Sustainability Management

Key indicators and achievements

Assessment of sustainability practices maturity across the Company's subsidiaries and affiliates

Updated Map of Stakeholders

Analysis of efforts and costs of sustainable development system rollout at the headquarters

A working group was set to foster a project on decarbonisation strategy development and reaching carbon neutrality

A preliminary analysis of compliance with ESG ratings was done using methodologies of Sustainalytics, MSCI, and SP Global

UN Sustainable Development Goals

SUSTAINABILITY MANAGEMENT APPROACH

Kazatomprom contributes to sustainable development, strives to provide and increase long-term economic, social and environmental benefits for both present and future generations. The Company is committed to sustainable growth while ensuring the safest possible production and reducing its environmental footprint.

Company supports the global UN 2030 Agenda for Sustainable Development and contributes to the achievement of the UN Sustainable Development Goals, hardwiring them into its operations. Within the framework of the UN SDGs, a number of benchmarks most consistent with the industry focus and strategy of the Company, and the interests of stakeholders are particularly relevant for Kazatomprom.

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

• Economic sustainability
• Human capital and culture development
• Occupational health and safety
• Environmental consciousness
• R&D, innovations, and technological development
• Effective corporate governance and risk culture
• High ethical standards and anti-corruption measures
• Responsible procurement
• Responsible business practices – engagement with stakeholders and local communities and reporting

Structure of management of aspects of sustainable development

Focusing on the best international practices, Kazatomprom integrates the principles of social responsibility into decision-making processes and operations.

The management system currently in place at Kazatomprom includes a risk management system. The Company is confident that timely risk identification and assessment, as well as an adequate response to risks, allow effective decision-making at all levels and ensure the achievement of strategic goals and key performance indicators of the Company. In this regard, Kazatomprom identified risks in the field of sustainable development for the first time in 2021.

For more details, see the Corporate Governance and Ethics section, the Risk Management and Internal Control subsection

Kazatomprom plans to continue improving its corporate sustainability management practices by developing and implementing internal policies governing various aspects of sustainable development, as well as integrating sustainable development principles into its corporate governance system.

SUSTAINABILITY AWARDS

Kazatomprom seeks to further improve its corporate sustainability actions. In 2021, Kazatomprom’s Integrated Annual Report 2020 was recognised as the best annual report in the non-financial sector and won the Best Interactive Version of the Annual Report nomination announced by the Kazakhstan Stock Exchange (KASE).

NAC Kazatomprom JSC was among the Top 3 Kazakhstani companies in terms of the completeness and quality of disclosed ESG information. PricewaterhouseCoopers Kazakhstan has ranked the Company as 2nd for its achievements in ESG disclosure in the 2020 Integrated Annual Report.

CONTRIBUTION 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 activities, we have identified 6 priority UN SDGs to which the Company makes the most significant contribution.

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 2021 under each goal, see the thematic subsections of the Report.

Socio-economic Contribution

Key indicators and achievements

Kazatomprom allocated

KZT 1.
billion

for socio-economic development as part of its commitments under subsoil use contracts

KZT 0.9
million

in investment in socially important projects

UN Sustainable Development Goals

MANAGEMENT APPROACH

As a large company, Kazatomprom has a significant impact on the environment and life of local communities. Kazatomprom's mining and production facilities operate in five regions of Kazakhstan: Turkistan, Kyzylorda, East Kazakhstan, Akmola, and Northern Kazakhstan regions. Kazatomprom recognises that the long-term 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.

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

In 2021, 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.

KZT 1.
billion

DIRECTED KAZATOMPROM, AS PART OF ITS OBLIGATIONS UNDER SUBSOIL USE CONTRACTS FOR SOCIO-ECONOMIC AND INFRASTRUCTURE DEVELOPMENT, TO THE BUDGETS OF REGIONS OF OPERATION IN 2021

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

• generating significant tax revenues for regional budgets
• making payments to regional budgets under subsoil use contracts
• providing jobs to the local population

CHARITY AND SPONSORSHIP

In January 2016, the Board of Directors of Samruk- Kazyna JSC approved the Charity Policy and the Charity Programme of the Fund, as part of which Kazatomprom implements projects and programs aimed at solving socially palpable issues.

To support local communities, subsidiaries and affiliates can implement charity initiatives independently. Subsidiaries and affiliates participate in annual charity events and cultural activities in the regions where they operate. In particular, they assist children from orphanages and large families and provide social support and sponsor communities, thus, helping improve local public services and amenities. They also play an active role in environmental campaigns and volunteer clean-up days, as well as in organising public events and celebrations.

In addition, subsidiaries and affiliates implement the 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 received requests, including requests from external stakeholders.

KEY RESULTS IN 2021

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.

Kazatomprom initiated a number of socially significant projects in 2021, including the construction of an ambulance station, children's playgrounds and sports grounds, the purchase of educational equipment, improvement of settlements, financial assistance to vulnerable social groups in the form of coal, food baskets, school supplies, New Year presents, as well as a number of other socially significant initiatives.

HEALTHCARE SUPPORT

Projects in this area seek to support the development of healthcare institutions, including purchase of medical equipment, as well as targeted assistance to people with serious diseases: payment for expensive operations, purchase of medicines and rehabilitation.

In the reporting period, Ulba Metallurgical Plant JSC arranged supply of liquid oxygen, which is produced at the UMP nitrogen-hydrogen-oxygen station, to three medical institutions in Ust-Kamenogorsk, where inpatient clinics for the treatment of patients with COVID-19 are functioning.

In June 2021, JV Katko LLP signed a contract with the Turkistan Oblast Akimat to finance the construction of a 25-brigade regional ambulance station.

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.

In 2020, JV KATKO developed a number of projects as part of the 2020-2025 strategy roadmap: among such projects is education and support for schoolchildren and students in Sozak district. 10 students from the region, who are studying at various universities and colleges in Kazakhstan, receive a monthly allowance of KZT 50,000. These are future engineers, doctors, teachers, etc. Also in 2021, the Company assisted 18 students, children of its employees, to obtain higher education. JV KATKO pays for their education in the energy sector at universities of the Republic of Kazakhstan.

In cooperation with the Sozak District Akimat, in 2020- 2021, KATKO sponsored a total of KZT 142 million to fully equip multimedia, biology and physics classrooms at 14 schools in Sozak district. The company also began a partnership with the National Geographic Qazaqstan magazine and provided subscriptions to the magazine for 74 schools in Turkistan 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.

JV KATCO also financed the complete equipping of multimedia classrooms at seven schools of the district for a total of KZT 67.5 million.

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.

In early September 2021, Kazatomprom completed the construction of modern children's playgrounds and sports grounds in seven communities in Turkistan.

SKZ-U LLP provided support to local residents living in Zhanakorgan district of Kyzylorda region. For example, access to drinking water was organised through the Talap-Syrdarya group water pipeline for the sparsely populated village of Kauyk, which is not covered by any state programme to provide clean drinking water because only 34 people live there.

JV Katco LLP financed the construction of a minifootball pitch and a playground in Baldysu village, Sozak district.

Within the framework of the Mal-Zhan Aman project, 1,444 retro-reflective collars for horses, cows and camels grazing along the road, were handed over to owners of households under the sponsorship of APPAK LLP to prevent road accidents at night.

SUPPORTING VULNERABLE GROUPS

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.

Traditionally, as part of Nauryz Meiramy celebrations, Kazatomprom enterprises arrange various activities in the regions where they operate, aimed at providing assistance and support to families in need. Thus, a charity event called 30 GOOD DEEDS was held in Shieli district, dedicated to the 30th anniversary of Independence of the Republic of Kazakhstan. Employees of RU-6 LLP took an active part in this charity event. Seventy low-income families with many children from Shieli village received assistance in the form of food baskets. Employees of Korgan-Kazatomprom conducted the Marathon of Good Deeds – Igі іster kүni – where employees used their own money to help the families of their colleagues with many children, as well as the children of employees in need of medical treatment.

Also, on New Year's Eve, the Council organised a charity event, Jyly Jurek, to give New Year's greetings to children from low-income families with many children. Five families with 30 children were covered in Nursultan.

SUPPORTING VETERANS AND PENSIONERS

Kazatomprom pays great attention to supporting veterans and pensioners who are former employees. To mark the Victory Day, we held events to honour veterans of the Great Patriotic War and home front workers. There were gifts and the required assistance provided. An online flash mob 'I remember, I am proud' was organised.

On a continuous basis, APPAK LLP provides assistance to mothers with many children, home front veterans in the care of Karakura Rural District, pensioners aged 90 and over, people with disabilities and low-income families.

PLANS FOR 2022 AND A SHORT TERM

The following social projects are scheduled for 2022:

• financing the construction and repair of social infrastructure facilities, including the construction of an ambulance station in Turkestan
• construction of children's and sports grounds
• providing assistance to socially vulnerable groups (war veterans, pensioners, large families, etc.)
• organising community events in villages where the Company operates

To engage local residents more actively, Kazatomprom will cooperate with local executive authorities in 2022 to train local residents to register in the HR eKAP information system used to publish job openings in the Company, subsidiaries and affiliates and register potential candidates for employment. Each of the planned meetings in the regions will present the HR eKAP system and explain how to create electronic CVs and responses to job openings.

Social Responsibility

Key indicators and achievements

KZT 1,
million

in investment in personnel training and development

,4
man-hours

of total employee training time

%

of female top managers

UN Sustainable Development Goals

One of the key assets of Kazatomprom is its highly skilled staff. Employees play a key role in production processes, and they are the main driver of success at Kazatomprom.

Kazatomprom has a motivating HR policy, which provides for competitive salaries and a high level of social guarantees (health insurance, pension schemes, health resort treatment and recreation, family programmes, etc.).

MANAGEMENT APPROACH

Kazatomprom has designed an effective HR management system aimed to ensure professional development of employees, improving their qualifications, as well as further career growth in the Company.

The Company strives to create equal and fair working conditions for all employees so that they can fulfil their potential regardless of nationality, gender, origin, age, education, social status, religious, political or other beliefs. This approach is in line with the UN SDGs 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.

Key tasks in human resources management at Kazatomprom:

• recruiting staff on a competitive basis and reducing staff turnover
• ensuring equal working conditions and promoting the professional, career and personal growth of employees
• providing training and professional development opportunities
• accumulating and retaining in-house knowledge
• improving employees’ remuneration and motivation system
• providing social support to employees, including measures to preserve their physical and mental health, as well as improving their quality of life
• developing the corporate culture and increasing the employee engagement level
• maintaining an effective dialogue with employees

Staff recruiting, maintaining a corporate culture and relationships with employees are also based on:

• the Remuneration Policies
• the Rules for the selection and recruitment of personnel
• the Collective Bargaining Agreement
• the Code of Ethics and Compliance
• the Principles of the Corporate Social Responsibility Policy
• International standards and initiatives

Human Resources Management Department and other responsible structural units of NAC Kazatomprom JSC are responsible for HR Policy efficiency and direct relations with personnel.

