's reliable partnership in complying with labour legislation and actively participates in protecting the interests of employees. As of the end of 2022, 13,500 employees of the Group's enterprises are members of the Trade Union, a 31% increase compared to 2021.

Collective bargaining agreements are concluded to regulate labour relations and create conditions for social protection of employees. As part of collective bargaining agreements and fulfilment of commitments, the Trade Union is allocated funds on an annual basis for events among the Company's employees, medical care, social assistance, cultural, sports and recreational activities and the purchase of vouchers for sanatoriums and children's camps.

Trade union support costs, KZT million

2020 2021 2022
575.5 684.9 843.8
The share of employees covered by the collective bargaining agreements is 99%.

Collective Bargaining Agreement

GRI 2-30, SASB EM-MM-310a.1.

The Collective Bargaining Agreement is key to protecting labour rights, economic, and social guarantees of employees, as well as regulating labour relations and effective dialogue between the Company and employees. The Collective Bargaining Agreement is developed for a three-year period and is subject to regular updates.

GRI 402-1

An integral condition of the Collective Bargaining Agreement of Kazatomprom is the obligation to notify employees in advance about significant changes in working conditions no later than one month prior to the proposed changes and in some cases fifteen calendar days.

The provisions of the Collective Bargaining Agreement also regulate recruitment, maintenance of corporate culture and relations with employees. In accordance with the Collective Bargaining Agreements, Kazatomprom provides social support for personnel aimed at continuous improvement of working conditions and the quality of life of employees.

Approach to human rights observance

GRI 2-23

Human rights protection, social partnership, mutual respect, mutual trust, and prevention of any discrimination are the main principles in relations between the Company and its employees.

Responsibility for managing issues relating to the Company's Human Rights Policy rests with Office of Ombudsman and Compliance Service.

Kazatomprom's corporate practices are based on recognised international human rights standards and initiatives:

To consolidate and enforce our commitment, Kazatomprom developed and approved the Human Rights Policy in 202265. The Policy applies to all divisions of the Company and is binding on all employees of the Company. Based on this Policy, the Company's subsidiaries, affiliates and jointly controlled entities are recommended to develop and approve a similar internal document in accordance with the established procedure. The document was developed based on international human rights standards (the Universal Declaration of Human Rights, the UN Global Compact Principles, etc.) and includes the most material human rights issues, as well as issues on diagnosing the moral and ethical environment in the team.

The Human Rights Policy is published on the corporate website and internal resources of the Company and is accessible to a wide range of stakeholders. In addition, employees of the Holding were introduced to the provisions of this document during sustainability development workshops.

GRI 408-1

Relying on the principles of respect for human rights, Kazatomprom engages those partners and counterparties that comply with the law and the Group's standards of corporate and business ethics. The Company maintains longterm partnerships only with suppliers who share and comply with the Group's ethical principles, who do not tolerate corruption, who respect human rights, and who care about occupational health and safety. Kazatomprom does not use child labour.

GRI 409-1, 411-1

Kazatomprom requires compliance with the law and its own corporate standards on occupational safety from suppliers and contractors operating at the Group's facilities. All agreements and contracts of NAC Kazatomprom JSC include provisions on the observance of human rights in accordance with the Code of Suppliers and Contractors of NAC Kazatomprom JSC.

Kazatomprom has an Ombudsman Service ensuring:

Compliance with human rights and international human rights standards is monitored by the Company's compliance officers and trade union organisation. In the event of a rights violation, employees may contact the Company through all its feedback channels.

In 2022, no cases of discrimination or other human rights violations were recorded in the Company. There are also no cases of forced or compulsory labour or violations of the rights of indigenous and minority peoples.

Corporate culture and internal communications

Production efficiency and achievement of the Company's strategic development goals are the Company's specific area of focus, which determines the formation of a strong corporate culture. Core values such as safety, responsibility, professionalism, development and teamwork are actively promoted within the team.

All Company employees understand and share the corporate values, define themselves as part of the team and contribute personally to the common cause.

In 2022, through its Corporate Culture Diagnostic, the Company diagnosed its further development vector, and created a roadmap of corporate culture development for 2022 – 2025.

To increase employee engagement and attract the best candidates in the labour market, the Company is actively working to build its Employer Brand. The Company developed an EVP promotion communication strategy.

Another key element of the corporate culture, aimed at maintaining the Company's corporate values, is social volunteering, which brings employees together and promotes staff involvement in the formation of a positive internal atmosphere and the image of Kazatomprom as a socially responsible Company.

In 2022, employees of the Company and subsidiaries and affiliates continued implementing large-scale volunteering projects. They are aimed at support for vulnerable groups and veterans, education of high school students located in the regions where the Company operates, and environmental campaigns.

Internal communication plays an important role in the development of corporate culture, aimed at organising effective interaction between employees, resolving crises, and building employee commitment and high loyalty. Corporate internal portal and corporate media such as the daily digest, the company newsletter, and the QazAtomNews corporate magazine are used as information channels.

To develop effective communications, in 2022, the Company launched a Telegram channel with more than 4,000 subscribers from among the Company's employees. The Telegram channel serves as a first-hand information source for employees.

Events for employees

Kazatomprom is interested not only in the professional development of employees but also in the realisation of their personal potential. Corporate sports and cultural events help to increase the activity, motivation and involvement of employees in the Company's life.

In 2022, Kazatomprom celebrated its 25th anniversary. Under the aegis of 25 years of development and success, large-scale corporate events were held throughout the year to showcase the Company's achievements and strengthen corporate spirit:

"DO GOOD" ART FAIR CHARITY PROJECT

Goal: to draw the attention of employees to the importance of charity projects as a socially important activity that allows solving specific acute social problems and showing the best qualities of a person – willingness to help colleagues in need, support and development of the creative potential of nuclear company employees.

Coverage: 300 employees of the headquarters as well as subsidiaries and affiliates, more than 500 participants in the Art Fair.

Programme description: creative works of employees were presented at the art fair in the Kazatomprom's headquarters building. The money raised was to be used for helping colleagues in need of urgent hel

Results: as a result of the art fair, KZT 2,607,000 were transferred to the family of a Company's employee who had died the day before in an accident. He had been raising three children alone.

Art fair participant: "I decided to participate in the Art Fair because I wanted to contribute and help those in need", said Asel Abenova, an employee of Semizbay-U, who provided several artworks — from oil paintings to knitted handbags. "I have been painting since I was a child, and I love painting in oils. I started knitting professionally when I was on maternity leave because my son inspired me. It didn't take me long to create my works for the Art Fair."

Interaction with management

Kazatomprom's internal communications system is the main tool to ensure that employees are timely informed about current events in the Group and helps maintain a positive atmosphere in the team.

The Company uses an online and offline format to hold major organisational events for employees (meetings, management meetings with the team, and teambuilding events).

The Chairman of the Management Board held a live broadcast with hundreds of employees of the Company in honour of the Nuclear Industry Workers' Day. The topics included personnel development and remuneration, social issues, and the Company's achievements in 2022. Top managers of subsidiaries and affiliates hold annual meetings with their teams. Kazatomprom's top managers visited subsidiaries and affiliates.

There is a functioning Kazatomprom RHYTHM programme, which informs employees about the Company's projects.

Employee awareness of the current situation and important events for the industry is maintained via e-mail – regular newsletters and addresses on behalf of management, as well as the QazAtomNews corporate e-magazine.

Employee satisfaction and engagement

Kazatomprom's programmes and initiatives dedicated to corporate culture development, improvement of social and labour conditions, safety improvement, material remuneration, motivation and engagement of employees are implemented in accordance with the developed plans and supported by all employees of the Company.

