2020 Sustainability Report Summary

Sustainability REPORT 2020

An achievement

of all

Target 12.6 The 2020 Sustainability Report has been prepared in strict compliance with the established management indicators and approaches, in accordance with the Essential option of the GRI Standards and their respective principles of content and quality. All of the above is ensured by the external verification by the firm BSD Consulting, an Elevate Company.

In addition, the “GRI Materiality Disclosure Service” was requested to check that the GRI content index is clearly presented and the references for content 102-40 to 102-49 are aligned with the sections made in the body of the report.

In a year in which we have all faced the personal, family and professional challenge of remaining optimistic and overcoming adversity with discipline, self-care, solidarity and creativity, Drummond Ltd. presents this exercise in transparency and accountability about the impacts, risks and opportunities from its work.

José Miguel Linares President of Drummond Ltd.

AS IT HAS DONE FOR THE MORE THAN 30 YEARS THAT IT HAS BEEN IN THE COUNTRY, DRUMMOND LTD. WILL CONTINUE CREATING VALUE FOR COLOMBIA THROUGH MINING THAT IS ECONOMICALLY VIABLE, ENVIRONMENTALLY SUSTAINABLE AND SOCIALLY RESPONSIBLE.

DRUMMOND LTD. IS A COMPANY ENGAGED IN MINING STEAM COAL IN COLOMBIA, WITH ITS HEADQUARTERS IN BOGOTÁ AND OPERATIONS IN THE DEPARTMENTS OF CESAR AND MAGDALENA. The Drummond Ltd. includes the activities of:

T R A N S P ORTAT I ON

E XPLORAT ION PROD UCT ION

EX P ORT I N G

6.5 % Europe

31.6 %

11.5 %

Eurasia

North America

19.7 % Asia & The Pacific

20.7 % South & Central America

2020 EXPORT DESTINATIONS

10.1 % Middle East & Africa

Figures from 2020 In this summary of the Sustainability Report, you will find relevant data from Drummond Ltd.’s performance in 2020: TOTAL ASSETS

INCOME FROM EXPORTS

SALES AND OPERATING COSTS

US$ 2,289

US$ 1,497

US$ 1,503

MILLION

MILLION

MILLION

TOTAL LIABILITIES

TOTAL EQUITY

US$ 641

US$ 1,648

MILLION

MILLION

29.7

MILLION Metric tons of coal exported.

30.4 %

71 %

of the GDP of the Department of Cesar corresponds to the mining industry.

of the country’s coal production comes from the Department of Cesar.

59 %

of the country’s coal production is provided by Drummond Ltd.

Since the beginning of operations in Colombia, Drummond Ltd. has produced 502.3 million tons, which have represented payments to the nation for:

Taxes, fees and contributions

Royalties and compensation

US$ 3,137

US$ 4,458

MILLION

MILLION

5.th

Consecutive year as the company with the largest volume of coal production and exports in Colombia.

1.st

Place in the categories of best reputation in mining and non-mining municipalities.

2.nd

Place in general reputation in the Colombian mining industry.

Sustainability vision

Drummond Ltd.’s strategic vision is to “increase and share the benefits of our commercial operations with the stakeholders in our areas of influence through building and strengthening of local capacities,” based on its pillars of Corporate Social Responsibility:

PEAC E A ND HU M A N RIGHTS

EN V I R O N MEN TAL P ER FO R MAN C E

Strengthen capacities among stakeholders to build a peaceful, fair and responsible society that also promotes respect for human rights

Strengthen the business capabilities that ensure world-class environmental performance

COM PRE H ENSIVE D E V ELOPMENT

G OV ER N AN C E FO R DEV ELO P MEN T

Strengthen local capacities for the well-being and prosperity of employees and their families and the communities in the area of influence

Strengthen local capacities for greater efficiency in public planning and management

16

17

2

15 4

DRUMMOND LTD.’S CONTRIBUTIONS TO ACHIEVING THE SUSTAINABLE DEVELOPMENT TARGETS:

6

12 11 9

8

Peace and human rights Targets 8.7 16.2 16.5

Targets 16.1 16.5

Target 16.10

Target 16.6

1,237 0

100 %

Cases of discrimination, child labor, forced labor or human rights violations.

of the Human Rights Risk Matrix and management mechanisms updated.