BASIC CHARACTERISTICS OF THE PERSONNEL

,3
people

TOTAL NUMBER OF KAZATOMPROM EMPLOYEES
(INCLUDING JOINT VENTURES AND ASSOCIATES)

In 2021, the total headcount of the Group's personnel dropped by 1.8% year on year as a result of KazPV projects’ divestment, as well as measures to optimise and modernise processes.

Kazatomprom’s workforce during 2019-2021, persons

The majority of the Group's employees are employed on long-term contracts (>91%), while around 9% are employed on fixed-term contracts.

The average age of employees was 40 years. Employees under 30 accounted for 13.6%.

Equal opportunities

Kazatomprom follows the non-discrimination principle. The Company prohibits any restriction of employees’ labour rights and freedoms or any benefits and advantages received on the ground of gender, race, nationality, language, origin, as well as property, family, social and official status, age, place of residence, religion, beliefs, affiliation/non-affiliation with any public association or social group, as well as other circumstances not related to the employee’s professional qualities.

In the reporting period, no cases of discrimination were recorded.

Gender breakdown

Due to the nature of production operations in the mining industry, the share of females in the total number employed by the Group in the reporting period remained at the level of the previous year and at the end of 2021 was 18%, while the share of males was 82%.

Employment of people with disabilities

As an equal opportunity employer, Kazatomprom provides jobs for people with disabilities. In 2021, the Group employed 153 persons with disabilities, an increase of 2 persons compared to 2020. The share of employees with disabilities in 2021 was 0.7% of the average employees.

TALENT RETENTION

RECRUITMENT AND STAFF TURNOVER

In 2021, 3,316 people were employed by the Group, of which 67% work in South Kazakhstan (including Shymkent). Kazatomprom has no policy of preferential hiring of local employees. Selection for candidates is based on the education, qualifications and professional qualities of the applicants.

In 2021, the Group's staff turnover was 13%. Compared to 2020, this indicator slightly increased by 3%.

In 2021, 51% of employees who left the Group were men aged 30-50 years. Its largest share was in the southern region (including Shymkent), and amounted to 66%. This situation is due to the location of the Company's uranium mining operations.

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 on 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.

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

KZT ,

AVERAGE MONTHLY WAGE OF PRODUCTION
PERSONNEL. INCREASED BY 12.7% IN 2021

The excess is due to payment for downtime owing to circumstances beyond control of employees and employers related to restricted access to workplaces and to payment for employees involved on weekends during pandemic/quarantine periods. In addition, the implementation of the reward systemisation project included an increase in labour costs to introduce additional payments, such as holiday bonuses from the employer or year-end bonuses, which were not previously available in the budgets of individual enterprises.

Kazatomprom’s payroll fund, KZT

Kazatomprom pays special attention to analysing the ratio of remuneration for females and males. Due to the industrial nature of the business, which often requires physical labour, most employees are male. Nevertheless, we do not tolerate any form of discrimination with regard to recruitment, rewards determination, performance appraisal and career development for females.

Long-term and short-term staff motivation

The rewards paid to employees for meeting planned targets, 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:

• financial assistance for annual leave to support the health of employees
• additional payments for concurrent employment and mentoring allowances established by the Group’s management
• additional payments to employees living in an environmental disaster zone, depending on the region of residence, in accordance with Kazakh law
• additional payments to production staff if they work in harmful or dangerous working conditions as prescribed by the laws of the Republic of Kazakhstan

YOUNG PROFESSIONALS

Kazatomprom strives to develop and realize the intellectual, professional and creative potential of young specialists. In 2017, Kazatomprom launched the Zhas Orken internship programme for young specialists, initiated by Samruk-Kazyna JSC. In 2021, the Company and its subsidiaries and affiliates had 13 young specialists on 15 rotations. Upon completion of the 2019 Zhas Orken programme, 12 Kazatomprom mentors were awarded with badges of honour and letters of appreciation from Samruk-Kazyna JSC for their contribution to the Zhas Orken programme in 2021.

In 2021, 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. Thus, in 2021, eight young specialists were selected on a competitive basis to undertake a 15-month paid internship at the Company and its enterprises. As a result of the rotation of the students enrolled under the IZBASAR programme, four graduates of the programme were employed by the Company and its subsidiaries and affiliates.

FEEDBACK

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, www.kazatomprom.kz.

The website provides external stakeholders with the opportunity to leave a written appeal or complaint and, if necessary, to contact the hotline by phone.

The Company supports the development of a feedback culture by:

• conducting feedback surveys
• conducting exit interviews
• developing a corporate portal

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 the elimination of violations and make appropriate recommendations.

STAFF DEVELOPMENT AND TRAINING

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.

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

• training at universities and colleges
• advanced training
• retention and transfer of knowledge

The training is conducted on the basis of the corporate university at Kazakhstan Nuclear University with the involvement of internal experts and external providers.

Kazatomprom invests a significant amount of resources in the training and development of its employees. In 2021, Kazatomprom invested KZT 1,476 million in employee training and development.

,4
man-hours

AVERAGE NUMBER OF TRAINING HOURS PER YEAR
IN 2021

Training is based on the principle of self-learning, according to which 70% of training takes place at work, 20% of skills are acquired by employees through the 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.

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 the 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

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 and management teams, unlocking internal potential, improving cross-functional interaction, as well as applying the acquired skills in the working environment and achieving better results.

Corporate programmes aimed at leadership development, lean production, corporate culture and safety culture are still relevant in 2021.

In the reporting period, Company continued the School of Mine Directors’ programme. 15 employees were trained under the first stage of School of Mine Directors’ programme. Another 19 managers of production facilities and engineering and technical personnel are also currently attending the second phase.

Company's employees traditionally held master classes in 2021. This training programme was recorded, posted on the Group’s corporate portal, and currently available to all employees. Such a format provides for the use of videos as additional training materials featuring unique knowledge and best practices.

Moreover, as part of enhancing financial literacy, master classes were held in 2021 for employees of the Company, subsidiaries and affiliates, with the participation of external experts in economics and finance, internal trainers and employees of relevant structural units of the Company. As part of the internal training development, Kazatomprom held 14 online meetings on sustainable development, HSE, etc.

As part of a professional welfare programme implementation aimed at professional and career achievements of employees, the Company fully implemented a comprehensive staff training and development programme in 2021. In particular, expert master classes and career days were held in order to enhance knowledge of the Company's business processes. A recognition programme was also implemented: professional skills competitions Best Employee of the Year / Zhyl kyzmetkeri.

In 2021, Kazatomprom held its first career hackathon, which included panel discussions with Company experts, and a case championship, the winners of which were given the unique opportunity to participate in individual mentoring, coaching and career sessions with Company top managers and experts, as well as the opportunity to advance to the second stage of the IZBASAR young professionals programme.

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 in order 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 the employee development, progress monitoring and support in the course of their ideas implementation. 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 2021, as part of the programme, the Company:

• updated the composition of managements and functional pools
• prepared their development plans
• implemented the mentorship program

Under the mentoring programme, 9 mentors and 79 mentees were trained in effective interaction with mentors and learnt the feedback skills. Over the entire period of the mentoring programme, 47 mentoring sessions were held with the participation of successors from the headquarters, subsidiaries and affiliates as well as CEO-1 level mentors. The total number of mentor sessions reached 47 hours.

On an annual basis, the headquarters reviews 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.

As of the end of 2021, 376 people were trained in industry-specific specialties, of which 201 were employees of Kazatomprom, its subsidiaries and affiliates and 175 individuals were not employed by Kazatomprom.

KZT 
million

THE COMPANY SPENT ON TRAINING SPECIALISTS
IN UNIVERSITIES AND COLLEGES IN 2021

Kazatomprom continues cooperation with the country's International R&D Educational Centre for the Nuclear Industry, where employees of the Company, its subsidiaries and affiliates, as well as individuals are trained at the expense of subsoil users in priority specialties for the nuclear industry.

In 2021, ten employees of subsidiaries and affiliates enrolled on the master's programme, majoring in geology and exploration of solid mineral deposits, as prescribed by the subsoil use contracts.

STAFF WELFARE

Kazatomprom fosters social support measures aimed at continuously improving working conditions and the quality of life for employees. 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.

The core principles of Company's social policy comprise:

• taking care of employees – physical, financial, mental and social welfare
• improving working conditions – improving the working environment and the production process
• improving social and living conditions of employees of the Group's entities – ensuring comfortable working and recreational conditions aimed at health care and safety of workers
• Enhancing staff motivation and creating a favourable psychological climate in the team: recognition programmes (corporate awards, professional skills competitions, “Best Employee of the Year” for employees of the headquarter and “Zhyly Kyzmetkeri”, aimed at raising the prestige of blue-collar jobs and engineers), remote work introduction, financial support for employees with many children, development programmes, workshops in financial literacy and much more

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

In 2021 Company organised a number of events aimed at self-fulfilment in social functions and supporting the social welfare of employees: Health 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. Company initiated meetings with external and internal experts to share expertise on loans, effective management of personal and family budget, etc. Kazatomprom employees had the opportunity to communicate and consult with bank representatives on the possibility of using pension savings.

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 termination of the employment contract. The Group companies have a unified approach to full-time and part-time 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 2021, maternity/paternity leave was granted to 345 employees, where 50 are men and 295 are women.

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.

On occasion of the 30th anniversary of the Independence of the Republic of Kazakhstan in 2021, the employees with large families of the Company's subsidiaries and affiliates received additional bonuses. There were about 2,500 families.

HEALTH CARE AND WELFARE OF EMPLOYEES

One of the key Kazatomprom priorities is the health and welfare of its employees. Company has elaborated and implemented various programmes aimed at supporting physical and mental health, as well as increasing 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 carries out systematic work to improve physical welfare and form healthy habits to enhance the quality of life, improve health and increase productivity.

Effective programmes were implemented in 2021:

• voluntary health insurance for employees and family members
• mandatory annual preventive medical examination
• daily surveys of employees' welfare and mood
• meetings with experts dedicated to health care and healthy lifestyle, particularly in the field of post-COVID rehabilitation and recovery

TRADE UNIONS AND HUMAN RIGHTS

Kazatomprom does not restrict the employees’ rights to found 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 that Kazatomprom has a reliable partnership in complying with labour legislation and actively participates in protecting the interests of employees. As of the end of 2021, 10,700 employees of the Group's enterprises are members of the Trade Union.

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

COLLECTIVE BARGAINING AGREEMENT

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 renewal.

%

IS PERCENTAGE OF EMPLOYEES COVERED BY COLLECTIVE BARGAINING AGREEMENTS

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

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

Kazatomprom prohibits any restriction of employees’ labour rights and freedoms or any benefits and advantages received on the ground of gender, race, nationality, language, origin, as well as property, family, social and official status, age, place of residence, religion, beliefs, affiliation/non-affiliation with any public association or social group, as well as other circumstances not related to the employee’s professional qualities.

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 long-term partnerships only with suppliers who share and comply with the Group's ethical principles, who do not accept corruption, who respect human rights, and who care about occupational health and safety. Kazatomprom does not use child labour.