According to survey results, the Group's social stability level was 76% (favourable level). Compared to the 2021 results, the level of social stability has improved by 3%. As part of this research, the engagement rate is also determined, which amounted to 79% (favourable level). Compared to 2021, this result remained at the same level.

The annual positive performance appraisals are confirmed by regular surveys on the level of social stability. In 2021, the Centre for Social Interaction and Communications (PE) conducted research to determine the level of social stability “Samruk Research Service” (SRS) at 19 enterprises of the Kazatomprom Group.

To take a systematic approach to development issues and improve the level of social stability, Kazatomprom implements a set of measures that contribute to improving the level of social stability, prevention of labour conflicts and protest sentiments. Based on the effectively implemented measures, confirmed by Samruk Research Service survey results, during 2023 the Company will continue to implement systematic measures to develop corporate culture, and improve social and labour conditions, safety, material remuneration, motivation and personnel engagement. Kazatomprom aims to ensure a favourable level of social stability and employee engagement, but not below 70%.

Plans for 2023 and a short term

In 2023, we will continue employee support programmes, maintain and develop HR potential and maintain the level of employee engagement, including through measures to develop the employer brand.

The Company plans to continue efforts to improve the efficiency of the remuneration and financial incentives system, automate HR management processes, implement management succession and leadership development programmes, streamline remuneration, and take measures seeking to improve working conditions.

In accordance with the Company's priorities, we are set to deepen cooperation with trade unions representing the social partnership, amend collective bargaining agreements, maintain social stability, develop a culture of negotiation, and improve internal communications.

To enhance employee satisfaction with working conditions, we are set to develop and introduce standards for living conditions for shift workers in 2023, in particular standards for catering, provision of protective clothing, and medical care.

Health and Safety

Approach to H&S management

Kazatomprom pays special attention to compliance with industrial safety standards and regulations, in particular occupational health and safety, industrial safety, nuclear and radiological safety, environmental protection, fire safety, civil protection, and emergency response. The Company is committed to ensuring the highest level of health, safety, and security for its employees. Kazatomprom is constantly improving its occupational health and safety management system in accordance with national and international standards and requirements.

GRI 3-3, GRI 403-1

The main regulatory documents that define the principles and rules of occupaional health and safety of the Company:

The Company's H&S principles and rules are binding on all employees and contractors of the Group.

HSE Management System

H&S is Kazatomprom's priority area. It is one of the focus areas for the Management Board. The Management Board Chairman conducts regular meetings of the CEOs and executives of subsidiaries and affiliates to discuss the health and safety culture in the Company.

GRI 3-3, 2-13

The Company's enterprises implement regular H&S measures. The Board of Directors and the Risk Management Committee of Kazatomprom Management Board regularly review the results of all H&S measures.

The H&S report is submitted to the Chairman and the Board of Directors for consideration based on data analysis.

The H&S function accountable to the Chairman of the Management Board coordinates efforts to improve the H&S system in the Company, its subsidiaries and affiliates. The H&S Department supervised by the HSE Managing Director is responsible for the prevention of violations of H&S standards and rules, prompt response to incidents, as well as the monitoring, analysis, and control of the H&S risks.

In accordance with Kazatomprom's policy, all occupational H&S departments at subsidiaries and affiliates are subordinate to their CEOs. In 2022, the Company continued approving and expanding the functions and powers of the structural units responsible for H&S.

Kazatomprom regularly analyses the structure of qualifications and competencies of the H&S units at the Group's subsidiaries and affiliates to improve the H&S efficiency and remain in line with the requirements of national laws and the best world’s practices.

Compliance of the management system with international standards

In 2022, TÜV International Certification re-audited the Company’s integrated H&S management system for compliance with ISO 45001 and ISO 14001. The audit results confirmed the Company's compliance with the requirements of international standards ISO 45001 and ISO 14001.

H&S Risk Assessment

GRI 403-2

Kazatomprom views risk management as an important principle and component of its corporate governance system, including H&S. The Company takes a holistic approach to preventing industrial injuries and occupational diseases, as well as to identifying, assessing, and minimising industrial risks.

All Kazatomprom's activities are conducted in accordance with the fundamental regulatory and legal H&S documents. The main ones are the Labour Code and the Law of the Republic of Kazakhstan On Civil Protection. The Company also complies with a few by-laws, in particular, the Rules for Ensuring H&S for Various Types of Activities – Mining and Processing of Uranium, Operation of Hazardous Equipment, e.g. Lifting Mechanisms and Pressure Vessels.

The above documents guide the procedures for investigating accidents and incidents at Kazatomprom's facilities. The Company timely provides information regarding each lost time accidents in the workplace to the authorised government agency. In the case of group accidents or accidents with a severe injury (fatality), the Company is obliged to conduct a special investigation with the involvement of a governmental H&S inspector as required by the laws of the Republic of Kazakhstan. The Company also conducts internal investigations of all accidents to reveal the root causes using the "Why Five" and "Why Tree" methods. The Chairman of the Board and executives quarterly review the results of internal investigations. Moreover, an information bulletin is issued and disseminated to all subsidiaries and affiliates specifying the circumstances and causes of all incidents, traffic accidents, and fires in newsletters, enabling workers to avoid such situations in the future.

Kazatomprom provides quarterly information reports on injuries to all subsidiaries and affiliates, including a detailed description of accidents, their causes and measures taken by the Company. In addition, the Company immediately prepares an information bulletin and promptly communicates it to all subsidiaries and affiliates when accidents, road traffic accidents, fires and ignitions or any other incidents occur. This information is communicated to employees via e-mail, unscheduled briefings and by posting information on information boards and in conspicuous places.

The Company also keeps a register of risks, with occupational injury risks included. To reduce occupational injuries, Kazatomprom develops and implements comprehensive measures to improve the level of H&S, prevent occupational injuries, and achieve the established safety standards.

These actions include:

Health and safety risks are identified at each production site. A register of these risks is communicated to employees in that area and is posted in conspicuous places. The registers are regularly reviewed and updated. Identified risks from all production areas are put into an overall register of occupational health and safety risks.

The Company has implemented a system to identify and record Hazardous Conditions (HC), Hazardous Activities (HA) and Near Miss (NM). All OA, ML and NM are registered in the eCAP information system accessible to all employees. The registration of OA, ML, and NM does not entail any negative consequences for the employee, on the contrary, it is taken into account in motivational incentives.

The Company also identifies and records hazards that have caused or may cause the risk of severe incidents. The Company identifies the risks of severe incidents resulting from accidents, tripping and falls, and chemical exposure as the most significant.

Since 2018, the Group has been conducting behavioural H&S audits for all its companies. The main goal is to analyse the behaviour of employees at work (when they are performing production tasks) and thus to prevent behaviour-related risks.

In 2022, the Company conducted 15,316 behavioural audits with the engagement of the Company’s managers and executives of subsidiaries and affiliates to minimise the risk of the human factor.

Constant analysis and monitoring of data show that safety violations, which are often linked to a human factor, is the most frequent source of risk at any Group company. In addition, Kazatomprom provides strict control over compliance of the working conditions at workplaces and production sites with H&S requirements, as well as controls the technical condition of equipment, and the availability of all necessary internal documents, including instructions, procedures and standards.

Kazatomprom applies a risk-based approach to improve the H&S system. As part of this initiative, the H&S Department has developed a register of functional risks, which includes the major occupational H&S hazards and risks associated with the Department's activities. The register of functional risks is reviewed and updated annually. The Company also applies a risk-based approach to planning and conducting inspections/ audits. This helps to identify the most dangerous production areas and focus on the major risks, improve quality, and reduce the waste of time resources.