Employees trained on policies, procedures and aspects related to human rights.

84 % of all significant investments contracts and agreements signed

by Drummond Ltd. have human rights clauses.

Governance for development

• Human Rights and Coal Working Group

Of security personnel trained on human rights.

• Trust in Cesar CREER

Reporting

75 %

100 %

Of contractors (65 companies) participated in the 6th Drummond/Contractor dialogue on human rights in 2020.

Of the information to prepare the EITI Colombia report.

Environmental performance Targets 15.1 15.2

Own target

50 %

101 ha

conversion of light vehicles to NGV, reducing GHG emissions.

That were affected by the operations were recovered at the Pribbenow and El Descanso mines.

Target 9.1

Million invested in institutional and community infrastructure projects.

• Mining and Energy Committee

100 %

US$

1,188,117

Participation in multiactor skill-building initiatives that promote good human rights practices:

Replacement of the use of diesel with biodiesel in light vehicles, with the goal of contributing to mitigating the effects of climate change.

Execution of the Forestry Compensation Program at the Pribbenow mine began on at least

1,000 ha

of the sub-basin of the San Antonio creek.

Target 16.6

70

Civil servants and community leaders trained on project planning, management and evaluation.

9.83 %

1,346 ha

Reduction in the generation of emissions from scopes 1 and 2 at the mining and port operations, compared to 2019.

Of the Pribbenow and El Descanso projects have been covered by the area recovery protocol; almost 16 % of the total surface area affected by the progress of the mining operations.

Comprehensive WITH AN INVESTMENT OF +US$ 3,742,585 MILLION development WE EXECUTED OUR 2020 SOCIAL MANAGEMENT PLAN. 100 % EXECUTION OF THE ANNUAL SOCIAL INVESTMENT PLAN. COMMUNITIES: Targets 8.3-2.a 2.3-2.4

Target 4.6

Target 4.3

167

1,000

106

299

100 %

Young people received college scholarships and living stipends.

Fewer illiterate adults in the five municipalities in the area of influence in the department of Cesar.

Local producers added to the supply program with US$ 85,066 in revenues by the end of 2020.

Production units prioritized in the entrepreneurship incubators.

Of the construction and launch of the Center for Social Entrepreneurship (SCE Boquerón).

65 Women participating in rural family economic projects.

EMPLOYEES AND OPERATIONS: Target 8.5

Targets 8.8

5,039

99.1 %

117

165,547

10,204

Direct jobs generated.

Of direct employees benefitted under the extralegal compensation and benefits system.

Employees benefitted from college scholarships.

Hours of training and education given for employee development.

Hours of training and education in virtual mode – 1,691 workers participated.

42 % Reduction in the accident rate.

Certification under the ISO 45001:2018 standard in Occupational Health and Safety Management Systems.

SUPPLIERS AND CONTRACTORS: Target 8.3

Target 8.5

Target 8.6

33 %

698

5,535

23 %

65

Of domestic purchases came from suppliers from the Caribbean region.

Domestic suppliers (93 %); value of purchases US$ 669,252,528 (70 %). Of these, 289 were local suppliers; value of purchases US$ 221,416,314.

Indirect jobs created.

Increase in hiring personnel from the area of influence.

Young people from the region completed the training program on mining maintenance topics with contractors and the SENA.

92.41 % Of contractors’ employees are from the Caribbean region.

It works to:

We do more

Support the provision of highquality healthcare services for its communities and employees.

#FOROURPEOPLE

IN THE MIDST OF GREAT CHALLENGES, SUCH AS THE CRISIS GENERATED BY COVID-19, DRUMMOND LTD. SHOWS THAT IT GOES BEYOND MINING AND THAT IT IS A COMPANY COMMITTED TO THE WELLBEING OF ITS STAKEHOLDERS. Targets 8.3 - 2.8 2.3 - 2.4 US$

Provide humanitarian aid.

Promote quality education and facilitate the safe return to schools.

During 2020 the Company invested:

+US$ 1,817,661

MILLION To respond to the health emergency in its area of influence, in partnership and coordination with the municipal authorities, community and religious leaders and the community at large.

Own target

Target 4.a

Target 9.1

US$

Reactivate and maintain the local and national economy.

US$

US$

493,131

671,211

225,741

427,578

On income-producing projects to reactivate the local and national economy.

In humanitarian aid and medical and biosafety supplies.

For construction, updates and equipment for healthcare institutions (health centers and hospitals) to support and facilitate care during the health crisis.

In educational infrastructure, to facilitate the safe return to in-person learning under an alternating model.

Target 8.5

[Humanitarian aid]

26,970

1,722

192,332

+2

Boxes of groceries delivered by Drummond Ltd., in partnership with the Colombian Food Bank Association – ABACO.

Boxes of groceries donated by employees and contractors.

Units of medical supplies delivered.

Thousand liters of drinking water provided to the nearby communities.

Ensure the implementaDURING THE tion of strict health proCRISIS IT WAS ABLE TO: tocols to protect workers, contractors and their families, adjusting all of the Company’s health programs related to the pandemic.

Coordinate and maintain interaction with all stakeholders in the area, relying on them for support for organized, well-communicated and approved execution of tasks with respectful relationships that support the Company’s management in the region and made its operations feasible.

Drummond Ltd. maintained 100 % of its direct employees, with all of their extra-legal and collective bargaining benefits. It did not suspend any employment agreements, in spite of the difficult conditions caused by COVID-19 and the crisis in the international coal market.

Train medical and paramedical staff from all locations on biosafety, as well as employees and contractors.

Cover 100 % of the at-risk population with defined prevention activities for all employees and contractors.

Meet 100 % of the goals and objectives of the COVID management program, as well as the legal requirements and standards established by the WHO.

Communicate the biosecurity actions taken at the Company, and those required by the National Government, in coordination with the Secretaries of Health of Cesar and Magdalena, and those of the municipalities in the area of influence clearly, broadly and in a timely manner, to promote self-care and ensure compliance with the protocols and measures.

Maintain the proper functioning of the Company, in spite of the impacts of the pandemic, preserving productivity.

Target 17.17

Major challenges can only be met with combined efforts, strategic partnerships, synergies and the will of each actor to contribute more. During 2020, to address actions related to the health emergency, Drummond Ltd. was able to rely on the following partners:

Municipal and departmental administrations

Public schools in the municipalities in the area of influence

Community Action Boards and community associations

Employees, contractors and suppliers

Producing associations from the communities

The Colombian National Army

Civil organizations

Drummond Ltd. will continue to be a change agent and strategic partner in the region, leading processes in response to the socio-economic transition and a future beyond its mining activities. To do so, it will take any actions necessary to address the challenges posed by this crisis, and its prioritized investments will be vital for the sustainability and viability of the business.

STAKEHOLDER ATTENTION SYSTEM

Committed to having a positive impact!

Drummond Ltd. has various channels of communication available to all employees and other stakeholders, through which they can submit their requests, complaints, claims, suggestions, congratulations and reports, as

well as report possible bribery or corruption, violations of ethical and corporate commitments or questions about the application of the Business Ethics Program.

• denuncias@drummondltd.com

• Website: https://www.drummondltd.com/

• Reports to mailing address: Calle 72 No. 10-07, Suite 1302, Bogotá, D. C. • Ethics Line: 018000919161 – Direct line 57 (5) 5719499, Internal extension 8499 • Email: atencionalusuario@drummondltd.com atencionalusuariop@drummondltd.com

• Online portal for citizen services: https://drummond.boreal-is.com/portal/drummond • Community Service Offices

Follow us on social media: @DrummondLtdCo

@drummondltdco

Drummond Ltd. Colombia

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Drummond Ltd.