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 observance of human rights in accordance with the Code of Suppliers and Contractors of NAC Kazatomprom JSC.

Kazatomprom has an Ombudsman Service ensuring:

• human rights compliance within the Company
• employees awareness and comprehension of the Code of Ethics and Compliance
• individual meetings with employees at the enterprises regarding personal matters

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 of its feedback channels.

In 2021, 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.

The high level of development of the Company's corporate culture, in particular, contributed to the rapid adaptation of personnel to the COVID-19 pandemic. During the crisis, the Company was able to provide employees with safe working conditions and demonstrated support and care.

In 2021, in order to determine the further development of corporate culture, the NAC Kazatomprom JSC Corporate Culture Diagnostic project was implemented. The study involved 70% of employees of the Central office and subsidiaries and affiliates. The Company diagnosed the current and target corporate culture, identifying strengths and vectors for further development.

The study results showed that the Company achieved the target level of corporate culture that was set in 2017. The roadmap for further promotion of corporate culture for 2022-2025 was developed based on the study results.

The roadmap for further development of corporate culture for 2022-2025 has been fully implemented. As part of the project, a competency model has been implemented, a succession programme has been developed and implemented, the employee training and performance appraisal system has been improved, and measures have been implemented to increase employee engagement, manage material and nonmaterial incentives, develop the communication system, leadership programmes and strengthen the employer brand.

In order 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.

According to the results of the independent Randstad Employer Brand Research in 2020-2021, Kazatomprom was included in the TOP 10 best employers of Kazakhstan and TOP 3 best employers in the mining and metallurgy industry of the country. This evidences the effectiveness of actions aimed at promoting the employer brand.

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 2021, employees of the Company and subsidiaries and affiliates continued implementing large-scale volunteering projects.

EVENTS FOR EMPLOYEES

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

In 2021, given the epidemiological situation in the country, corporate events were held in an online format, while some events were held offline due to the high percentage of vaccinated employees.

Actions aimed at maintaining traditions and corporate spirit within Kazatomprom included:

• online greetings dedicated to March 8 and May 7
• Nauryz – Dästür online teambuilding
• children's art competition and online programmes for Children's Day
• online celebration of the Company's birthday
• Where's the Logic? online game
• online greetings on Nuclear Industry Workers Day
• New Year online events, a flash mob with the participation of all Kazatomprom's subsidiaries and affiliates “New Year's festive round dance”

In 2021, in order to promote a healthy lifestyle, the Company held the XX Spartakiada Sports Games of Kazatomprom enterprises in online/offline format in seven sports. Tournaments in mini-football, streetball, badminton, track and field and table tennis took place offline. The online format included tournaments in cybersport (PUBG Mobile) and chess. In total, more than 600 employees of the headquarters and subsidiaries of Kazatomprom took part in the Spartakiada.

INTERACTION WITH MANAGEMENT

In 2021, Kazatomprom's internal communications system remained the main tool to ensure that employees were timely informed about current events in the Group and helped maintain a positive atmosphere in the team.

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

Interviews were held with top managers of subsidiaries and affiliates to inform them about the measures taken at the enterprises to prevent COVID spread. Employees and top management held online meetings.

There is a functioning Kazatomprom RHYTHM programme, which informs employees about the Company's projects. The Qasyndamyz-2020 corporate employee support programme has been implemented, which includes volunteer and charity initiatives to support employees during the pandemic.

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 corporate QazAtomNews e-magazine.

LEVEL OF 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 involvement of employees are implemented in accordance with the developed plans and supported by all employees of the Company.

The annual positive performance appraisals are confirmed by regular surveys on the level of social stability.

%

THE LEVEL OF SOCIAL STABILITY IN THE GROUP
(ACCORDING TO THE SURVEY)

In 2021, the Centre for Social Interaction and Communications (PE) conducted research to determine the level of social stability “Samruk Research Service” (SRS) at 18 enterprises of Kazatomprom Group.

PLANS FOR 2022 AND A SHORT TERM

In 2022, Kazatomprom will continue the employee support programmes, retain and develop HR potential, and maintain the level of employee engagement by developing the employer brand, among other things.

The Company plans to pursue activities aimed at improving the efficiency of remuneration and financial incentive system, to continue automation of personnel management processes, to implement management succession and leadership development programmes, to systematise remuneration, and to take measures aimed at improving working conditions.

In accordance with the Company's priorities, we plan to expand work with trade unions as representatives of the social partnership, to implement measures to amend collective bargaining agreements with regard to the distribution of responsibilities between the employee representative and employers, and to maintain social stability, develop a negotiating culture and improve internal communication efficiency.

Aiming to improve employee satisfaction with working conditions, the Company plans to develop and implement standards for catering, provision of protective clothing, organization of living conditions for shift workers, as well as medical care for employees in 2022-2023.

Company has begun to elaborate the Corporate Culture Roadmap, which will help achieve Kazatomprom's target corporate culture model and further promote corporate values.

In line with ESG principles, we are set to introduce practices to maintain and develop diversity and inclusiveness, including the promotion of women's leadership, as well as the implementation of projects to support local communities in the regions of operations.

High production achievements and further development of the Company, development of new types and areas of operations, development and implementation of promising projects will directly depend on the effectiveness of social investments aimed at ensuring a high level of employee engagement and commitment to Kazatomprom’s values.

Health and Safety

Key indicators and achievements

KZT .
billion

invested in H&S

,5
employees

took advanced H&S training courses

UN Sustainable Development Goals

APPROACH TO H&S MANAGEMENT

One of Kazatomprom's priorities is to ensure strict compliance with nuclear, radiological and conventional health and safety (H&S) standards and thus provide a high level of health and safety for its workforce. Company continually improves the H&S management. Kazatomprom strictly complied with national and international requirements and standards in all its operations.

The key H&S regulation documents include Kazatomprom’s Policy for HSE, Radiological and Nuclear Safety, as well as the H&S Code, Unified Occupational Safety Management System. The documents are binding on all employees and contractors of the Group.

The Management Board pays close attention to occupational health and safety. The Management Board Chairman conducts quarterly meetings of the CEOs and executives of subsidiaries and affiliates to discuss the action plans that will help improve the health and safety culture in the Company as well as prevent accidents and injuries.

The enterprises of the Group implement H&S measures as health and safety of employees is the highest priority for Kazatomprom. The HSE of the Board of Directors and the Risk Management Committee of Kazatomprom Management Board regularly review the results of all health and safety measures. The reports on H&S improvements and risk management are submitted to the Board of Directors for consideration and approval.

The HSE Managing Director accountable to the Board Chairman is responsible for the overall coordination of the activities aimed at improving the H&S system in the Company and its subsidiaries and affiliates.

The H&S Department supervised by the HSE Managing Director is responsible for 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.

All occupational H&S departments at subsidiaries and affiliates are subordinate to the CEOs. In 2021, the Company continued approving and expanding the functions and powers of the structural units responsible for H&S operational management at subsidiaries and affiliates.

Kazatomprom regularly analyses the structure of qualifications and competences of the H&S units of the Group. Following the analysis, the Company introduces the respective changes to remain in line with the requirements of national laws and the best world’s practices and improve the H&S efficiency.

COMPLIANCE OF THE MANAGEMENT SYSTEM WITH THE INTERNATIONAL STANDARDS

In 2021, TÜV International Certification conducted an audit of the Company’s integrated H&S management system for compliance with ISO 45001 and ISO 14001 for the first time. The audit results confirmed the compliance of the Company’s occupational health and safety management system with the requirements of international standards.

H&S RISK ASSESSMENT

The H&S risk management process is an integral part of the H&S management system, as well as of the corporate risk management system. Kazatomprom is actively working to prevent industrial injuries and occupational diseases, as well as to identify, assess, and minimize industrial risks.

All activities of the Group's enterprises are carried out 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 takes into account the requirements of a number of by-laws regulating the procedures for complying with the H&S requirements, in particular, the Rules for Ensuring H&S for Various Types of Activities – Geological Exploration, Mining and Processing of Uranium, Operation of Lifting Mechanisms and Pressure Vessels.

The above documents guide the procedures for investigating accidents and incidents at the Group's enterprises. 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.

In accordance with the investigation procedures, Kazatomprom initiates an additional analysis of the accidents, using the Five Whys methodology to reveal the root causes of an incident.

The executives and heads of H&S services of subsidiaries and affiliates initiate meetings to review and analyse all the circumstances of the accidents that have occurred. Based on the results of the meetings, all subsidiaries and affiliates, in accordance with the notification procedures developed by Kazatomprom, receive quarterly information reports on injuries containing a detailed description of the accidents that have occurred, their root causes, and measures taken by the Company. Moreover, an information bulletin is issued and disseminated to all CEOs of subsidiaries and affiliates in case of an incident or accident.

Company keeps a register of risks, with “occupational injury” being the major risk. To reduce occupational injuries, the Company develops and implements comprehensive measures to meet the established safety standards and constantly improve the level of H&S, as well as prevent occupational injuries.

These comprehensive actions include:

• developing measures to prevent the recurrence of accidents
• conducting regular inspections of the Group's assets for compliance with H&S regulatory acts
• regular informing of subsidiaries and affiliates about the results of the investigation of industrial injuries and providing proposals for the prevention of work-related injuries
• holding valid and up-to-date workplace certification, which means audits of working conditions and provision of suitable work-ware and protective equipment to employees of subsidiaries and affiliates
• implementing a corporate plan for the development of the H&S culture
• keeping records of potentially unsafe conditions, acts, and near-miss incidents at Kazatomprom companies (Near Miss reporting)
• introducing behavioural H&S audits
• ongoing use of the tool behavioural H&S audits

,

BEHAVIOURAL AUDITS INVOLVING COMPANY MANAGERS AND THE HEADS OF SUBSIDIARIES
AND AFFILIATES TO MINIMISE THE RISK OF HUMAN FACTORS THE COMPANY CONDUCTED IN 2021

Since 2018, the Company has been conducting behavioural safety audits. The main goal is to analyse the behaviour of employees at work (when they are performing production tasks) and thus to prevent the behaviour-related risks. Constant analysis and monitoring of data confirms that human factor is the most frequent source of risk at any production company. In addition, the Company 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, the availability of all necessary internal documents, including instructions, procedures and standards.

In 2020, Pandemic Risk was added to the corporate risk register. This risk is associated with the spread of SARSCoV- 2 and the start of COVID-19 pandemic. To ensure the safety of workers and the continuity of production during the pandemic, the Company continued managing this risk in 2021.

Kazatomprom has introduced a risk-based approach to improve the H&S system across the Company. As part of this initiative, the Occupational H&S Department of the Group has developed a register of functional risks, which includes the major occupational H&S hazards and risks. The register of functional risks is reviewed and updated annually. The risk-based approach also integrates an approach to planning and conducting inspections/audits. They are carried out as preliminary inspections/audits of the Company’s assets to identify the most dangerous production areas. The audit results help focus on the major risks, improve quality, and reduce the waste of time resources.