In 2022, Kazatomprom adopted a standard defining the procedure for issuing and using work permits for hazardous operations, as well as a form of a Safe Work Analysis. The latter helps assess existing and potential risks and take measures to mitigate them before work commences.

HSE performance

The safety and well-being of employees are top priorities for Kazatomprom. The Company regularly implements comprehensive measures and the world’s best practices to prevent accidents and incidents. Kazatomprom conducts regular campaigns to raise the health and safety awareness of its personnel. All these actions are aimed at improving the safety culture throughout the Group and at preventing possible negative consequences.

GRI 403-8

In 2022, the H&S management system covered 100% of the Company’s employees, as well as subcontractors’ employees

KAZATOMPROM IS A MEMBER OF THE VISION ZERO INTERNATIONAL PROGRAMME

In 2018, Kazatomprom joined the Vision Zero international programme initiated by the International Social Security Association (ISSA) to improve the health and safety of its personnel. The Company decided to participate in the initiative to improve the culture of disease prevention and reduce accidents and occupational diseases among employees.

As part of the Vision Zero concept implementation, the Company adopted the Golden Rules to protect the health and safety of its employees. The Rules are binding on all employees and contractors of the Group.

8.08
KZT billion
In 2022, the Company invested KZT 8.08 billion in health and safety.
H&S GOLDEN RULES
  • Take leadership – demonstrate commitment
  • Identify hazards – control risks
  • Define targets – develop programmes
  • Keep improving the safe and healthy system – be extremely well-organised
  • Ensure safety and health at workplaces, in operation of machines and equipment and handling hazardous substances
  • Improve qualifications – develop competence
  • Invest in people – motivate by participation

In 2022, the Company cascaded Vision Zero's personal commitment to the executives of subsidiaries and affiliates. The Company established special safety information boards to explain personal responsibility and leadership to raise the H&S awareness of the Group's employees in the rotation camps of subsidiaries and affiliates.

The health and safety awareness activities require both a consistent approach and investment.

The Company takes a responsible approach to the health and safety matters, investing heavily in health and safety measures.

The Company has a system for the employee performance evaluation in place. The performance appraisal is based on a list of key performance indicators (KPIs). The health and safety of the Group's employees is one of the key performance indicators in this list. “Improving safety culture” indicator is one of the major H&S KPIs, which includes such mandatory elements as “Lost Time Injury Frequency Rate (LTIFR),” “Average radiation exposure dose for Group A employees,” “Number of safety behavioural H&S audits conducted,” and “Greenhouse gas emissions volume”. This high-level KPI is cascaded to performance indicators for management, employees of the Company and subsidiaries and affiliates. The KPI assessment system covers all employees of the Company from Kazatomprom Board Chairman to an ordinary employee.

To ensure the effective identification and implementation of measures aimed at improving the H&S management system in the Company, Kazatomprom holds an annual corporate meeting on the H&S performance and plans for the next year. The results of the meeting are documented in minutes along with specific instructions aimed at H&S improvement.

In line with the Unified Occupational Safety Management System, each subsidiary/affiliate has a production control system that helps prevent and eliminate deviations from projects, process regulations, standards, rules and instructions, established work procedures, as well as to prevent emergencies and injuries. The first level of control is the responsibility of the immediate supervisor of works (foreman, shift supervisor, mechanic, etc.) and should be carried out at least once per shift. The second level of production control is carried out by the head of the subdivision. The third level of in-process control is carried out by the Production Safety Department of the subsidiary/affiliate with the participation of the head of the structural subdivision and specialists in their respective areas. The fourth level of production control is carried out by a commission chaired by the CEO of the subsidiary/affiliate. The commission includes managers, line specialists and specialists from the occupational safety service/unit. The fifth level of industrial control is carried out by a commission of Kazatomprom’s parent company. The Commission is composed of the Company's top managers, specialists of the Company's areas of expertise and the head or specialists of the occupational safety service.

In 2022, subsidiaries and affiliates carried out scheduled and targeted inspections as part of production control for compliance with the internal H&S requirements. In addition, the Company has a practice of peer checks where the subsidiaries and affiliates inspect each other in accordance with an approved schedule of peer checks. This practice improves communication and allows experience sharing between subsidiaries and affiliates.

In addition, competent H&S authorities carry out inspections of the Company's subsidiaries and affiliates in line with the Labour Code and the Entrepreneurial Code of the Republic of Kazakhstan.

In 2022, all production sites and employees of the Company were covered by internal and external audits.

In addition, the H&S Management System Corporate Standard will be revisited at all mining subsidiaries and affiliates in 2023. H&S Management System Corporate Standard is designed to harmonise the H&S management processes. The H&S Management department continuously monitors the effectiveness of the implemented processes and takes adjustment and improvement measures.

The H&S Management System Corporate Standard is based on the laws of the Republic of Kazakhstan, the Reference Model for H&S Management of Samruk- Kazyna Portfolio Companies, as well as advanced international standards and practices. It allows systematising the applicable requirements for the H&S management system structure and content in the Company and its subsidiaries and affiliates.

Performance

Kazatomprom keeps a register of risks, with occupational injuries indicated as one of the major risks in the Company. The Group has developed and implemented a list of comprehensive measures to prevent the risk of occupational injury and minimise the consequences in case any risk materialises.

The analysis of the H&S situation shows that major causes of personal injuries at Kazatomprom’s subsidiaries and affiliates, as well as of their contractors, include traffic accidents, handling sulphuric acid, falling from height, and falling on slippery surfaces.

Occupational injuries and accidents

GRI 3-3, SASB EM-MM-320a.1

Despite a consistent decrease in the number of occupational accidents and one of the lowest LTIFR in the industry in 2022, Kazatomprom continues to make every effort to reduce the number of accidents to “zero” and ensure accidentfree production activities and safe working conditions for employees.

In 2022, three accidents happened at Group companies, resulting in two injuries, one of which was severe and one of which was non-serious. Unfortunately, the third accident was fatal, ending in the death of an employee. The fatality was a result of a traffic accident caused by violations by the deceased employee of traffic rules while performing a manoeuvre.

LTIFR made 0.11 in 2022.

Accidents in 2022

Description Number of accidents
Traffic accidents 1
Moving objects 1
Cuts 1
GRI 403-9

The Company investigated all accidents in accordance with the established procedures to determine their root causes and develop prevention measures. The investigation process suggested the assessment of all factors, from technical malfunctions of equipment to the fatigue and emotional state of employees.

We used the investigation findings to develop a set of measures that were communicated to all companies of the Group and implemented in a timely manner.

Preventing occupational injuries

GRI 403-9

The Group constantly implements measures aimed at preventing occupational injuries, preventing and minimising risks and hazards. These include:

In 2020, the Company introduced a stop card tool across all subsidiaries and affiliates to prevent employees from doing unsafe works. When introducing the stop card procedures, CEOs of the subsidiaries and affiliates addressed all employees to confirm that actions to stop unsafe work would not entail any negative consequences for employees, including no disciplinary sanctions. In 2022, employees registered 462 stop cards.

Video conference meetings are held monthly with the heads of H&S services of subsidiaries and affiliates to discuss H&S issues, including root causes of accidents and serious incidents. The Company develops the appropriate measures to prevent their recurrence, and, if necessary, updates risk registers. All recommendations and instructions for measures implementation are then recorded in protocols. Subsidiaries and affiliated companies provide information to the CC on the execution of protocols within the framework of approved reporting.

As required by the Labour Code of the Republic of Kazakhstan, the Company regularly conducts H&S briefings with employees, regardless of their education, work experience in this profession or position.

The H&S briefing is carried out by the H&S service or by the person authorised by order of the organization, according to the programme developed by the H&S service. The program was approved subject to the requirements of H&S norms, standards, rules and instructions, as well as the requirements for the safe conduct of production works. In addition, videos with H&S briefings are available to the Group's employees.

GRI 403-2

Measures taken by the Company's subsidiaries and affiliates to improve occupational H&S have prevented industrial accidents (uncontrolled explosions, release of hazardous substances or destruction of buildings).

Occupational disease prevention and health protection

In its operations, the Group follows the priority principle, which is to protect employee’s life and health. The Company’s employees have access to health improvement and spa treatment programmes. These benefits are included in the social benefits package. In addition, as part of a collective bargaining agreement between the Group and the trade union, the employees can enjoy additional programmes for health rehabilitation and treatment. In addition, Kazatomprom has a medical insurance system in place for its employees.

Employees of subsidiaries and affiliates are provided with three meals a day as established by the laws of the Republic of Kazakhstan.

965
KZT million
In 2022, the Company invested KZT 965 million in occupational medicine initiatives.
GRI 403-3

The H&S service covers and controls all the Group's production facilities and processes. All subsidiaries and affiliates have medical posts in place to administer urgent medical aid to employees. All Group's medical facilities are equipped with the necessary equipment, ambulances, and medical care supplies: defibrillators, ECG, oxygen cylinders, humidifiers (oxygen concentrator), pulse oximeters, etc.

Kazatomprom’s H&S system has proved to be effective for identifying and eliminating hazards, as well as for risk minimization control. In addition, the H&S service performs one more function, which is awareness-raising among personnel to explain the possibilities of a social package and available additional support.

The total number of medical staff at subsidiaries and affiliates is 160, including 27 doctors, 90 paramedics, and 43 nurses.

All subsidiaries and affiliates have insured their employees against work-related accidents. In addition, voluntary medical insurance contracts are concluded.

In accordance with the Labour Code of the Republic of Kazakhstan, all Group enterprises have mandatory pre- and post-shift health checks for all employees, as well as mandatory annual/regular medical examinations of all Company employees.

Employees of the Group's subsidiaries and affiliates are not allowed to work without passing a pre-shift medical check. The Company continues to introduce an electronic health monitoring system for employees. Some enterprises have introduced e-medical examination systems that include modules for automatic measurement of blood pressure and detection of alcohol or other drug intoxication, etc. In a short-term perspective, all subsidiaries and affiliates of the Group plan to install similar digital systems for pre-shift checks.

In addition, employees of the Group’s contractors who are engaged in hazardous work or who work with machines and mechanisms are also obliged to have pre-shift and post-shift medical check-ups as required by the laws of the Labour Code of the Republic of Kazakhstan.

Following the results of medical examinations, employees can go through an in-depth medical examination if necessary.

Promoting the H&S culture

GRI 403-1, 403-4

All staff of the Group’s enterprises are actively engaged in the H&S management, which allows the Company to achieve an important level of health and safety. To communicate effectively with employees on health and safety management, special operational safety boards have been established at the Group's operations, as required by the Labour Code of the Republic of Kazakhstan. The boards comprise representatives of the employer, employees, and technical inspectors. The boards ensure continuous monitoring of compliance with H&S regulations at workplaces, with control (inspections) is carried out by technical H&S inspectors. The findings of inspections and follow-up decisions made are binding on both the employer and employees of the Group's companies.

As part of the implementation of Kazatomprom’s Development Strategy 2018-2028, the Company conducted works aimed at improving the H&S system. In particular, the Company took the following actions in 2022:

All these measures in 2022 helped improve the health and safety culture of the Group's employees, and will help avoid incidents in the future.

To promote the safety culture and leadership among managers at all levels in the Company, Kazatomprom developed and implemented the Leadership in the H&S Culture e-course. As part of the H&S system improvement, the Company organises special training for managers and employees of subsidiaries and affiliates to help promote a positive health and safety culture, identify potentially dangerous situations (near-misses), unsafe acts and conditions, as well as conduct behavioural safety audits. Also, the Company organises special mandatory H&S courses.

11,876
employees
In 2022, 11,876 employees attended the safety culture training.
GRI 403-5 SASB EM-MM-320a.1.

Kazatomprom conducts HSE training sessions on a regular basis. The courses can be divided into mandatory and optional. Training courses on compliance with the requirements of the laws of the Republic of Kazakhstan regulating H&S, radiation, nuclear safety, etc. are mandatory, while training courses on safety culture, leadership, and responsibility in HSE matters are optional. These courses are based on a review of the Company's occupational safety performance and contribute to improving safety culture and introducing best global practices.

The Group engages experts and organisations for the training process. The experts hold all necessary licenses, attestations, certificates and other permits required by the Law of the Republic of Kazakhstan On Permits and Notifications.

Knowledge tests are used to control the effectiveness of the training.

The Company has the HSE Club as a forum to share information and knowledge and develop measures to improve the H&S management system at the group companies.

Managing the health and safety of contractors

GRI 403-7

Kazatomprom ensures compliance with industrial safety standards by monitoring its employees and contractors. Contractors' occupational safety activities are regulated by the Standard "Unified Occupational Safety Management System" in Section 10.3 "Contractor Management".

The Company's occupational safety management system covers 100% of Kazatomprom’s employees, as well as non-employees whose work and/or workplace is controlled by the Company.

In 2022, we revised the information coverage and methodology for the calculation of accident rates for employees who are not full-time employees but whose work and/or workplace is controlled by the Company, and started recording accidents among employees of the Company's contractors. Thus, in 2022, our contractors has two accidents, with 2 injured people suffering severe injuries. No fatal accidents were registered. We investigated all accidents, identified causes, and developed measures to prevent similar accidents.

All contractors and suppliers of goods and services have to comply with Kazatomprom's safety standards. The Company assesses contractors for their compliance with H&S requirements before signing contracts and considers incidents relating to the work of contractors in risk analysis and H&S training planning. The results are then to be approved by the H&S Department. The H&S Department and services conduct safety audits on a regular basis. The H&S services keep records and investigate all accidents that have occurred at contracting organizations. On a quarterly basis, the H&S services provide reports on contractors' activities to assess the current situation with occupational safety in contracting companies. Contractors that have long-term contracts have to register incidents and Near Misses. The Company organises H&S training courses for employees of contractors as well as invites authorised representatives of contractors to participate in the H&S meetings.

The Company's subsidiaries and affiliates carry out audits and inspections of their contractors to ensure compliance with the requirements of the Company's occupational H&S management system. The Company's contractor management system is also audited as part of a certification audit for compliance with the requirements of ISO 14001.

Nuclear safety

EM-MM-150a.10

To ensure nuclear safety, the Group's enterprises handling nuclear materials monitor compliance with the respective technical regulations, instructions, rules, and nuclear safety requirements for handling nuclear materials.

At present, the Group's enterprises that have nuclear units include Ulba Metallurgical Plant JSC and Ulba FA LLP.

Kazatomprom monitors the nuclear safety performance at nuclear-hazardous sites and conducts an inventory of nuclear materials in a timely manner to ensure the nuclear safety and security of the Group's companies.

In 2022, the Chief Physicist’s Services (CFS) of Ulba Metallurgical Plant JSC and Ulba FA LLP implemented the following actions:

The absence of accidents and incidents throughout the reporting year proves the effectiveness of these measures.