HSE PERFORMANCE

The health and safety of staff is a top priority for Kazatomprom. The Company regularly implements comprehensive measures and world’s best practices to prevent accidents and incidents and meet the H&S objectives. Kazatomprom conducts regular campaigns to raise the health and safety awareness of its personnel and thus to improve the safety culture in the Group.

%

THE COMPANY'S EMPLOYEES ARE COVERED BY THE
H&S MANAGEMENT SYSTEM AND SUBCONTRACTOR
EMPLOYEES IN 2021

Golden Safety Rules

In 2021, the Company conducted the awareness raising campaign with engagement of executives of subsidiaries and affiliates to explain the Golden Safety Rules to its employees. The TV channels broadcast videos on H&S culture, 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 systematic approach and investment.

KZT .
billion

THE COMPANY HAS INVESTED IN HEALTH
AND SAFETY IN 2021

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

Company has developed a system for evaluating the employee performance. 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 “Number of identified hazardous conditions, hazardous actions, and Near-Miss incidents” and “Implementation of corrective measures”. This high-level KPI is then 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 effective identification and implementation of measures aimed at improving the health and safety management system in the Company, Kazatomprom holds an annual corporate meeting on the H&S performance and plans for the next year. On 19 February 2021, the meeting adopted minutes with specific instructions on H&S improvement measures.

Throughout the year, all subsidiaries and affiliates conducted scheduled inspections for compliance with H&S regulatory legal acts.

In addition, in 2021, the H&S Management System corporate standard was introduced at all mining subsidiaries and affiliates.

The Occupational H&S Management System standard is designed to harmonize the structure and content of the H&S management system of the Company and its subsidiaries and affiliates with the applicable requirements, based on the legislation 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.

PERFORMANCE RESULTS

Kazatomprom keeps a register of risks, with occupational injuries indicated as one of the major risks in the Company. We have 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 at their contractors, include traffic accidents, handling sulphuric acid, falling from height and falling on slippery surfaces.

OCCUPATIONAL INJURIES AND ACCIDENTS

Despite a consistent decrease in the number of workrelated accidents and one of the lowest LTIFR in the industry in 2020, Kazatomprom continues to make every effort to reduce the number of accidents to “zero” and ensure accident-free production activities and safe working conditions for workers.

In 2021, nine accidents were recorded at the Group's enterprises that left 18 people injured. A traffic accident involving Volkovgeologiya JSC employees took place on a road between Turkestan-Taikonur and led to death of two people. A special investigation established that the cause of this accident was a violation of the traffic rules by the driver, in auricular his failure to monitor the movement of the vehicle on an ongoing basis.

In 2021, LTIFR made 0.55. The total number of highimpact occupational injuries (excluding fatal accidents) made eight.

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

Company used the investigation results to develop a set of measures that were then communicated to all companies of the Group and introduced in a timely manner.

In 2021, there were no accidents among non full-time employees, but whose work and/or workplace is controlled by the Company.

PREVENTING OCCUPATIONAL INJURIES

The Group constantly implements measures aimed at preventing occupational injuries. In particular, these include:

• conducting scheduled and unscheduled safety briefings
• organizing meetings of occupational H&S services to analyse the root causes of accidents and develop prevention measures
• informing employees about preventive H&S measures
• employee training and upskilling
• identifying near misses and taking corrective measures
• conducting behavioural safety audits
• using stop cards by workers to stop unsafe work, or refusal by workers to do work if they believe the work cannot be done safely
• developing and updating internal regulations (standards and instructions) on occupational safety
• carrying out checks at five levels of production control
• using Lockout/Tagout
• training top management at a bespoke course, Leadership in Occupational Safety
• conducting regular employee surveys to assess satisfaction with the HSE system
• enhancing the motivation by holding an annual Chairman of the Board Award among employees of subsidiarie, affiliates, and jointly controlled organisations of NAC Kazatomprom JSC in the areas of occupational safety, environmental protection, industrial and radiation safety. The number of identified near-misses is among the criteria to select the best employees

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

Video conference meetings are held monthly with the heads of H&S services of subsidiaries and affiliates to discuss H&S issues, including the circumstances and causes of accidents, as well as serious incidents without consequences. In addition, appropriate measures are being developed to prevent their recurrence, and, if necessary, risk registers are updated. All recommendations for the implementation of activities are then reflected in protocol instructions. 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, 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 authorized 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.

H&S measures implemented by the Company's enterprises made it possible to prevent industrial accidents (uncontrolled explosions, releases 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 worker’s life and health. The Company’s employees have access to health improvement and spa treatment programmes. These benefits are included in the social benefit 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. Also, Kazatomprom has a system of medical insurance in place for its employees.

In addition, employees of subsidiaries and affiliates are provided with three meals a day.

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 medical facilities of the Group are equipped with the necessary equipment, ambulances and medical care supplies: defibrillators, ECG, oxygen cylinders, humidifier (oxygen concentrator), pulse oximeters, etc.

Kazatomprom’s health and safety 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 conducting outreach work 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 185 people, including 31 doctors, 116 paramedics, and 38 nurses.

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

KZT .
billion

THE COMPANY INVESTED IN HEALTH AND SAFETY
INITIATIVES AND OCCUPATIONAL DISEASE
PREVENTION IN 2021

In accordance with the requirements of the Labour Code of the Republic of Kazakhstan, all Group enterprises have mandatory pre- and post-shift 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 preshift 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 mid-term perspective, all subsidiaries and affiliates of the Group plan to install similar digital systems for preshift checks.

In addition, in accordance with the requirements of the Labour Code of the Republic of Kazakhstan, 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 postshift medical check-ups.

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

IMPROVING THE H&S CULTURE

All staff of the Group’s enterprises are actively engaged in the H&S management, which allows the Company to achieve a high level of health and safety. To ensure effective communication with employees on H&S issues and meet the requirements of the Labour Code of the Republic of Kazakhstan, the Company established special H&S councils that include representatives of the employer, workers, and technical inspectors. The councils exercise control over the compliance with the H&S at workplaces. The H&S inspectors conduct audits of working conditions and workplaces to check their compliance with the H&S requirements. Decisions of the inspectors are binding on the employer and employee of the Group’s enterprises.

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 2021:

• the Company got certified according to ISO 45001 (occupational health and safety) and ISO 14001 (environmental management)
• works were carried out to improve environmental and social stability in the regions of Kazatomprom operations within the framework of the ESAP Roadmap
• a training session was organized for employees of subsidiaries and affiliates who provide H&S briefings on the topic “Effective methods of conducting briefings”
• the corporate standard "Occupational Safety Management System" was developed, approved, and implemented at subsidiaries and affiliates
• an action plan was developed to reduce the level of injuries at subsidiaries and affiliates for 2022
• in addition, the Company implemented a number of measures to reduce the risks of COVID-19 infection among employees
• the Company launched the HSE Club to share information and knowledge and develop measures to improve the H&S management system at the group companies

All these measures in 2021 helped improve health and safety culture of the Group's employees, and will help avoid incidents in the future.

To develop a culture of safety and leadership among managers at all levels in the Company, an educational e-course Leadership in the H&S Culture of Kazatomprom was developed and is currently being implemented. In addition, as part of the H&S system improvement, the Company organized 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. Aldo, the Company organized special mandatory H&S courses. To measure the effectiveness of the training, all participants had to complete a knowledge test at the end of the course.

,

EMPLOYEES PARTICIPATED IN HSE CULTURE
TRAINING IN 2021

Kazatomprom conducts HSE training sessions on a regular basis. The courses can be divided into mandatory and optional. In particular, 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 not required by laws, in particular courses on the development of safety culture, leadership, and responsibility in HSE matters are optional.

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.

MANAGING THE HEALTH AND SAFETY OF CONTRACTORS

In its production operations, the Group not only monitors the compliance with all environmental protection standards and requirements at its enterprises, but also requires from all contractors working with Kazatomprom to comply with H&S regulations and standards without exception.

Thus, all the Company's contractors and suppliers of goods, works and services have to comply with Kazatomprom’s corporate standard Occupational Health and Safety Standards. Health and Safety Requirements for Contractors.

The Company conducts preliminary review of contractors for their compliance with H&S standards. The experts of the Company check if contractors comply with the H&S requirements as early as at the stage of signing the contract. The Company assesses the risks and sets goals, as well as plans H&S training sessions with account of the information about the incidents relating to the work of contractors. The results are then to be approved by the Occupational Health and Safety Department.

When the work is performed or services rendered, the employees of the Occupational H&S Department and subsidiaries and affiliates also conduct regular audits and exercise control over compliance with the health and safety standards and rules. The H&S services of subsidiaries and affiliates keep records of all accidents that have occurred at contracting organizations. They are authorized to conduct behavioural safety audits in relation to the employees of contractors. Contractors that have long-term contracts with the Group are obliged to introduce procedures for identifying and registering hazardous conditions, dangerous acts and Near Misses.

To improve the H&S knowledge, the Company organizes H&S training courses for employees of contractors as well as invites authorized representatives of contractors to participate in the H&S meetings.

NUCLEAR SAFETY

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

At present, the companies of the Group that have nuclear materials include Ulba Metallurgical Plant JSC and Ulba FA LLP.

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

In 2021, the Chief Physicist’s Services (CFS) of Ulba Metallurgical Plant JSC and Ulba FA LLP implemented the following actions:

• regular H&S knowledge testing for specialists of the finished product warehouse, uranium production (UP), the IAEA LEU warehouse, and auxiliary units of Ulba Metallurgical Plant, as well as the area relating to the fuel pellets and fuel assemblies shop and the fuel assemblies shop at Ulba FA LLP
• commission inspections of nuclear safety at Ulba Metallurgical Plant JSC and Ulba FA LLP
• emergency response training of staff and services in case of an alarm signalling about a self-sustained nuclear chain reaction in all nuclear hazardous areas of Ulba Metallurgical Plant JSC and Ulba FA LLP
• an on-site audit of the H&S at Ulba FA LLP, which included the inspection of nuclear and radiation safety in accordance with the annual audit plan of the H&S department

The absence of accidents and incidents throughout the reporting year is a signal of the effectiveness of these measures.

RADIATION SAFETY

In 2021, 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 2020.

The average radiation exposure for staff was 1.44 mSv/ year in 2021, including natural radiation sources. The radiation from the natural background sources ranged from 0.75 to 1.36 mSv/year.

In turn, the maximum annual effective dose for personnel at the Group's assets was 6.19 mSv/year, which is 31% of the permitted dose limit, which is 20 mSv/year.

In 2021, the Company started keeping records of the radiation exposure of staff of contracting organizations. The average radiation exposure for staff of contracting organizations employed at the Group's enterprises and engaged in decontamination of overalls and preparation of shipping packaging kits with finished products was 0.65 mSv/year.

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

• conducting repair work on the premises and modernizing equipment
• repairing and upgrading technological equipment
• moving low-level radioactive waste to disposal sites
• repairing and purchasing radiation control equipment
• providing radiation safety training for employees
• conducting the certification of people by the authorized state agency responsible for the use of atomic energy

EMERGENCY PREPAREDNESS AND RESPONSE

A set of measures for civil protection, emergency situations and fire safety in 2021

The Company takes ongoing measures to maintain a high level of emergency preparedness. Fire safety systems of the Company are checked 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 safe evacuation of staff from the Company's buildings to the specially designated assembly points.