Radiation safety

KAP 3

In 2022, Kazatomprom provided regular monitoring of the radiation situation at workplaces, in premises, production sites, and the supervised areas. All radiation indicators are within standard limits and have not changed since 2021.

In 2021, the Company did not register any radiation accidents or incidents at its enterprises. The annual dose of ionising radiation exposure did not exceed the reference values.

The average radiation exposure for staff was 1.36 mSv/year in 2022, including natural radiation sources. The radiation from the natural background sources ranged from 0.20 to 1.19 mSv/year.

The maximum annual effective dose for personnel at the Group's enterprises was 5.2 mSv/year, which is 26% of the permitted dose limit, which is 20 mSv/year.

The average radiation exposure for staff of contracting organizations employed at the Group's enterprises and engaged in decontamination of overalls, cleaning of production facilities and preparation of shipping packaging kits with finished products was 0.61 mSv/year.

To improve radiation safety and protect personnel, Kazatomprom takes the following radiation safety improvement measures:

INTERACTION WITH THE IAEA

In September 2022, the H&S area staff participated in the IAEA international conference on Occupational Radiation Protection: Strengthening Radiation Protection of Workers – Twenty Years of Progress and the Way Forward. Kazatomprom presented its reports on Occupational Radiation Protection as Part of the Occupational Safety Management System and Radiation Monitoring System at In-Situ Recovery (ISR) Mining Facilities. The focus of the conference was to share the personnel radiation protection practices among the world's leading experts.

In 2022, the HSE Managing Director took part online in the IAEA's International Conference on Applications of Radiation Science and Technology (ICARST-2022). He presented research conducted by Kazatomprom on the implementation and development of an automated radiation-hazard monitoring system based on innovative dosimeters.

The Committee of Atomic and Anergy Supervision and Control of the Ministry of Energy of the Republic of Kazakhstan monitors the Company's compliance with its international non-proliferation obligations. No violations were detected in 2022.

Under the IAEA Safeguards Agreement between the Republic of Kazakhstan and the IAEA, additional IAEA accesses and inspections were carried out at the mines of two uranium production subsidiaries (Ulba Metallurgical Plant and Ulba FA LLP). The results revealed no undeclared activities and nuclear materials.

In November 2022, representatives of Nuclear Material Accounting and Control unit took part in the IAEA International Symposium on International Safeguards: Reflecting on the Past and Anticipating the Future at the headquarters of International Atomic Energy Agency (IAEA) in Vienna, Austria.

Emergency preparedness and response

КАP 2, SASB EM-MM-320a.1.
Measures for civil protection, emergencies and fire safety in 2022

The Company takes ongoing measures to maintain a high level of emergency preparedness. The Company checks its fire safety systems on a regular basis: firewater supply system (pumping operation, fire hose check), fire sprinkler system, fire alarm system, and primary fire extinguishing equipment.

Every year, fire-fighting training courses and drills take place as scheduled, with the safe evacuation of staff from the Company's buildings to the specially designated assembly points.

In November 2022, competent government authorities conducted planned inspections and evaluation of the individual fire risk of the Company's Head Office for compliance with the requirements of the Fire Safety Regulations of the Republic of Kazakhstan. The results of the inspections showed that the fire hazards did not threaten people's lives.

Based on the results of the international certification audit, the building of the Company was in compliance with ISO 14001:2015 and ISO 45001:2018 standards in the field of fire safety.

To promote health and safety, the Company developed and approved a Plan of Civil Protection and a Plan of Action for the Elimination of Facilitybased Emergencies in Kazatomprom’s office building.

According to the H1 2022 Plan for conducting civil protection training courses and drills in Nur-Sultan, training was held with the simulated evacuation of personnel from the building to assembly points.

Creating Shared Values

Management approach

GRI 3-3

As a big company, Kazatomprom has a significant impact on the environment and local communities. Kazatomprom's mining and production facilities operate in five regions of Kazakhstan: Turkestan, Kyzylorda, East Kazakhstan, Akmola, and Northern Kazakhstan regions. Kazatomprom recognises that the longterm success of its business depends on social and economic stability maintained in the regions of operations and in the country as a whole, on mutually beneficial relations with representatives of the central and local authorities, as well as on the quality of working and living conditions for its employees.

2.625
KZT billion
Kazatomprom transferred KZT 2.625 billion in 2022 as part of its commitments under subsoil use contracts for socio-economic and infrastructure development to the budgets of the regions where it operates.

Chief HR and Transformation Officer is responsible for the external social policy and interaction with local communities.

In 2022, the Company consistently implemented measures aimed at ensuring long-term productive relations with the regions where it operates and strengthening its image as a socially responsible business.

Kazatomprom makes a significant contribution to the well-being and socioeconomic development of the regions of operations by:

Key indicators of Kazatomprom's economic contribution to the development of regions of operations

Indicator 2020 2021 2022
Taxes and duties paid, KZT billion 116.5 153.0 221.4
Dividends paid, KZT billion 99.0 150.1 227.4
Average monthly salary of Kazatomprom employees, KZT/month 331,380 370,894 510,154
Ratio of average monthly salary of Kazatomprom employees to average salary in the Republic of Kazakhstan 1.6 1.5 1.5
Kazatomprom’s social expenses, KZT million 3,494 3,451 3,285
Share of social expenses in revenue, % 0.6 0.5 0.5

Sponsorship and philanthropy

GRI 413-1

To support local communities, subsidiaries and affiliates can implement philanthropic initiatives independently. Subsidiaries and affiliates participate in annual charity events and cultural activities in the regions where they operate. In particular, they help children from orphanages and large families and provide social support and sponsor communities, thus, helping improve local public services and public amenities. They also participate widely in environmental campaigns, clean-ups, public events, and festivities.

In addition, subsidiaries and affiliates implement community development programmes as part of the Company's philanthropic and sponsorship activities. These programmes are based on the requests of the local communities and vulnerable groups, through the engagement of the Akimats, the Council of Elders, if any, and volunteers. The Company operates a hotline that receives queries, including requests from external stakeholders.

Key achievements in 2022

The Company's enterprises annually implement socially significant projects aimed at the socio-economic and infrastructural development of the regions where the Company operates, including improving the quality of life of employees of the Company and its subsidiaries and affiliates, as well as their family members in the regions where they live.

928.8
KZT million
As of the end of 2022, we allocated KZT 928.8 million for the implementation of socially significant projects.
GRI 413-1, 203-1, SASB EM-MM-210b.1

Investment in external social programmes, 2022, KZT million

Area Investment
Regional social infrastructure development 242.3
Education support 28.8
Sports support 1.3
Culture support 11.3
Health care support 530.9
Philanthropy 114.2
Health care support

Projects in this area seek to support the development of healthcare institutions, as well as medical examinations of children suffering from nervous disorders.

530.9
KZT million
The Company invested KZT 530.9 million to finance health programmes in 2022.

JV Katko LLP signed a contract with the Turkestan Oblast Akimat to finance the construction of a 25-brigade regional ambulance station. In addition, it sponsored a project to renovate a rehabilitation centre for people with disabilities, veterans and pensioners in the Sozak District.

Education support

The main areas of science and education development included in Kazatomprom's social policy are comprehensive support and assistance to educational institutions in the regions where it operates.

Every year, Kazatomprom enterprises participate in the national Road to School campaign to help prepare children from disadvantaged families for school, providing backpacks and stationery.

JV KATKO continues its partnership with the National Geographic Qazaqstan magazine, providing subscriptions to the magazine for schools in Turkestan and the Sozak District. In the framework of cooperation, the editors of the magazine arrange online seminars in the Kazakh language for teachers and students on environmental awareness.

Kazatomprom channelled KZT 28.8 million in 2022 into the implementation of these projects.

SANA LEADERSHIP DEVELOPMENT INFORMATION CAMP FOR HIGH SCHOOL STUDENTS IN THE REGIONS OF KAZATOMPROM'S OPERATES

The camp seeks to develop personal competencies, leadership skills, and emotional intelligence through training and awareness-raising activities as part of the students' career guidance. It promotes technical professions in production areas and builds confidence in Kazatomprom's HR brand among local residents.

As part of corporate volunteering and career guidance, Kazatomprom employees from among young professionals conducted SANA camp activities twice in school No. 193 in Baikenze village and also in schools No. 56, No. 161, and No. 194 in Zhanakorgan village, Zhanakorgan District, Kyzylorda Region, Kenesbaev School and Sugir Aliuly School in Taukent village, Sozak District, Turkestan Region in May, October, and December 2022. The project covered more than 700 pupils.

Social infrastructure development

Identification of current problems in the areas of operation and assistance in their solution and the development of social infrastructure are also among the priorities of Kazatomprom's external social programmes.

Throughout 2022, JV Katco LLP, Baiken-U LLP, and Kazatomprom-SaUran LLP implemented projects to build children's playgrounds, and pedestrian paths, repair roads, rebuild an old museum building, street lighting and power supply with the purchase of transformers, landscaping, repair and fencing of alleys in the regions of operations. These projects were rolled out in Turkestan and Kyzylorda regions. A total of KZT 242.3 million was channelled into these projects.

Philanthropy and charity

As part of its social support, the Company provides targeted assistance to those in need, supports socially important initiatives and promotes the involvement of employees and active residents to solve social problems in the regions where it operates.

We rolled out a number of socially significant projects in 2022, including financial assistance to socially vulnerable groups: coal purchases, food aid, school supplies, New Year presents, as well as a number of other socially significant initiatives.

Kazatomprom also pays great attention to supporting war veterans and retired former employees. To mark Victory Day, our enterprises held events to honour veterans of the Great Patriotic War and home front workers: presenting gifts and providing necessary assistance.

We spent a total of KZT 126.8 million on this area.

Plans for 2023 and a short term

The following social projects are scheduled for 2023:

Building a Sustainable Procurement Chain

GRI 2-6

NAC Kazatomprom JSC is a national operator and a global leader of natural uranium mining industry. Given the scale of Kazatomprom's business and the vast geography of its operations, efficient, timely, and complete provision of the necessary resources, combined with the best procurement terms and conditions, is paramount to the success of the Company's business.

Responsible procurements contribute to the development of mutually beneficial partnerships, increase the efficiency of interaction with suppliers and contractors, as well as improve the efficiency, control and transparency of procurement activities within the supply chain.

The Group’s key procurement priorities in the reporting period:

The Procurement Department headed by the Managing Director for Legal Support and Risks is responsible for procurements. The department is taking efforts to maximise the business value ensuring quality, timeliness, safety, productivity, and risk mitigation in various forms. To this end, Kazatomprom keeps expanding the professional competencies of the Procurement Department employees and applying new technological solutions.

In procurements, Kazatomprom follows the Procedures for Procurement by Sovereign Wealth Fund Samruk-Kazyna JSC and legal entities where 50+ percent of voting shares (equity interests) are directly or indirectly owned by Samruk- Kazyna JSC (ownership or trust management66).

Procurement processes to meet the needs of the Company are built with suppliers within the framework of the established rules, which are strictly observed.

Procurement processes are automated in the zakup.sk.kz system. Competitive procurement is preferred, with strict compliance with the principles of publicity and transparency. In addition, with government support, we make preferences for domestic producers and work to support import substitution and the development of new production facilities.

Under the Procurement Procedure, longterm mutually beneficial cooperation has been established with the largest suppliers of strategically important goods for the Company, and all supply chains, logistics and storage systems have been streamlined to ensure continuous production. All requirements for responsible business conduct are reflected in the contracts and are met by both suppliers and the Company.

Summary of Kazatomprom’s procurements in 2022

The total procurements under the Procurement Plans for the Company’s Group reached KZT 227.2 billion.

The Company concluded contracts amounting to a total of KZT 257.6 billion. At the same time, the procurement targets were met 93%.

Single source procurements made KZT 97.7 billion or 38% of the total procurements.

Procurements under the Invitation to Tender / Request for Quotation (ITT / RFQ) arrangements made KZT 159.9 billion or 62% of the total procurements.

To increase the share of competitive purchases, the Company interacts with potential suppliers to clarify the terms and conditions of registration and submission of tender documents, and eliminates excessive requirements for suppliers and administrative costs that do not affect the production process.

Planned and actual benefits of category procurements (category procurement management)

In 2022, the Company implemented four procurement category strategies in accordance with the Procurement Plan 2022: one procurement category strategy of NAC Kazatomprom JSC and three procurement category strategies of the Fund.

In 2022, category procurement strategies reached KZT 1.6 billion across the Group.

By implementing the procurement category strategies, the Company and the Fund achieved actual benefits of KZT 126 million against the target of KZT 1.2 billion.

In 2022, the subsidiaries and affiliates of NAC Kazatomprom JSC had to make independent purchases for most of the Fund’s and the Company’s procurement category strategies due to the exclusion of part of the category procurement strategies from the Fund’s Category List (trucks and special equipment, Safety footwear, etc.), as well as updating on other procurement category strategies (hardware, software). The above factors had a significant impact on the results of procurement category strategies of NAC Kazatomprom JSC.

1.6
KZT billion
In 2022, category procurement strategies reached KZT 1.6 billion across the Group.

Category strategies of the Company in 2022

Group strategy Fund strategy
HDPE and PVC pipes Health insurance
Cars and buses
Fuel

Digitalisation of procurements

Kazatomprom made the procurement plans for 2022 in the SAP ERP system. This functionality enables quick consolidation of the planned procurements, taking into account the goods in transit and in stock.

During 2022, the Company extensively worked on the automated integration of SAP ERP system and e-procurement information system 2.0. This resulted in the implementation of a method for direct exchange of procurement planning data. Currently, the functionality for integrating contracts between SAP ERP system and e-procurement information system 2.0. is in test mode.

Support of local suppliers

GRI 204-1

To comply with the public policy, as well as to support local suppliers in the region, NAC Kazatomprom JSC assists in concluding contracts for the procurement of products, works, and services between its subsidiaries and affiliates and local suppliers.

In 2022, the Company continued controlling the procurements of goods produced by domestic producers in the light, furniture, food industries, as well as in the production of construction, engineering, chemical and pulp and paper products from manufacturers listed on the Samruk-Kazyna’s Register.

EST procurements accounted for 92% of the total procurements under the EST List in accordance with the established indicators in procurement (report as of 10 February 2023).

KZT 1.2 billion was the total amount of 44 off-take contracts concluded under the Programme for Facilitation of Creation of New Production in the reporting period.

The Central Project Office engaging the Company’s subsidiaries and affiliates continues its work at the platform of Samruk-Kazyna Contract LLP to support domestic producers. The platform is used to conclude off-take contracts with producers. In addition, works are underway to search for new domestic producers adapted to the needs of the industry.

The local content in goods, works and services reached 82%, against the target of 76%. In 2021, the final figure for the same period was 80%.