In 2021, Kazatomprom updated its Standard ST NAC 13.2-2021 'Ensuring Security. Organization of fire safety at Kazatomprom's enterprises, Instruction on Fire Safety Measures in the Administrative Building of NAC Kazatomprom JSC was elaborated and approved ⁵⁷.

In October 2021, competent government authorities carried out 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 in the field of fire safety, the building of the Company was in compliance with the requirements of the ISO 14001:2015 and ISO 45001:2018 standards.

In an effort to promote the health and safety, the Company developed and approved a Plan of Civil Protection and a Plan of Action on the Elimination of Facility-based Emergencies in Kazatomprom’s office building.

According to the H1 2021 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.

Climate Change and Energy Efficiency

Key indicators and achievements

,
tonnes of CO₂ eq

the greenhouse gas emissions from the Company's operations

All enterprises of the Group have implemented an energy management system that manages energy efficiency issues and complies with the requirements of ISO 50001:18001

UN Sustainable Development Goals

Global climate change is associated with a large number of risks and an increase in the number of dangerous climatic events: water scarcity, food shortages, biodiversity loss, and natural disasters, which lead to serious economic consequences, hunger and wars.

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 while at the same time find means to further limit this increase to 1.5 degrees.

Having ratified the Paris Agreement, the Republic of Kazakhstan has chosen a low-carbon development vector for itself. The transition to a low-carbon economy and adaptation to the consequences of climate change are the strategic objectives for Kazakhstan. Kazakhstan has introduced an online system for monitoring, reporting and verification of GHG emission sources at the national level. The government reports annually to the UNFCCC Secretariat on GHG emissions. Emissions from major GHG sources are limited by the National Allocation Plan.

As a member of the International Atomic Energy Agency (IAEA), the Republic of Kazakhstan supports the intentions and actions of the international agency for the application of nuclear science and technology to monitor climate change, mitigate its consequences, and adapt to them, making its own contribution to reducing the impact on climate.

Following global priorities, sharing a national position and striving to contribute to the implementation of the provisions of the Paris Agreement, Kazatomprom considers the fight against climate change as one of its priorities. To this end, the Company is developing a Strategy for decarbonisation and achieving carbon neutrality until 2025, 2030 and 2060, which will include a Program and Action Plan to reduce GHG emissions in the context of each subsidiary and affiliate of the Company for the period up to 2025, 2030 and 2060.

Low-carbon initiatives of NAC Kazatomprom JSC:

• transition to low-carbon energy sources (gas)
• energy production from renewable sources – solar collectors, heat pump units, wind turbines are installed at the Group's production sites
• regular monitoring and control of greenhouse gas emissions (Scope 1)

Monitoring and recording of greenhouse gas emissions is carried out by the Industrial Safety Department, which reports directly to the Chairman of the Management Board of Kazatomprom. The Company also monitors the state of technological facilities and environmental objects, as well as introduces the best available technologies, resource and energy saving technologies.

The Company discloses data on greenhouse gas emissions, which is in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). The Company is working to deepen the disclosure of climate-related risks and opportunities under the TCFD methodology in future reporting periods.

In 2021, a GHG inventory was conducted, including Scope 1 and Scope 2 emissions.

Greenhouse gas emissions from operations of subsidiaries and affiliates are mainly related to auxiliary processes associated with the main production.

The main sources of greenhouse gases are:

• boiler installations for heating industrial and residential premises
• vehicles for transportation of goods and personnel
• compressor units for supplying compressed air to technological processes
• diesel generator sets to provide emergency power supply
• other sources

The coefficients used for GHG emission calculations comply with the Guidelines for the calculation of greenhouse gas emissions from thermal power plants and boiler houses and the Guidelines for the calculation of greenhouse gas emissions into the atmosphere from motor transport enterprises issued by the Ministry of Environment and Water Resources of the Republic of Kazakhstan.

In 2021, the greenhouse gas emissions from the Company's operations amounted to 106,910 tonnes of CO₂ eq. The increase in GHG emissions in 2021 was associated with an increase in fuel consumption by vehicles, an increase in drilling and the resumption of other works due to the ease of quarantine measures.

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.

ENERGY EFFICIENCY AND ENERGY SAVING

To minimise its impact on the environment and reduce its ecological footprint, the Company lays emphasis on programmes reduce and optimising the energy use.

By introducing energy-efficient equipment, rationally using natural resources, and modernising production processes, Kazatomprom improves energy efficiency and reduces the energy intensity of production. In the field of energy consumption and energy efficiency improvement, the Company's management has 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.

KZT 0
million

IN 2021, THE COMPANY IMPLEMENTED A SET OF MEASURES TO IMPROVE ENERGY EFFICIENCY. ACTUAL ECONOMIC EFFECT FROM THE IMPLEMENTATION OF MEASURES OR AN INCREASE OF 3.6% OF THE PLANNED INDICATOR

The amount of fuel and energy resources saved as a result of energy saving and energy efficiency measures in 2021 amounted to 170,000 GJ.

In 2021, the Company increased its energy consumption by 8% compared to 2020, due to increased production, extraction, and processing of raw materials.

ENERGY INTENSITY

In 2021, the consumption of fuel and energy resources (FER) at the Group's enterprises increased by 9.4% compared to 2020. This is due to an increase in production, extraction and processing of raw materials. At the same time, specific energy intensity decreased by 1.9% in 2021.

ALTERNATIVE ENERGY

Kazatomprom aims to improve the efficiency of its energy supply by moving from carbon-intensive energy production to a more sustainable one. In this regard, Kazatomprom enterprises actively use alternative energy sources, which allow saving fuel and energy resources and helping to reduce greenhouse gas emissions:

• photovoltaic stations (PV)
• solar collectors (or solar water heaters)
• heat pump units (HPU)

The Company is looking for ways to use new alternative energy sources at its enterprises. In this regard, JV South Mining Chemical Company LLP plans to design and install a 100 kW wind turbine in 2022 at the South Inkai mine.

PLANS FOR 2022 AND A MEDIUM TERM

Actions are planned for 2022 to assess products' carbon footprint with the development of decarbonisation and carbon neutrality programme for the Company's enterprises.

The solution to the issue of developing renewable energy sources and reducing greenhouse gas emissions for Kazatomprom enterprises is the further development of energy saving and energy efficiency, the main directions of which are:

• rational distribution and use of electricity, lighting, heating, hot water supply and ventilation systems
• measures to modernize electrical equipment, replacing them with energy-saving ones
• implement the process of ensuring the proper technical condition and rational operation of power equipment and power plants, ensuring the proper technical condition of power equipment and power plants

As renewable energy sources a number of the Company's enterprises are gradually installing solar collectors for hot water supply and heat pumping units for heating and hot water supply. These measures will reduce the cost of diesel fuel and consequently reduce greenhouse gas emissions. In 2022, activities are planned to design and install a 100 kW wind turbine generator at the Yuzhny Inkai mine, JV SMCC LLP; work is underway to re-equip the boiler plants of the shift camp of Karatau LLP with the conversion of water heating boilers from diesel fuel to liquefied gas with commissioning in Q2 2022.

Environmental protection

Key indicators and achievements

KZT .6
million

in investment
in environmental protection

.2%

reduction in the total water withdrawal

UN Sustainable Development Goals

ENVIRONMENTAL PROTECTION MANAGEMENT

Environmental protection is a top priority for the Group. Kazatomprom recognises its responsibility for its environment footprint, as well as its impact on health, safety and quality of life. The Company takes all necessary measures to ensure environmental safety, preserves the natural environment in the areas of its operation, rationally uses the natural resources and minimises its environmental impact.

The principles of environmental protection management of the Group are outlined in Kazatomprom’s Policy for H&S, environmental protection, radiation and nuclear safety.

When implementing its target production plans Kazatomprom tries not only to provide people with clean energy, but also save the planet for future generations. To this end, the Company has set the goal to achieve a zero environmental footprint.

The implementation of comprehensive measures and activities in the area of environmental protection means that the Company takes consistent efforts to minimise the negative environmental footprint, increases the level of environmental safety, and guarantees sustainable development of its enterprises.

The Company applies the precautionary principle, especially in the area of HSE. This principle is hardwired into the risk management.

Kazatomprom introduces new technologies and the world’s best practices to improve environmental protection (EP) processes and ensure rational use of natural resources. The Company uses the most environmentally friendly method for the extraction of uranium, in-situ recovery of uranium (ISR), also known as in-situ recovery. This technology reduces the risk of harm to the health and safety of employees and the population and allows for natural restoration of groundwater following the completion of mining. This technology does not lead to radioactive contamination of vast areas.

The Group identified the UN Sustainable Development Goals 3, 7, 8, 9, 12, and 13 as the major EP objectives within the framework of the 2030 Agenda for Sustainable Development along with radiation and nuclear safety goal.

The environmental management system functioning as part of the integrated HSE Management System of the Group allows the Company to coordinate environmental protection efforts with the its activities aimed at ensuring industrial, nuclear and radiation safety, as well as with other related areas.

The Occupational Health and Safety Department of Kazatomprom manages environmental activities at the headquarter. At the same time, subsidiaries and affiliates of the Group set up divisions responsible for managing environmental protection activities locally.

Kazatomprom management provides regular control over the environmental management situation. The Occupational H&S Department provides weekly environmental management reports to the Chairman and members of the Management Board of the Company during the board or production meetings. In addition, the department prepares a quarterly report on the implementation of the ESAP Roadmap and submits it to the members of the HSE Committee.

Key Documents Regulating Environmental Protection Issues

• Kazatomprom’s policy on occupational health and safety, environmental protection, radiation and nuclear safety
• Corporate social responsibility policy of Kazatomprom
• Rules of production and consumption waste management at Kazatomprom enterprises
• Corporate standard, Methodology of calculating waste generation standards per unit of production at Kazatomprom’s enterprises
• Corporate standard, System of HSE Standards. HSE Requirements to Contractors
• Methodological Guidelines for the Management of Radioactive Waste Prior to Landfill
• Methodological Guidelines for Monitoring of the Impact on Ground and Underground Water in ISR Mining of Uranium
• Methodological Guidelines on Liquidation Cost Estimate Calculation and Procedures for Regular Analysis of Current Liquidation Costs (measurement of asset retirement obligations (ARO))
• Guidelines for Assessment of Biodiversity at Uranium Deposits, Production Facilities and Adjacent Territories
• Manual Establishing the criteria for eliminating the consequences of uranium mining activity of enterprises
• Manual Procedures for developing processes for the exchange of environmental information at Kazatomprom
• Manual Development of the Plan for Engagement with Stakeholders of Subsidiaries and Affiliates of Kazatomprom on Environmental and Social Matters

ESAP ROADMAP IMPLEMENTATION

In 2021, in an effort to implement the Environmental and Social Action Plan (ESAP), Kazatomprom:

• studied the impact of production facilities on the environment and the local population
• worked to build a sectoral system of environmental regulation and monitoring of uranium mining enterprises
• continued developing corporate standards of occupational safety at operating sites
• the Green Financing Policy of NAC Kazatomprom JSC was approved

MONITORING AND CONTROL

As required by the environmental laws of the Republic of Kazakhstan, the Group's subsidiaries and affiliates carried out quarterly industrial environmental control (IEC) with the involvement of accredited contracting organizations (laboratories) as per the IEC Schedule in the reporting period.