Percentage of local suppliers in procurements, %

Indicator 2020 2021 2022
Percentage67 78 80 82

Suppliers by region

Region Number of suppliers
Almaty 740
South Kazakhstan region 376
East Kazakhstan region 360
Astana 316
Kyzylorda region 206
Karaganda region 123
Non-residents 64
Other regions 641

Suppliers by scale

Suppliers by scale Share, % Procurement amount, KZT
Small (up to KZT 1 billion) 31% 80,213,770,467.98
Medium (up to KZT 5 billion) 23% 59,574,435,655.19
Large (over KZT 5 billion) 46% 120,202,136,968.44
Total 100% 259,990,343,091.61
Plans for 2023 and a short term:

Science, Innovation and Digital Transformation

Managing R&D and innovations

R&D and innovations play a significant role in the implementation of Kazatomprom's strategic priorities for maintaining output, increasing efficiency, and reducing a negative environmental footprint.

The following companies contribute the most in achieving the strategic objectives in the field of R&D and innovations management, which are an increase in added value and knowledge intensity of Kazakhstan uranium products:

The Department of Scientific and Technological Projects of NAC Kazatomprom JSC is responsible for the general coordination of R&D activities, as well as for the management and commercialisation of intellectual property.

In 2022, to further improve the R&D coordination and implement R&D results, two events were held at the Company's production facilities to learn about the R&D results (on the sites of ME ORTALYK LLP, Vostochny Mynkuduk mine, and Volkovgeologia JSC) delivered by Kazatomprom’s subsidiaries and affiliates.

264
employees
are engaged in research and development at JSC Volkovgeologia, Institute of High Technologies LLP, Ulba Metallurgical Plant JSC, including 4 doctors of science and 27 candidates of science.
Results in 2022
6.829
KZT billion (without VAT)
was the total amount of 65 R&D contracts concluded in 2022 by Kazatomprom and its subsidiaries and affiliates, of which 59 contracts were signed by subsidiaries and affiliates (KZT 6.458 billion) and 6 contracts by Kazatomprom (KZT 0.370 billion). The Company utilized KZT 2.206 billion in 2022, including KZT 0.149 billion under contracts of Kazatomprom and KZT 2.057 billion under contracts of subsidiaries and affiliates.

To commercialise the R&D results, Kazatomprom signed four contracts in 2022 to grant the right to use its inventions:

16
intellectual
The Company filed 16 intellectual property applications and received 22 titles of protection.

Negotiations are ongoing to sign license agreements between Kazatomprom and its subsidiaries and affiliates (JV Southern Mining and Chemical Company LLP, Karatau LLP, APPAK LLP and Baiken-U LLP) on granting the right to use the invention “Method for obtaining a chemical concentrate of natural uranium”.

Scientific developments

Almost all R&D projects of the Group seek to improve and upgrade production. Several major R&D projects were implemented in 2022:

Projects Description
Development of a software product for managing downhole pumping equipment

This innovation helps manage six submersible well pumps in a simultaneous individual manner was solved by developing software for controlling a multichannel control panel.

The developed multi-channel control panel was assembled and preliminary tests were carried out. After successful preliminary tests, including functional testing of the software, we started field tests at the Central Mynkuduk mine of ME ORTALYK LLP. Field tests confirmed the operability of the technical solution for managing six submersible well pumps in parallel and solving the following tasks:

  • Controlling each submersible well pump in a system of six pumping units in parallel through a single multi-channel pump control cabinet.
  • Setting technological parameters for all well pumps simultaneously.
  • Increasing the efficiency of the technological process control.

Tests of the multi-channel control cabinet are planned for 2023.

Introduction of equipment, software and technology for 4D monitoring of the uranium mining process by the method of radio wave geointroscopy of the inter-well space into the complex of geophysical studies at the mine of the Inkai deposit

The implementation of 4D monitoring technology for uranium development using radio wave geointroscopy of interwell space will allow for the assessment of the actual volume of the mineralised rock zone filled with ore and the predominant direction of its distribution.

The introduction of 4D technology for monitoring the uranium mining process by radio wave geointroscopy of the inter-well space will make it possible to estimate the actual volume of the gas distribution mechanism and the predominant direction of its propagation.

The equipment was manufactured and then installed on logging hoists. The specialists of JV Inkai LLP took training. The Company developed regulations for conducting fieldwork and regulations for data interpretation have been developed.

Metrological certification of measuring instruments, entry into the register of the State Measurement System of the Republic of Kazakhstan. Field tests were carried out, the device was introduced in the production conditions of JV Inkai LLP.

Development and manufacture of a complex downhole tool combined with an inclinometer and a cavity gauge

R&D is a new, unique, and highly promising area to optimise geophysical studies of wells in uranium deposits in Kazakhstan. Field tests of prototypes were carried out. Calibration and collection of statistical data were carried out on 10 technological wells. A constructive improvement of the elements of connecting two measuring units based on LLC NPP Ingeo has been made. The device has been implemented in the production conditions of JV Inkai LLP.

Study of environmental and social impacts of production facilities on environment and local population

The results obtained make it possible to assess the environment in the territories adjacent to the production facilities of the enterprise, update the production environmental control programmes taking into account the identified risks, and replenish the databases with new environmental data.

We provided recommendations on assessing the impact of production on the environment and the population and developed an Action Plan to implement the recommendations.

Conducting comprehensive environmental and social research for sustainable development (GRI standards)

The results obtained make it possible to make a transition to risk-oriented management in the areas of environmental and social sustainability of production activities, as well as, based on long-term observations and operational control, to dynamically assess the impact of production processes on the state of ecosystems.

The results of the project implementation in the medium and long term (up to 20 years) will allow minimising the costs of uranium mining enterprises to eliminate the consequences of production activities, reduce environmental costs in general by reducing emergency situations and environmental and social risks, increase the level of interaction and establish a constructive dialogue with state bodies in the field of environmental protection and local executive authorities and the population.

This work started in 2022 and will continue until 2024.

Conducting research to optimise the processes of handling production and consumption waste at the enterprise in accordance with the Environmental Code of the Republic of Kazakhstan and GRI Standards

The project will develop technologies for waste reuse and recycling, as well as improve waste management systems, which will reduce the level of waste generation by 15% and increase the level of waste reuse by 20% (within 5 years after the project implementation). The R&D implementation will become a tool to achieve carbon neutrality. The carbon footprint of waste management will be determined, recommendations will be developed to reduce greenhouse gas emissions by 10%.

This work started in 2022 and will continue until 2024.

Innovations

The Group encourages its employees to innovate, using mechanisms for submitting, processing, evaluating, and reviewing innovation proposals. An additional incentive for innovations is an annual contest of innovations held among subsidiaries and affiliates.

Results in 2022:
CONTEST OF INNOVATIONS

NAC Kazatomprom JSC holds an annual contest of innovations among subsidiaries and affiliates. The contest operator is the Department of Scientific and Technological Projects of NAC Kazatomprom JSC.

According to the results of the contest held in 2022, the project “Technology for opening an ore zone using three cone bits in combination with biopolymer drilling fluid systems to preserve the natural properties of rocks” of Volkovgeologia JSC was recognised as the best innovation proposal creating an economic effect for 2021.

The proposal "Control of rarefaction in the pipelines of dust and gas removal from kilns" of JV Southern Mining and Chemical Company LLP was recognised as the best innovation proposal creating a social or other effects.

The proposal “Method of increasing the volume of condensate, heating steam involved in the technological process of obtaining technical beryllium hydroxide” by Ulba Metallurgical Plant JSC was recognised as the best innovation proposal within the framework of the Green Mindset – Green Thinking initiative.