As part of the implementation of objectives to improve environmental impact forecasting and monitoring as well as planning for mine closures in 2021, Kazatomprom improved its environmental expertise. In addition, the Centre for Environmental Design and Monitoring completed the R&D work Study of the Environmental and Social Impacts of the In-situ Leach Mining Facilities on the Environment and the Local Population.

In the reporting period, subsidiaries and affiliates received decisions to determine the category of a facility with a negative environmental footprint in accordance with the requirements of the new Environmental Code of the Republic of Kazakhstan.

To introduce the best available technologies at Kazatomprom enterprises in 2021-2022, Ulba Metallurgical Plant JSC conducted a comprehensive technological audit of the enterprise. According to the opinion of the International Centre for Green Technologies and Investment Projects based on the results of a comprehensive technological audit: Ulba Metallurgical Plant JSC has implemented the best available techniques as to the implementation of technological processes and environmental protection. The recommendation is to include the indicators of the implementation of the main technological processes of UMP established during the audit in the National Reference Book of Best Available Technologies.

CERTIFICATION

All production facilities of the Group have the environmental management systems and energy management systems in place that are ISO 14001 and ISO 50001 certified.

An independent audit certified that Kazatomprom complies with the requirements of international standards ISO 14001:2015 (environmental management systems) and ISO 45001:2018 (occupational health and safety management) when organizing export deliveries of natural uranium compounds.

ENVIRONMENTAL PROTECTION TRAINING

To provide more effective environmental management and obtain the necessary competencies and knowledge about the Good International Industry Practice (GIIP), the Company organises regular training sessions for the heads of subsidiaries and affiliates and specialists responsible for subsoil protection, environmental and social issues.

HSE training programmes include:

• managing production and consumption waste at Kazatomprom companies
• implementing industrial environmental control (monitoring) at Kazatomprom companies
• assessing biodiversity in uranium deposits
• developing processes for the exchange of environmental information based on ISO 14063:2020. Internal audit (new version of the standard)
• certification course “Organising stakeholder engagement based on the AA1000SES standard”
• roadmap for the Environmental and Social Action Plan (ESAP) at Kazatomprom, key areas and its implementation

In 2021, 244 employees of the Group, in particular, the heads of subsidiaries and affiliates and specialists responsible for subsoil protection, environmental and social issues of different structural units attended the training sessions:

• methods of quantitative assessment of direct and indirect greenhouse gas emissions and calculation of carbon footprint of products
• environmental and social studies of the possible man-made impact of the Kazatomprom enterprises’ production activities on the environment and the population
• handling low radioactive waste (LRW) and ways to reduce the volume of LRW at Kazatomprom’s enterprises
• H&S audit of contractors providing services on the contract and production sites of Kazatomprom enterprises
• establishing the requirements for the Plan for liquidation (decommissioning) of nuclear facilities
• carrying out environmental communications at the enterprise: Stakeholder Engagement Plan for Kazatomprom subsidiaries and affiliates
• the Company held 16 training seminars/webinars that brought together 620 trainees from the central office, subsidiaries, and affiliates of Kazatomprom over the entire period of implementation of the 2018-2021 ESAP Plan

INVESTMENT IN ENVIRONMENTAL PROTECTION

The Group invests heavily in environmental actions. In 2021, Kazatomprom’s total cost of environmental protection measures amounted to KZT 964.6 million. In 2021, Kazatomprom paid KZT 187,6 million in emission taxes.

In 2021, the fines and economic sanctions for noncompliance with the requirements of environmental laws at the enterprises of the Group reached KZT 12.4 million in general. In the reporting period, Kazatomprom did not participate in the legal proceedings related to significant violations of environmental legislation.

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.

At the stage of selecting a supplier and concluding an agreement with a counterparty, Kazatomprom informs counterparties of the need to ensure compliance with the Company's environmental requirements. The Occupational H&S Department is also obliged to participate in the contract negotiation process to ensure that the necessary safety conditions and commitments are included in the respective contracts with contractors and suppliers.

The Occupational H&S Department, together with the occupational H&S services of subsidiaries and affiliates, control the operations of contractors directly on the ground by conducting the respective inspections and making reports, which provide the assessment of the contractors work, the number of inspections and detected violations.

EMISSIONS

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.

Kazatomprom seeks to reduce the negative impact of its production on air quality by introducing technological improvements, thereby contributing to the reduction of emissions of harmful substances. The Group is implementing a number of measures aimed at reducing emissions into the atmosphere and monitoring the air quality:

• monitoring of air quality
• using modern gas treatment systems, energy-saving technologies and photovoltaic stations, which reduce emissions
• using dust and gas catching collectors for dust cleaning and purification of process gases, coming from VGTP calcination furnaces. This facility eliminates the emission of radiation dust and minimises emissions to the environment by 20%

Overall, emissions at the Group’s enterprises reduced by 3.3% in 2021, from 1,907.57 tonnes in 2020 to 1,845.19 tonnes in 2021. The reduction in emissions is associated with environmental protection measures implemented by subsidiaries and affiliates under the the current emissions permits.

Changes in emissions, 2019-2021, tonnes

The Group's companies actively use solar energy to generate electricity, thereby reducing air emissions resulting from the consumption of traditional fuels such as fuel oil and coal. The reduction in CO₂ emissions amounted to about 3% of the total emissions.

The annual electricity output generated by the Group's solar photovoltaic plants is 3.34 MWh. The generated electricity is used for own needs, allowing annual savings of KZT 90 million. Excess electricity is supplied to local power grids for use by households and businesses in the regions where the Group operates.

WATER RESOURCES

Efficient management of water resources is an integral part of the Company's Policy for H&S, environmental protection, nuclear and radiation safety, which, among other things, contributes to improving interaction with local communities, the state, and investors. The company is committed to reducing water consumption and is making every effort to reduce water withdrawals and increase recycling. Kazatomprom regularly monitors and assesses the risks of water supply in all regions of its presence. In some regions of operation, the Company provides water supply to the local population and industry. Demineralised water is a raw material for generating electricity supplied to the external network for the needs of local communities.

When using water resources in production, the Company follows the UN Agenda for Sustainable Development 2030, including SDG 6, Ensure the availability and sustainable management of water and sanitation for all, and also operates in accordance with the Water Code of the Republic Kazakhstan (Article 66). The Company uses water in accordance with water resources protection permit documents. At the same time, the water supply of enterprises is divided into industrial, technical, and potable.

WATER CONSUMPTION AND WATER WITHDRAWAL

Water is withdrawn in line with the technological regulations for production sewage water, as well as requirements ensuring the supply of drinking water to the population. 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.

Enterprises providing centralised and non-centralised water supply for industrial and non-industrial needs, keep monitoring water withdrawal, conduct regular monitoring of the state of water withdrawal facilities, internal water supply systems, and water metering units.

The water facilities used by the Group's entities to withdraw water are not particularly vulnerable due to their size, role or status as a rare, endangered or critically endangered system. The Group's entities withdraw water in accordance with the permits and their withdrawal does not have a significant impact on water sources.

Requirements for water meters are established by the Water Code of the Republic of Kazakhstan, technical regulations, rules for the selection, installation and operation of water meters in water supply and sanitation systems.

In the reporting period, the water withdrawal structure did not change. Groundwater accounts for 84% of the total amount of withdrawn water. 0.06% of water is taken from surface sources, and we are witnessing a constant reduction in water intake from surface sources.

Water withdrawal from municipal and other water supply systems increased by 39.9%, from 1,131,100 m³ to 1,582,900 m³. The increase in water consumption was associated with an increase in uranium mining in 2021.

Kazatomprom endeavours to reduce the volume of water it uses in production. To this end, some of enterprises use closed water cycles. In 2021, the volume of recycled and reused water amounted to 50,384,000 m³, down by 0.59% against 2020.

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 industrial site and normatively clean water not used in the technological process. In addition, mine wastewater is discharged into a storage pond.

All discharges are treated and meet regulatory requirements of the quality of discharged water according to Kazakhstan Methodology for Emmission 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 2021, the wastewater discharged by Kazatomprom reached 4,823,000 m³, down by 7.9% compared to 2020.

Total wastewater discharge, m^{3 63}

In the reporting period, JV Inkai LLP carried out standardised procedures to clean sewage septic tanks. During the cleaning, 150 tonnes of sludge were removed. The works helped prevent exceeding the maximum permissible concentrations in waste water and excluded the excess of the content of pollutants in the outlets.

GROUND WATER

Uranium mining using the ISR method poses a risk of groundwater contamination. To ensure the safety of the population and minimize the environmental risk at all Kazatomprom mines in accordance with sanitary requirements, the design documentation substantiated the size of the buffer zone.

In 2021, the Company approved Methodological Guidelines for the Monitoring of the Impact on Ground and Underground Water in ISR Mining of Uranium, the implementation of the standard is scheduled for 2022. The standard is designed to establish uniform requirements for monitoring the state of natural waters in the areas where Kazatomprom’s uranium deposits are located during mining operatins using the ISR method.

WASTE MANAGEMENT

In their production operations, enterprises of Kazatomprom generate industrial and municipal waste. Safe waste management and disposal are priority objectives for the Company. If it is impossible to process waste, we ensure detoxication and environmentally safe disposal of waste or transfer waste to specialised organisations.

When handling waste, the Group is guided by the requirements of 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.

Corporate waste management standards:

• Rules of production and consumption waste management at Kazatomprom enterprises
• Methodological Guidelines for the Management of Radioactive Waste Prior to Landfill
• Methodology on calculating waste generation standards per unit of production at Kazatomprom’s enterprises

Key waste generated by the Company:

• solid and liquid radioactive waste
• overburden rocks generated during the mining of fluorite copper-molybdenum ores
• drilling mud from drilling at the ISR mining sites
• fluoric gypsum from the production of hydrofluoric acid
• ash and slag waste from the production of thermal energy
• household waste
• waste oil products
• car tyres

According to the approved Waste Management Programmes and Waste Management Action Plans, the Company take the following actions:

• ongoing monitoring of the placement (storage) of waste drilling mud in landfills for non-radioactive drilling mud
• regular and timely removal of production and consumption waste for disposal
• separate collection points and special places for temporary storage of production and consumption waste are arranged in the territory of the mines

The Company exercises mandatory control over the prevention of waste generation. All planned activities are carried out in accordance with the work plans, the results are properly recorded. No serious violations were identified during the reporting period.

As of the end of the reporting period, the total amount of accumulated waste made 1,016.6 tonnes, down by 10% compared to 2020. Industrial waste account for 87.9% of the total waste volume. In 2021, the total volume of industrial waste decreased by 10.3%.

The Company has adopted a separate waste collection system. Temporary storage of production and consumption waste on the territory of subsidiaries and affiliates is organised in specially designated places equipped for this purpose. Hazardous industrial waste is transferred for storage, processing and disposal to specialised enterprises. Passports have been developed for the entire list of hazardous wastes, which indicate the basic information about the waste: name, list of hazardous properties, composition, toxicity and precautions for waste handling.

Kazatomprom transports hazardous waste in accordance with the applicable law and exclusively with engagement of licensed organizations. In 2021, the Company did not carry out transboundary transportation of hazardous waste.

SOLID LOW RADIOACTIVE WASTE MANAGEMENT

In its operations, uranium mining enterprises generate only solid low-level radioactive waste.

Solid radioactive waste generated during mining is found in:

• radioactively contaminated soil in areas where industrial solutions are supplied through pipelines
• waste consisting of spent ion-exchange resins recovered from the production cycle
• radioactively contaminated liquid solution from collection tanks
• parts of equipment and metal structures taken out from production

The Group's mining enterprises dispose of solid radioactive waste in specially designated areas for disposal in accordance with the laws of Kazakhstan. Such types of solid radioactive waste are characterised as low-level and are the least hazardous solid radioactive waste in terms of radiation level.

BIODIVERSITY

Understanding the importance of preserving the biodiversity in the region of its presence, the Company makes efforts to study the state of flora and fauna in the territory of uranium deposits.

Under a contract made with Laboratory-Atmsofera LLP, the project assessing the impact of Ulba Metallurgical Plant JSC on cumulative pollution of air, water resources and/or ecosystems found that the fauna was represented by various animals, mainly rodents, and there were no large mammals or endangered animal species.

In 2021, LLC ROYAL assessed the impact made by the production operations of TTC-Shieli and Auto Service, branches of Trade and Transport Company LLP, on the environment and the local population. Following visual observations of the flora and fauna, the organisation found that there was no negative impact on the flora and fauna near the branches.

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 of Kazatomprom.

The total area of land owned, leased and managed by the Group is 51,923.55 hectares. There are no nature reserves or other specially protected natural sites on the territory of Kazatomprom's uranium deposits or near their borders.

The Company's activities do not pose a threat to animal and plant species listed in the Red Book of the International Union for the Conservation of Nature and Natural Resources (IUCN) and the Red Book of the Republic of Kazakhstan and endangered.

Kazatomprom carries out its activities on the industrial land and areas of settlements in accordance with the current legislation. The activities of the Group do not have a direct material impact on biodiversity.

As part of the implementation of ESAP Roadmap, the Company has the objective to determine the impact of mining activities on habitats, vegetation, and protected animal species.

Efforts taklen by the Company:

• providing analysis of the environmental footprint of the operations of the Karamurun, Kharasan-1 and Kulandy mines
• collecting and analysing the available background data
• conducting a sociological study of local residents to assess the environmental impact of deposits on the social environment
• organising an expedition to study vegetation, wild animals, and grazing areas
• determining the control points and background sites for ecological researches

As part of ESAP Biodiversity Roadmap implementation, Kazatomprom is implementing the Programme of Bird Protection from the impact of Kazatomprom power lines.

In 2021, Kazatomprom initiated the creation of a map showing habitats disturbed by mining operations. In order to more accurately determine habitats and identify sensitive ecosystems, biodiversity studies are carried out with account the seasonal migration of birds and mammals.

The Company has developed the Corporate Standard Methodological Guidelines for Assessing Biodiversity at Uranium Deposits, Production Facilities and Adjacent Territories and submitted it to subsidiaries and affiliates for implementation.

Kazatomprom regularly carries out activities aimed at restoring lands disturbed as a result of operation of mining enterprises. While developing the deposits, the Company carries out reclamation works to restore the landscape and vegetation and return the land into the economic use. As of the end of 2021, preparations were underway for liquidation and reclamation work in the contract areas of two deposits of Kazatomprom – Uvanas and South Moinkum (the southern part of block No. 1 (South) of the Moinkum deposit).

According to legal requirements, three years prior to termination of operations at the deposits, Kazatomprom should prepare draft liquidation plans, which include information on the fauna and flora of the site, the consequences of subsoil use, which are subject to liquidation, measures to rehabilitate flora and fauna, and plans for the reclamation of disturbed land.

Liquidation plans also include a set of works carried out after land reclamation:

• monitoring the condition of hydrobionts at the adjacent water facilities
• monitoring vegetation and microflora at the territory of plant and the adjacent areas
• monitoring animals at the territory of plant and the adjacent areas

In 2021, IHT LLP conducted works to isolate the impact directly related to the production operation of uranium mining enterprises from the general anthropogenic impact in the region with significant environmental problems associated with natural climatic conditions (soil salinity, poor quality of drinking water, arid climate); the ecological catastrophe caused by the drying up of the Aral Sea (salt dust storms, reduction of biodiversity, reduction of soil fertility). The purpose of the initiative was to develop measures to minimise the man-made impact, subject to environmental and social risks.

Following the results, the Company prepared a final report on the implementation of the Environmental and Social Action Plan (ESAP) of Kazatomprom for the period from 2019 to 2021.

In 2022, the Company will continue research to assess the environmental condition and biodiversity at the uranium deposits of Kazatomprom.

PLANS FOR 2022 AND A MEDIUM TERM

In 2022, Kazatomprom plans to implement a number of HSE measures:

• establish key performance indicators for the heads of subsidiaries and affiliates focused on the implementation of the ESAP Roadmap bullets
• continue training employees of subsidiaries and affiliates responsible for environmental protection, in particular: production and consumption waste management, biodiversity assessment at uranium mining deposits, environmental monitoring at enterprises
• conduct research to explore the impact of Kazatomprom’s operations on the environment and the local population (Environmental and Social Research Programme, ESRP) and the Zero Waste Programme of Kazatomprom, seeking to develop measures to reduce and minimise production and consumption waste generated at the enterprises of the uranium mining industry
• provide quantitative assessment of the carbon footprint of products, following the development of the Carbon Neutrality Programme
• continue the efforts of the internal group on planning the closure of production facilities and the decommissioning of the enterprises
• complete the development of the environmental performance rating of Kazatomprom
• implement the corporate standard Methodological Guidelines on Liquidation Cost Estimate Calculation and Procedures for Regular Analysis of Current Liquidation Costs (measurement of asset retirement obligations (ARO))
• implement the standard Methodological Guidelines for Monitoring of the Impact on Ground and Underground Water in ISR Mining of Uranium
• implement the standard Guidelines for Assessment of Biodiversity at Uranium Deposits, Production Facilities and Adjacent Territories
• conduct a second surveillance audit of the environmental management system (EMS), the health and safety management system (OHS&OHS) for compliance with the requirements of ISO 14001:2015 and ISO 45001:2018
• implement the criteria developed for compiling the environmental rating of Kazatomprom enterprises
• update the standards on radiation safety: ST NAC 12.1-2010 Procedures for the Admission of Staff of Kazatomprom enterprises for Performing Radiation-hazardous Works and ST NAC 19-2016 Procedures for Organising and Conducting a Radiation Survey of the Production Area Using the Gamma Ray Surveying
• continue efforts to create a database of the environmental monitoring system and the environment of uranium mining enterprises of Kazatomprom
• update the corporate standard Methodological Guidelines for Management of Radioactive Waste Prior to their Disposal

Moreover, the Group's specialists plan to take part in IAEA’s technical meetings, seminars and training sessions on safety, decommissioning of uranium production facilities, reclamation of uranium deposits, and uranium heritage sites.

Photography by Rinat Khaibulin

Stakeholder Engagement

Key indicators and achievements

KZT 0.03
billion

in retained economic value

UN Sustainable Development Goals

Kazatomprom sees its mission in 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:

• Kazatomprom Disclosure Policy approved by the Board Director on 19 November 2018
• Stakeholder Map approved by the Management Board on 18 March 2021

To meet the needs and expectations of its stakeholders, Kazatomprom has built effective communication channels.

In 2021, due to the COVID-19 pandemic, all meetings and events took place online using audio and video conferencing technologies to minimise the risk of coronavirus infection.

STAKEHOLDER DEFINITION

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.

Key stakeholders:

• shareholders
• partners
• creditors
• GWS suppliers
• consumers
• subsidiaries and affiliates
• management and personnel
• central government authorities
• local governments
• trade unions
• media
• civil-society organisations and local population
• business communities
• international organisations
• investment analysts
• social project development fund
• stock exchanges

The Company has developed a Stakeholder Map that takes into account the interests and needs of all stakeholders.

Realising the consequences of its operations, Kazatomprom engages with stakeholders in line with the following principles:

• materiality in assessing the issues they face
• providing an adequate response to stakeholders’ requests

The Stakeholder Map is annually updated to assess the mutual influence of Kazatomprom and its stakeholders, as well as the effectiveness of the stakeholder engagement plan. In 2021, the relevance of the map was confirmed by results of a management survey.

STAKEHOLDER ENGAGEMENT IN THE PREPARATIONS OF THE INTEGRATED ANNUAL REPORTS

To boost transparency and accountability of Kazatomprom, representatives of the key stakeholder groups are engaged in the preparations of the reports by participating in dialogues to discuss socially significant aspects of the Company's operations and disclosing this in the reports. Stakeholder engagement is an integral part of international standards: АА1000 Stakeholder Engagement Standard (2015), Sustainability Reporting Standards (GRI SRS), and International Framework for Integrated Reporting.

When preparing the IAR, the Company sends forms to be filled in by stakeholders:

• questioning about the level of disclosure of information about various aspects of the Company's operations in the integrated annual report for the previous reporting period
• surveying to determine the topics material for disclosure in the upcoming integrated annual report

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. Committees under Board of Directors provide preliminary consideration and elaboration of the most important matters reserved for the Board of Directors and develop recommendations for making decisions on these matters. The Board of Directors strives to successfully cope and quickly adapt to a constantly changing environment and comply with the most important principles of corporate governance.

CREATING ECONOMIC VALUE

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

Retained economic value amounted to KZT 220.03 billion in 2021.

Transparent Procurements

Key indicators and achievements

KZT 7.
billion

in total amount under the Procurements Plan

%

of local content in goods, works and services

UN Sustainable Development Goals

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 procurement contributes to the development of mutually beneficial partnerships, increases the efficiency of interaction with suppliers and contractors, as well as improves the efficiency, control and transparency of procurement activities within the supply chain.

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

• enhancing the transparency of processes via automation and digitalisation
• optimising the procurement management structure at the Company, subsidiaries and affiliates
• developing the category management in procurement

Procurement Department under the Managing Director for Procurement delivers procurement function within the Company. The department is taking efforts to maximize the business value in various forms: quality, timeliness, safety, productivity, risk reduction. To this end, Kazatomprom keeps expanding the professional competencies of the Procurement Department employees and applying new technological solutions.

The procurement activity of the company is regulated by the following key documents:

• The Procedures for procurement by the Samruk-Kazyna JSC National Welfare Fund and legal entities, which are 50-plus percent owned directly or indirectly by Samruk-Kazyna JSC on the basis of the right of ownership or trust management as amended and approved by the decision of the Board of Directors of Samruk-Kazyna JSC (Minutes No. 192 dd. 18 February 2022)⁶⁶
• Standard for managing the procurement activities of the National Welfare Fund "Samruk-Kazyna” and legal entities, which are 50-plus percent owned directly or indirectly by Samruk-Kazyna JSC on the basis of the right of ownership or trust management, as amended and approved by the decision of the Board of Directors of Samruk-Kazyna JSC (minutes No. 02/22 dd. 11 January 2022, minutes No. 12/22 dd. 18 February 2022)⁶⁷

SUMMARY OF KAZATOMPROM’S PROCUREMENTS IN 2021

The total procurement amount under the Procurement Plans for the Company’s Group amounted to KZT 227.64 billion. The company concluded contracts for KZT 212.02 billion in total. At the same time, the procurement plans have been implemented by 93.14%.

Single source procurements (SS) account for KZT 20.86 billion or 9.8% of the total amount of purchases.

KZT .
billion

TOTAL INTERCOMPANY PURCHASES
OR 31% OF THE TOTAL

Procurements made on the basis of an open tender (OT) and quotation requests (QR) account for KZT 84.3 billion or 39.76% of the total amount of purchases.

The share of local content in the group of companies of the Foundation is 80% against the plan of 77%. At the same time, the amount of executed contracts for the group of Kazatomprom’s enterprises for the goods under the Economy of Simple Things programme amounted to KZT 36.34 billion, or 87%.

To increase the share of competitive purchases, the Company conducts outreach with potential suppliers on the terms of registration and submission of tender documents, while eliminating excessive requirements for suppliers and reducing administrative costs that do not affect the production process.

PLANNED AND ACTUAL BENEFITS OF CATEGORY PROCUREMENTS (CATEGORY PROCUREMENT MANAGEMENT)

In 2021, the Company implemented 18 procurement category strategies in accordance with the Procurement Plan 2021: 7 procurement category strategies of Kazatomprom and 11 procurement category strategies of the Fund.

In 2021, the actual volume of category procurement strategies in the Group made KZT 23.5 billion.

The target indicators of benefits from the implementation of procurement category strategies for 2021 set by the Competence Centre of the Fund for Kazatomprom amounted to KZT 2.19 billion. However, following the adjustment of the target indicators of benefits of the Foundation's portfolio companies, the amount of benefits was reduced to KZT 1.23 billion.

KZT .
billion

ACHIEVED ACTUAL BENEFITS AGAINST A TARGET OF
KZT 1.23 BILLION, FOLLOWING THE IMPLEMENTATION OF THE
COMPANY'S AND THE FUND'S CATEGORICAL PROCUREMENT STRATEGIES

In 2021, because of the pandemic restrictions and logistics problems at the border with China, subsidiaries and affiliates of Kazatomprom faced problems with implementation of some category procurement strategies. This also refers to "HDPE and PVC pipes" procurement category strategies, where force majeure circumstances arose as a result of shortage in the main raw materials in the territory of the Republic of Kazakhstan. Almost 36% of major batches of pipes were not delivered to the mining enterprises of Kazatomprom. The above factors had a significant impact on the results of Kazatomprom category procurements.

To increase the share of competitive purchases, Kazatomprom conducts outreach with potential suppliers to clarify the terms and conditions of tender documents, eliminates excessive requirements for suppliers and administrative costs that do not affect the production process. Planned single-source procurements are transferred to tender procedures.

DIGITALISATION OF PROCUREMENT

In 2021, the Company continued to implement its procurement plans fully in the SAP ERP system. This functionality enables the quick consolidation of the planned procurements, taking into account the goods in transit and in stock.

The procurement plans for 2022 have also been made in the SAP ERP system. Work is currently underway on the direct automated integration of the SAP ERP system and the e-procurement information system 2.0 where procurement plans will be developed, adjusted, and approved. The expected delivery term is July 2022.

SUPPORT OF LOCAL SUPPLIERS

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

In 2021, the Group continued controlling the procurements of goods produced by domestic producers in the light industry as well as furniture, and food industries and the production of construction materials from manufacturers listed on the Samruk-Kazyna’s Register.

As part of the Economy of Simple Things Programme in six sectors of economy (consumer goods, furniture, food, construction, machine building, and chemicals), products and goods are purchased from the manufacturers of the Holding.

The local content in the EST procurements accounted for 87% of the total procurements in accordance with the established indicators in procurement.

KZT .
billion

WAS THE TOTAL AMOUNT OF THE 27 OFFER CONTRACTS
CONCLUDED UNDER THE NEW PRODUCTION FACILITATION
PROGRAMME DURING 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 offtake contracts with producers. In addition, works are underway to search for new domestic producers adapted to the needs of the industry.

In 2021, local content in goods, works and services reached 80% against the target of 77%, compared to 75% year on year.

PLANS FOR 2022 AND A SHORT TERM

• the Company plans to continue optimizing procurement processes and developing automation of procurement processes
• as part of the implementation of SAP as the Group's ERP system, Kazatomprom will also continue to implement initiatives for proper separation of duties and access control

Science and Innovations

Key indicators and achievements

KZT .
billion

under 57 R&D contracts in total

applications

filed for intellectual property

,
innovation proposals

were submitted by the Group's
employees, of which 2,020
were accepted and 1,367 were
implemented

UN Sustainable Development Goals

MANAGING R&D AND INNOVATIONS

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

For more information about Kazatomprom’s Innovative and Technological Development Strategy and Policy 2014-2022, as well as the R&D Management Policy, see Kazatomprom Integrated Annual Report 2019.

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 Kazakhstani uranium products:

• Volkovgeologia JSC: geology, geotechnology and mining and preparation operations, repair and restoration works of wells and associated extraction of rare metals and rare earth metals at uranium deposits
• High Technology Institute LLP: extraction and processing of productive solutions, associated extraction of rare-earth metals
• Ulba Metallurgical Plant JSC: advanced technologies of the nuclear fuel cycle (NFC), production and processing of rare metals (RM) and rare-earth metals (REM)
• NAC Kazatomprom JSC: digitalisation, automation and robotisation. Commercialisation of intellectual property objects and technology transfer

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

In 2021, the Company held one event where subsidiaries and affiliates of Kazatomprom presented their implemented R&D projects. Such events seek to improve the coordination of scientific activities and the implementation of the R&D at production facilities.

Results in 2021

• ten meetings of Scientific and Technical Councils and eight meetings of Specialized Scientific and Technical Councils were held to discuss priority R&D areas of the Group
• the Company developed rules to evaluate its R&D efficiency
• we developed Regulation on the “I Have an Idea” Idea Management System at Kazatomprom
• Kazatomprom revised Regulations on Scientific and Technical Council
• memoranda on cooperation on R&D and innovations were signed with:
  • National Centre for Technological Projections
  • Park of Innovative Technologies operating under the brand name of Tech Garden
  • Bekturov Institute of Chemical Sciences
• the Company adopted procedures for enrolment in specialised universities of the Russian Federation in PhD and postgraduate programmes as part of its efforts to train the R&D staff pool at Kazatomprom, subsidiaries and affiliates

KZT .
billion

A TOTAL OF 57 R&D CONTRACTS CONCLUDED BY KAZATOMPROM AND ITS SUBSIDIARIES AND AFFILIATES IN 2021, OF WHICH 53 CONTRACTS WERE SIGNED BY SUBSIDIARIES AND AFFILIATES (KZT 2.92 BILLION) AND 4 CONTRACTS BY KAZATOMPROM (KZT 0.32 BILLION). IN 2021, THE COMPANY UTILISED KZT 2.45 BILLION, INCLUDING KZT 0.35 BILLION UNDER KAZATOMPROM CONTRACTS AND KZT 2.09 BILLION UNDER THE CONTRACTS OF SUBSIDIARIES AND AFFILIATES.

employees

ARE ENGAGED IN RESEARCH AND DEVELOPMENT AT VOLKOVGEOLOGY JSC, INSTITUTE OF HIGH TECHNOLOGIES LLP, AND ULBA METALLURGICAL PLANT JSC, INCLUDING 7 DOCTORS OF SCIENCES AND 48 CANDIDATES OF SCIENCES.

To commercialise the R&D results, four contracts were signed in 2021 to grant the right to use the inventions of Kazatomprom:

• Recovery of natural uranium concentrate from uranium-bearing solutions between Kazatomprom and JV Southern Mining and Chemical Company LLP
• Recovery of natural uranium concentrate from uranium-bearing solutions between Kazatomprom and Karatau LLP
• Recovery of a chemical concentrate of natural uranium from rich eluate between Kazatomprom and Semizbay-U LLP
• The copyright for the software package for studying uranium mining by the in-situ recovery and obtaining the Simulator v. 3.0 between Kazatomprom and ME ORTALYK LLP

applications

THE COMPANY FILED FOR INTELLECTUAL
PROPERTY AND RECEIVED 15 PROTECTIVE
DOCUMENTS

In addition, work and negotiations are ongoing to conclude license agreements between Kazatomprom and its subsidiaries and affiliates (JV ZARECHNOYE JSC, ME ORTALYK LLP) on granting the right to use the invention “Method for obtaining a chemical concentrate of natural uranium from rich eluate”.

SCIENTIFIC DEVELOPMENTS

Almost all R&D projects of the Group seek to improve and upgrade production. Several major R&D projects were implemented in 2021:

In 2021, a software prototype was developed in the Microsoft Excel environment using VBA and PowerMap. The Base prototype allows to carry out the identification of samples of finished products of uranium mining and uranium processing enterprises and to generate a report on the results of identification. An archive of GP samples has been created, allowing, if necessary, to carry out an operational procedure for identifying the material and its belonging to a particular manufacturer.

One of the significant areas of work for scientific research is environmental. In 2021, several studies were conducted to improve the environmental friendliness of production:

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 2021:

• the Group's employees submitted 2,277 innovation proposals, of which 2,020 were accepted and 1,367 were implemented. KZT 1.34 billion is the expected economic effect of the implemented proposals
• the contest of innovations was held with two new nominations:
  • The best innovation proposal within the framework of the GreenMindset – Green Thinking initiative: innovation proposals are selected that have a cumulative effect: economic, social and reputation’
  • The best digital solution for production: innovation proposals are selected that have a great economic effect from reducing the cost of production or improve the quality of production

PLANS FOR 2022 AND A SHORT TERM:

Pursuing a new approach to R&D management, the Group will take the following actions in 2022:

• updating the internal regulatory documents to raise 1% of funds from subsoil users for science
• revising the composition of scientific and technical councils
• continuing coordination of the implementation of R&D results through a platform for presentation of completed research projects

In addition, we are set to launch “I have an Idea” Idea Management System.

In addition, Kazatomprom will work to improve the scientific 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.