The “Software module “Lithology with jpeg” (digitisation of data on wells: lithology, sampling intervals, ore intervals, from scanned media (column, passport, tape)” of Volkovgeologia JSC was recognised as the best digital solution in production for 2020.

JV Inkai LLP was recognised as the most innovative enterprise based on the contest results.

All winners were awarded diplomas and certificates, and the best innovators were awarded badges of merit.

Plans for 2023 and a short term:

Pursuing a new approach to R&D management, the Group will take the following actions in 2023:

The Company will continue improving the competencies of subsidiaries and affiliates' employees involved in R&D. This will contribute to the improvement of the quality of R&D as part of the implementation of R&D licence terms and conditions.

Digitalisation and IT

In the context of implementation of the strategic task "Digitalisation and transformation" to achieve the strategic goal "Apply best practices in business activities" of the Development Strategy of NAC Kazatomprom JSC for 2018-2028, the Company continued standardisation and optimisation of business processes, including the creation of a single vertical integrated IT infrastructure.

IT infrastructure key results in 2022:
Key actions for 2023

Key IT and digitalisation projects

Project Purpose/Effect
Improving the efficiency of operations and decision-making
Unified Corporate Data Warehouse and Integration Bus
  • Implementation of tools for connecting data streams from various sources, their complex analysis, filtering, transformation and modelling to extract useful information for decision making.
  • The project is developing: a methodology and model for collecting and processing data, software for data visualisation and analytics (reference books and classifiers, reporting forms and dashboards, data marts for 4 production reports), tools for integrating data with accounting and corporate systems of the parent company, subsidiaries and affiliates (SAP, 1C, etc.).
Introduction of a unified corporate geoinformation service KAP-MAP
  • Centralised management of cartographic data and the introduction of unified approaches and the geographic information system (GIS) will improve the quality of data and the maturity of employees in terms of data management. This will increase the efficiency and quality of decisions made, speed up the preparation of cartographic data, unify the approach to managing cartographic data, and create a single centralised digital cartographic database.
Digitalisation of corporate services provided through infokiosks
  • Automation and simplification of processes and access of personnel to such services as: vacation application, vacation schedule and viewing the rest of vacation days, certificate of employment, paysheet, business trip application.
  • In 2022, the Company successfully piloted and put into operation the automated services in the subsidiary of Kazatomprom-Sauran LLP. Replication is planned for 2023 in other subsidiaries of NAC Kazatomprom JSC.
Inventory labeling
  • Tracking the transition/movement of used inventory items at all stages – from the production of equipment to movements in production during the production process.
  • In 2022, Kazatomprom-SaUran LLP implemented the project for labelling devices involved in the uranium mining technological processes. For testing, one of the key technological devices was selected - submersible pumping units and flow meters (for pumping out a productive uranium-containing solution and calculating its volume).
  • Based on the results of pilot tests, we determined labellings with the best reading performance for each type of equipment - special stickers DataMatrix codes.
  • In 2023, there will be made the decision on further replication and implementation of the system, as well as labelling processes in other mining companies of NAC Kazatomprom JSC.
Data management and business process optimisation
SAP MDG
  • Centralised storage and management of regulatory and reference information. SAP MDG on the S4/ HANA platform allows to significantly increase the speed of data processing and integrate with other information systems.
  • In 2022, SAP MDG of the parent company was integrated with non-SAP systems (1C) at 7 subsidiaries and affiliates.
SAP ERP
  • Centralised Enterprise Resource Planning (ERP) includes standard functionality with modules such as Virtual Warehouse (VW), Packing List (PL), and the Electronic Invoice System (EIS) of the State Revenue Committee of the Ministry of Finance of the Republic of Kazakhstan for processing packing lists.
  • In 2022, the Material Management (MM) integration with the EIS portal was completed based on the localisation of SAP AG developed for Kazakhstan. Direct integration of the SAP ERP system and EIS 2.0 was implemented. Host-to-host technology (the channel for interaction between the bank and the client's corporate accounting system) was introduced. Statistical and analytical reports were developed in SAP BW for Project and Portfolio Management (PPM). Integration of the Contract Management System (CMS) with SAP BW (data transfer from ERP) and SAP GRC AC (optimisation of SAP GRC AC risks and segregation of duties) was also completed. The decision was made to replicate the implementation in other subsidiaries and affiliates.
SAP HCM
  • Centralised personnel management system.
  • In 2022, we implemented processes related to rewards, competence-based performance assessment, and training program management. Implementation of the Electronic Signature Personnel Management (ESPM) system has begun for HR processes, including ESPM service packages for exit forms (orders, employment contracts, not exceeding 115 forms), ESPM automation for applications and consents (not exceeding 23 forms), and integration of SAP with enbek.kz.
IT architecture development
4G mobile coverage
  • Access to high-quality mobile communications and high-speed 4G Internet located production areas and facilities.
  • In November 2022, KAP Technology LLP, in collaboration with the mobile operator KCELL, provided quality mobile coverage and internet access to the Central Moinkum (Kazatomprom-SaUran LLP) and Central Mynkuduk (Ortalyk LLP) mines.
  • In 2023, it is planned to continue cooperation with mobile operators to provide personnel of production facilities and mines with access to mobile communication and high-speed internet.
Modernisation of software and hardware
  • Upgrading the hardware and software and various equipment that support the functioning of corporate services will allow meeting modern challenges and high requirements in the rapid digitisation of the world, as well as ensuring the transition to newer technologies. In 2023, KAP Technology LLP, which has a distributed network, has planned to start a phased network upgrade.
In 2022, a significant number of information security incidents were registered and prevented in NAC Kazatomprom JSC and its subsidiaries and affiliates, as well as jointly controlled enterprises, and work is underway to prevent property and reputational damage to the Company.
Information security

Business transformation opens up new opportunities for real-time decision-making, as well as increases productivity, flexibility and dynamism in the industry, while at the same time requiring special attention to ensuring information security, cyber resilience and continuity of information systems.

To ensure the required level of cyber security, Kazatomprom constantly monitors compliance with information security requirements and strives to develop an information security management system in accordance with the laws of the Republic of Kazakhstan and the international standard ISO/IEC 27001.

As part of the implementation of the Action Plan for the Implementation of the Mechanism "Creation of a Comprehensive Information Security Management System" of the strategic task "Digitalisation and Transformation" to achieve the strategic goal to apply advanced practices in business activities at NAC Kazatomprom JSC for 2018-2028, the implementation of the project "Implementation and development of cyber security" continues. NAC Kazatomprom JSC carries out round-the-clock monitoring and response to information security incidents, as well as actively interacts with the Operational Information Security Centers (OISC) and National Information Security Coordinating Centre. To improve and enhance cyberculture and cyber hygiene in the Group, online training for employees, cyberattacks, and thematic briefings are regularly conducted.

To increase the awareness of personnel in the field of information security, as well as to inform about changes in internal documents regulating information security requirements, an information system was introduced in 2022 that allows for interactive online training for employees of the Company and its subsidiaries. Training was conducted for all employees of KAP Technology LLP in 2022, and for employees of NAC Kazatomprom JSC in January 2023.

As part of cooperation in information security, we work to improve the level of cyber hygiene and digital security, participate in forums and meetings to discuss the digitalisation of the nuclear industry and make plans for the development of IT and IS systems.

Plans for information security development in 2023

Kazatomprom will continue to monitor compliance with information security requirements in all existing and developing IT systems and conduct activities to increase cybersecurity, awareness of information security issues, and protection of confidential information.

In addition, the Company intends to: