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									Understand, Believe, Engage.

IOC 2007
Partners of IOC, Scouts clean grounds of Sept-Îles’ Cegep in preparation for Quebec Games.
04 Our Business
06 Message from the President & CEO
07 2007 Highlights
08 Our Approach to Sustainable
   Development & Governance
10 Social
34 Environment
44 Economic
52 Contact Us
                                            The largest manufacturer of iron                        Operating 24 hours a day, 365 days a year, IOC’s mine,
Iron Ore Company of Canada
                             Our Business                                                           concentrator and pellet plant are located in Labrador City.
                                            ore pellets in Canada and one of the                    From there, the QNS&L railway transfers finished products
                                            world’s leading suppliers of iron ore                   to IOC’s deep-water seaport in Sept-Îles where over
                                                                                                    250 vessels are handled each year.
                                            pellets and concentrate, IOC employs
                                            over 2,000 people and has a customer                    IOC is owned by Rio Tinto (58.7%), Mitsubishi Corporation
                                                                                                    (26.2%) and the Labrador Iron Ore Royalty Income Fund (15.1%).
                                            base that spans the globe including
                                            North American, European and Asian
                                            steel producers.
                                                                                                     IOC shareholders

                                                                                    Labrador City


                                             IOC locations                                                Rio Tinto 58.72%
                                                                         Montreal                         Mitsubishi Corporation 26.18%
                                              Head office                                                 LIORIF 15.10%

                                                                                                        Europe/Middle East   Asia/Pacific
                                                                                                        29%                         30%
                                                         North America

                                             IOC customer locations

Rio Tinto is one of the world’s leading

                                                                                                                                        Rio Tinto Iron Ore
                                                                                                                                                             Our Business
mining and exploration companies,
finding, mining and processing the
earth’s mineral resources – metals
and minerals essential for making
thousands of everyday products that
meet society’s needs and contribute
to improved living standards.
Rio Tinto’s activities span the world with production from
every continent. Its products include aluminium, copper,
diamonds, energy products, gold, industrial minerals
and iron ore.

                                                                           Pre-vehicle inspection, Pilbara operations. Photo courtesy
                                                                           of Rio Tinto Iron Ore.

 Rio Tinto corporate structure
                                                               Rio Tinto Group

                       Copper   Aluminium      Exploration     Iron Ore   Technology       Energy      Industrial    Diamonds

           Iron Ore         Expansion       Hamersley     HIsmelt    Robe River   Pilbara Iron   Simandou        Orissa       Corumba
           Company          Projects        Iron                     Iron
           of Canada                                                 Associates

                            Labrador City



                                                 Corumbá                                                      Pilbara
  Rio Tinto iron ore

 Message from the President & CEO

                                    Dear Stakeholders,                              The key driver in this approach to business is our people.
                                                                                    Whenever I visit with them throughout IOC, I see their
                                                                                    impressive efforts, their dedication to safety and their ability
                                    Understand, Believe, Engage, these are          to work with each other to push towards common goals. I am
                                                                                    always impressed by our collective ability to find ingenious
                                    the key themes of our 2007 Sustainable          ways to overcome our challenges and to continuously
                                    Development (SD) Report. They explain the       improve. As I look back over 2007, I am proud of what we
                                                                                    accomplished together. We tried some new approaches,
                                    sustainable vision that we use to guide us in   we made some mistakes, we learned together and then
                                    everything that we do. When we understand       we pushed on toward that vision of long-term sustainability
                                                                                    for everyone our business touches.
                                    how the business impacts our environment
                                    and others around us, and we believe that       This vision involves us all and we, as a group and a
                                                                                    community, must share and learn to become more SD
                                    we can all make a real difference, then we      oriented in all of our activities. Some of our day-to-day
                                    can engage ourselves and others to achieve      steps are small, some are great leaps and occasionally we
                                                                                    falter. Overall, I believe it’s our values that help us to be a
                                    our goals in a way that is responsible for      better business. It takes more than just being aware at the
                                    the generations to come.                        workplace to create a solid future. When we leave our work
                                                                                    behind and go home to our families and our communities,
                                                                                    we must continue this awareness and make it a part of our
                                                                                    way of thinking, our way of being.

                                                                                    IOC faced some challenges in 2007 and has evolved from
                                                                                    lessons learned. We started the year with a ten-week strike.
                                                                                    It hurt us in many ways, but we struggled and found
                                                                                    common ground then returned to set production and safety
                                                                                    records, even win safety awards, while adding many new
                                                                                    people to our team. The 2007 five-year collective agreement
                                                                                    – only the second in our history – has given us an even better
                                                                                    today and tomorrow, with a secure future ahead.

                                                                                    With the stage set, our shareholders approved our plans
                                                                                    for a $60 million expansion. This commitment will enable
                                                                                    us to evaluate ways to expand our production in response
                                                                                    to the increasingly competitive marketplace by addressing
                                                                                    operating bottlenecks and improving winter performance
                                                                                    while still offering our clients the best in iron ore products.

Terence F. Bowles, President & CEO of IOC,
addresses employees during the 2007 President’s Tour.

And as we move ahead together on this exciting road,
we will continue to Understand our environmental and        2007 Highlights
community responsibilities, Believe in achieving the best
through sustainable practices, and Engage ourselves and
each other to be responsible for the generations to come.
                                                            Five-year collective
Thank you for reading our 2007 Sustainable Development
Report. It has been prepared in accordance with the         agreement
principles of “Towards Sustainable Mining” (TSM) as         for a secure today and tomorrow.
defined by the Mining Association of Canada. We believe
it is a balanced presentation of our Company’s economic,

environmental and social performance. Your comments,
suggestions and ideas will be very much appreciated.

Sincerely,                                                  best safety year ever
                                                            employee awareness gets sharper everyday.

Terence F. Bowles
President & CEO
Iron Ore Company of Canada                                  291 new employees
                                                            setting the stage for expansion.

                                                            Advisory Panels
                                                            working together on Labrador West
                                                            and Sept-Îles issues.

                                                            of tailings project
                                                            Wabush Lake to be crystal clear again.

 Our Approach to Sustainable Development & Governance   Understanding the big picture,
                                                                                                           Our governance structure and management system
                                                        that is IOC’s commitment to sustainable
                                                                                                           The Way We Work
                                                        development; it’s about a better quality
                                                        of life – economically, socially and               supplierregistration/34_the_way_we_work.asp
                                                        environmentally – for all of us here in the        We adhere to the Rio Tinto guide The Way We
                                                                                                           Work, promoting SD principles and providing
                                                        communities in which we operate and in             guidelines covering workplace behaviour, including
                                                        society at large. It’s about getting behind        discrimination and ethical issues. Its principles
                                                                                                           apply equally to employees and contractors.
                                                        that belief, that vision, one hundred              Managers and supervisors are held accountable
                                                        percent of the time. By working with all           for their own actions and those of their team.
                                                        our stakeholders, we aim to be the leading         Environmental Management System (EMS)
                                                        contributor to sustainable development.            and ISO 14001
                                                                                                           IOC acquired certification of EMS to ISO 14001:
                                                                                                           2004 in December 2005 for our operations in
                                                        And it’s not only the right thing to do, it also   Labrador City and in May 2006 for our operations
                                                                                                           in Sept-Îles, and has successfully retained
                                                        makes great business sense. This integrated        certifications since then. We are now in the process
                                                        long-term approach will make our company           of integrating health, safety, environment and
                                                                                                           quality (HSEQ) in a single management system.
                                                        more competitive, extra resilient to
                                                        shocks, agile in a fast-paced world, more          Toward Sustainable Mining (TSM) initiative –
                                                                                                           Mining Association of Canada
                                                        likely to attract and keep customers and           www.mining.ca
                                                        the brightest employees, and in a better           A member of the Mining Association of Canada,
                                                        position with regards to regulators, banks,        IOC is committed to the TSM guiding principles.
                                                                                                           These principles are backed by specific performance
                                                        insurers, and financial markets. It will help      indicators, which companies report against
                                                        us to build positive relationships with the        each year. Showing what the industry’s current
                                                                                                           performance is and how it can be improved,
                                                        communities and our stakeholders in order          performance indicators have been developed
                                                        to add real value to society.                      for tailings management, energy management,
                                                                                                           external outreach and crisis communications
                                                                                                           management. Under development are performance
                                                        Our commitment to SD is reflected in               elements for aboriginal relations and biodiversity.

                                                        the way we work everyday. We’re always             Business and financial controls
                                                                                                           To protect shareholders’ interests, corporate
                                                        pushing forward, seeking out new ways              governance requirements have increased over
                                                        to raise the bar in our Health, Safety,            the last few years. Every year, IOC completes an
                                                                                                           internal control self-assessment that covers things
                                                        Environment and Community (HSEC)                   like financial controls risks and Rio Tinto guidelines
                                                        performance, in line with the requirements         compliance. With an internal system that includes
                                                                                                           appropriate authorization levels, upgraded controls
                                                        of Rio Tinto corporate standards.                  documentation and auditing, and a whistle-blower
                                                                                                           program, we can minimize the risk of financial
                                                                                                           misstatements. We’ve also created a committee
                                                                                                           to identify and monitor compliance risks. As part
                                                                                                           of the Sarbanes-Oxley project, we described
                                                                                                           and tested critical financial controls to comply
                                                                                                           with the Securities Exchange Commission (SEC)
                                                                                                           requirements. This process was then audited by
                                                                                                           our external auditors. A program of internal audits
                                                                                                           is completed yearly, and each internal audit finding
                                                                                                           is monitored by management and IOC’s Audit

                                                                               Participants race in annual Iron City Duathlon.

                                                        Over the past two years, our focus has been on changing
                                                        the way we do business, on making sustainable development
                                                        an integral part of our decisions. We rolled out a training
                                                        session on SD for all our managing staff and implemented
                                                        SD decision making criteria for capital projects. This process
                                                        will continue as we review and refine our policies, procedures
                                                        and performance in search of continuous improvement. As
                                                        we move forward, we expect our operations to incorporate
                                                        SD in every aspect of the business.

                            The IOC Way Forward
To secure our future together as a successful supplier of iron ore products to the global steel industry
                                                                                                             Financial Strength
      Health & Safety

                                                            & Market Focus
                                        & Communities


     Respect and consideration to all – Excellence in health and safety – Focus on Performance
Effective teamwork and leadership – Employer of choice – Socially and Environmentally Responsible


         Make the Difference

         Exchanging safety ideas
         at Mine Maintenance Facilities (MMF).
                                                                      We then had to go from a strike right back to work, to normal

                                                                      activities. It was a very successful and safe return. Everyone
                                                                      worked hard to bring things back to normal.
                                    Tim Butler
                                    Vice-President, Human Resources
                                    & Organizational Effectiveness
                                                                       Training/education initiatives
                                    Iron Ore Company of Canada         The Working Relations Committee – Communicate
                                                                       collective agreement effectively.
What does Sustainable Development mean
                                                                       The Training Committee – Identify and prioritize
for people? In our communities, it’s stronger                          technical training needs.
partnerships with a shared vision of the                               Management Union Committee – Discuss global
                                                                       issues (all areas), policies, etc.
future. Internally, it’s training, career
                                                                       SD Leadership Training – Learn to integrate SD into
development and providing opportunities                                workplace.
that help employees grow alongside IOC. It’s
about employees feeling good about coming                             Looking to the future, the reality starts to get clearer: With a
                                                                      firm commitment established comes a renewed sense of the
to work and feeling valued and respected.                             future. Our majority shareholder, Rio Tinto, feels the same
                                                                      way – they approved our plans for a $60 million study phase
It means making employee wellness and health & safety                 of a major expansion program. So, the five-year agreement
a priority across the company and in our lives, each and              really defined 2007 and the upcoming five years in fact. It
every day. SD is a broad view that includes all facets of a           gave a new face to everything we do and breathed new life
community – social, environmental and economic.                       into our activities.

In April of 2007, a new agreement was signed with United
Steelworkers Negotiating Committees in both locations.
It was a major milestone for IOC and for me. Since I’ve
been here at IOC, this was the biggest challenge in terms
of employee relations, and successfully redefining labour
relations and union management relationships from
adversarial to cooperative is the most concrete example
of sustainable development.

New agreement was signed with United Steelworkers Negotiating         New agreement was signed with United Steelworkers Negotiating
Committees in Sept-Îles.                                              Committees in Labrador City.

Social   It’s not just about work though. We know
                                                                           2007 health & safety
         that we’re all part of the community with
                                                                            Lost Time Injuries
         families and friends and those lives need                          (LTI)                                                        7
         to be supported by strong initiatives.                             Lost Time Injury Frequency                            0.29
                                                                            Rate (LTIFR)                                (Target = 0.50)
                                                                            Medical Treatment Cases
          Initiatives – health & safety                                     (MTC)                                                       25
          IOC and Labrador City invited the founders of the                 All Injuries
          Crystal Meth Victoria Society to teach about the                  (AI = LTI + MTC)                                            32
          drug Crystal Meth-Methamphetamine – the effects,                  All Injury Frequency Rate                             1.35
          addiction rates, prevention and intervention. We                  (AIFR)                                      (Target = 1.49)
          reached over one thousand children and parents.
                                                                            Significant Incidents
          Emergency Response team mock drill – worked                       (SI)                                                        39
          with grade seven students to teach evacuation
                                                                          We’ll continue to examine all avenues available to us to
          Security team and the local fire department
                                                                          improve our safety performance. The cultural change that
          teamed up to assist MADD (Mothers Against Drunk
                                                                          needs to take place to move our safety performance to the
          Driving) with a mock disaster to educate high
                                                                          next level means that everyone has to be involved on a
          school students on the dangers of drunk driving.
                                                                          consistent basis. Employees are engaged in IOC programs
                                                                          like Safety Interactions that focus on behavior, Take-5 for
                                                                          risk assessment and mitigation, HAI (hazard, accident and
          Initiatives – community                                         incident) reviews to learn from experience, and PGIs (planned
                                                                          general inspections) and weekly tours to focus on conditions.
          Major sponsor of the 43rd annual Quebec Games
          in Sept-Îles. Over 4,000 youth participated,
          IOC donated over $85,000 in funding and other                                           Leadership
          donations, 30 employees donated their time
          and volunteered in support of the Games.
          Every year, IOC hosts Family Day for all employees,
          their families and local retirees. Over 2,500 people                             t
          attended in Labrador City (dog sled rides, snowshoe

          races and snowmobile rides) and 380 people


          participated in Sept-Îles (beach volleyball,

          swimming, kayaking, guided forest walks).

          IOC and Memorial University sponsored
          the 2nd annual Labrador West Music Festival.                                                       Inspections
          Amateur musicians perform and gain insight                                   HAI Review            Weekly Tours
          from the experienced adjudicators. 350 people
          attended. IOC’s John Hughes, General Manager                    Leadership                                        Leadership
          – Maintenance & Engineering, was part of the                                           Perseverance
          event committee. IOC presented two $1,000

         Safety is one of IOC’s core values and 2007 was our best
         year ever; however there were still seven Lost Time Injuries
         sustained by our employees or employees of our contractors.
         This number might seem small when measured against the
         type of work we do and the number of people we have on
         site, but it still represents seven people who were unable to
         work as a result of those injuries. While this number resulted
         in beating the target reduction set out, our ultimate goal
         is always zero injuries.

                                                                          Caroline Hupé, IOC Manager – Human Resources, awards medals
                                                                          to athletes of the 43rd annual Quebec Games in Sept-Îles.

There were many safety success stories in 2007 including:                Along with health services like a wellness program including

• The John T. Ryan Regional Trophy for Select Mines in                   40 clinics (500 wellness assessments) to test blood pressure
  Eastern Canada awarded to IOC for achieving the lowest                 and glucose or providing free Influenza vaccine to all
  reportable injury rate among the region’s select mines.                employees, medicals and fitness testing were provided
                                                                         for unionized positions, staff in operations, unionized job
• The F.J. O’Connell safety trophy awarded to IOC’s Sept-Îles
                                                                         transfers, administration (every three years), students,
  site for its health & safety record.
                                                                         employees with disabilities, and to all employees at the
• HSE audits were performed to improve HSE management                    time of retiring.
  systems and conform to Rio Tinto HSE system and
  performance standards including an internal audit with
  over 20 auditors involved. Conformance audits in both                   2007 statistics
  Labrador City and Sept-Îles, and Rio Tinto Auditor Training
                                                                           Statistics                                            Number
  with 18 IOC employees in attendance.
• The QNS&L Safety Innovation Project award presented by                   Annual medicals Labrador City                               760
  the Railway Association of Canada for the innovative idea                Pre-employment medicals
  of adding a stretch-access door to the rail changers, making             Labrador City                                               354
  it possible to bring injured people on board.                            Pre-employment fitness
• The President’s Safety Award won by the Labrador City                    (Labrador City and Sept-Îles)                               289
  Concentrator team.
                                                                           Summer students
• A number of major rebuilds and overhauls were completed                  (Labrador City and Sept-Îles)                               276
  without any reportable injuries.
                                                                           Co-op students
                                                                           (Labrador City and Sept-Îles)                                60
 Safety improvements since 2001                                            Employees with disabilities
   Year                          Lost time             Medical aid         Labrador City                                                14
   2001                                  117                       398     Job transfer fitness
                                                                           (Labrador City and Sept-Îles)                                17
   2005                                    22                      44
                                                                           Job matching assessments for
   2006                                    16                      31      disabled workers (Labrador City
   2007                                     7                      25      and Sept-Îles)                                               10

Local youth enjoy kayaking during IOC’s Family Day in Sept-Îles.         Emergency Response Team after putting out a fire during emergency
                                                                         training in Labrador City.


                                                                                         Sept-Îles’ Relay for Life site lit with purchased luminaries.
         Occupational Health and Hygiene went through successful
         external audits at Labrador City and Sept-Îles operations
         in 2007. A pregnancy awareness program is now offered
         to expecting employees throughout the stages of their
         pregnancy which provides information on topics like
         awareness of work related hazards, health counselling,
         proper lifting techniques, etc. Pocket Ear trial commenced
         and is going smoothly.

          Permanent disability accommodation summary for 2007
            New cases 2007 Returned to work                        Off work      Being evaluated
                               closed cases
                             16                    13                       2                           1

           Type of testing               Completed       Completed 2007             Unsuccessful
                                      for the month
                                       of December
           Job transfer                              1                    10                            0
           New hire                                18                    265                            1
           Gait analysis*                            0                      2                         NA
           work conditioning                         0                      5                         NA
           evaluation                                0                    10                          NA
           * Gait analysis is an assessment of body mechanics while walking, climbing,
             and crouching, etc.

We look for people who share our drive for health & safety,

continuous improvement and a secure future. Within
the next year, IOC plans to hire 200 employees to replace
retirees, and following the expansion program, new jobs
will be created. It’s about long-term security for all
communities involved.

 Distribution by gender                                          Distribution by visible minority

  1400                                                               20
  1000                                                               14
    800                                                              12
    400                                                               6
       0                                                              0
              Union       Management          Staff                          Union       Management   Staff

      Male                                                           Aboriginal
      Female                                                         Minority

IOC is also looking to the aboriginal community, hoping
that new connections will be made so that more Innu
workers can take advantage of these future job openings
at IOC. After meeting with the Innu Band Council of the
Uashat Mak Mani-Utenam Reserve in Sept-Îles and Chief
Ernest Gregoire, who worked at IOC for 17 years on the
Sept-Îles wharves, we decided to organize an event and start
talks to strengthen our relationship. Meetings with Innu
from Goose Bay, Labrador have continued and support is
ongoing for Innu-owned Tshiuetin Rail Transportation Inc.
We know that more has to be done. IOC attended A Day
on the Hill in Ottawa and one of the topics was aboriginal
relations and the role of aboriginals in the mining industry.
The initiative highlighted the need for employment in the
aboriginal community and the parallel need for human
resources in the mining industry.

it’s up to all of us:
If we continue to
work together
we will achieve                                                 Tim Butler
                                                                Vice-President, Human Resources

a strong future.”                                               & Organizational Effectiveness

                                                                Iron Ore Company of Canada
                                                                                                  Town of Labrador City

     Community Advisory Panel
     – at the heart of mining
     activities and sustainable
     The initial CAP was formed in Labrador          The first official CAP took place in both locations in the fall
                                                     of 2007 with a consultant leading the effort and producing
     City in 2006 with representation from key       a final report. The meetings proved to be challenging as
     local and external personnel. A review of       IOC and the stakeholders have been used to a less unified
                                                     approach with regards to problem solving. There is great
     the CAP process led to a revamping such         optimism that this can change.
     that new Community Advisory Panels were
     formed in both Labrador City and Sept-Îles to   What does the future hold?
                                                     The CAP initiative is new territory, a work in progress
     support the Mining Association of Canada’s      that will take time for everyone to get the hang of. Our
     principles of Towards Sustainable Mining.       goal is to improve understanding of social, environmental
                                                     and economic issues/opportunities pertaining to mining
     The panels give a voice to topics that affect   operations and community development, and to provide a
     each community, providing a consultative        smooth path where different perspectives and experiences
                                                     can be shared, appreciated and then used for the
     forum for stakeholders to engage in regular,    benefit of all.
     transparent, and constructive dialogue
     about shared sustainable development goals.
     Ultimately, all issues are important and IOC
     is listening and acting alongside community
     members so that the best outcome can be

                                                                                                                       Town of Sept-Îles

 Prominent community concerns
  3 Pillars of SD                    Labrador City                               Sept-Îles
  Social                             Housing, daycare capacity, attracting       First Nations, health professionals
                                     developers, recruitment                     shortage, municipal water treatment,
  Environment                        Tailings, impact of blasting on             Site remediation, bank erosion, local
                                     recreation, local ecosystems, dust          ecosystems, dust and air quality
                                     and air quality
  Economic                           Decline in services industry, tourism,      Pellet plant development, optimization
                                     mine life                                   of harbour, mine life

Members of Sept-Îles’ Community Advisory Panel                   Members of Labrador City’s Community Advisory Panel

                  Community & Culture                                                 Communications Event – Sept-Îles and Labrador
         Social                                                                       Every December in both IOC locations, the Communications
                  25th Anniversary of the Town of Schefferville Closing               and External Relations team meets with community leaders
                  The closing of IOC’s Schefferville mine in 1982 caused              to present an overview of the IOC community activities that
                  the departure of nearly all 5,000 inhabitants of Schefferville,     took place during the year. These events are held at both
                  in northern Quebec. Close to 600 former residents reunited          cultural centres and end with performances by local dancers.
                  in Trois-Rivières to mark the 25th anniversary of the city’s
                  closing. Former residents came from many different places
                  to attend the event, some from as far as Switzerland and
                  Algeria. Serge Girardin, former resident of Schefferville and
                  IOC Technical Studies Manager – Major Projects, was present.

                                                                                      Community leaders in Labrador City enjoy the IOC Communications Event
                                                                                      at the Labrador West Art and Culture Center.

                  Family picture taken at the event: Serge Girardin with eight
                  of his nine sisters.

                  Book Fair
                  For several years now, authors and editors have been
                  presenting their books at the Book Fair, an event that takes        In Sept-Îles, Arlène Beaudin, Communications & External Relations
                  place in various cities throughout Quebec. Once again,              Advisor, presents an overview of IOC’s community activities.
                  IOC financed the North Shore Book Fair which took place in
                  Sept-Îles and welcomed over 10,000 people – a 24% increase          Gate Decorating in Labrador City
                  over last year’s attendance. IOC financing included a stage         Every year, IOC decorates its main entrance to celebrate
                  where authors and editors were able to present their work.          the holiday season. 2007’s gate decorating coincided
                                                                                      with helping the Town of Labrador City’s Winter Light
                                                                                      Celebrations and Contest, as well as initiating IOC’s
                                                                                      community support with “Stuff the Bus” and “12 Days
                                                                                      of Christmas” fundraisers.

                  More than 200 publishing houses were represented by more
                  than 60 exhibitors in 2007.

                                                                                      IOC gate decorated for the 2007 holiday season.

                                                                                      IOC Guided Summer Tours
                                                                                      To raise awareness and promote IOC, guided summer tours
                                                                                      are arranged for interested tourists and local residents.
                                                                                      The highest safety standards are followed during these
                  The IOC stage welcomes many round tables and animated discussions
                                                                                      tours that bring visitors by bus throughout the IOC site.
                  during the Book Fair.

                                                                                      In Labrador City, money raised during the tours goes
                                                                                      to the Tourism Corporation.
Sept-Îles Operations Tours

With the help of an IOC retiree, the Company offered guided
tours of its Sept-Îles operations from July to August of 2007.
Thirty-six visitors in total – some tourists and others Sept-Îles
citizens – took advantage of the opportunity to see IOC’s port
and railway facilities.

La Veillée – Quebec Theatre Group
The troupe threw a benefit dinner and theatre evening in
support of the Arts. IOC gave $500 to help the troupe
in promoting and exploring different cultural avenues.

                  Community & Culture Partnerships                                   Soundscapes and Salle de Spectacle
         Social                                                                      Various community and culture events are supported by IOC
                  North American Railcar Operations Association (NARCOA)             throughout each year. In 2007, Labrador West’s Memorial
                  IOC indulged the passions of over 30 railway enthusiasts           University held Soundscapes, an innovative and exciting
                  who attempt to ride every railway in North America. The            collaboration between IOC and the School of Music designed
                  group left Sept-Îles on August 26th and travelled by train         to provide enhanced cultural and music opportunities for
                  to Schefferville, then Labrador City, eventually returning         school-aged students in Labrador West. Music students
                  to Sept-Îles on September 2nd. IOC offered assistance and          from Memorial University visit Labrador West schools and
                  gave out QNS&L conductor caps and a miniature train                conduct shows for them during the year. In place since 2006,
                  in Lucite to each NARCOA member.                                   the three year project sees IOC donating $15,000 per year
                                                                                     over the course of the contract. Similarly, in Sept-Îles, the
                                                                                     Salle de Spectacle is held four times per season, promoting
                                                                                     music, theatre, dance and singing to young people via a
                                                                                     partnership with IOC. In 2007, the Guitar Trio of Montreal
                                                                                     gave lessons to 47 amateurs of all ages and all levels from the
                                                                                     community. The artists offered participants feedback and
                                                                                     advice, responded to questions and showed them various
                                                                                     musical arrangements. The other seven events featured
                                                                                     singers Stefie Shock, Ariane Moffatt and Marco Calliari,
                                                                                     magician Mysteract, the plays Waiting for Godot and Jouliks,
                                                                                     and the dancers from the group Zone gigue et chaises.

                  NARCOA participants enjoyed their trip on the QNS&L Railway.

                  Oreway Trip
                  In 1956, pilot Captain Gerard Belanger died in a plane crash
                  that claimed not only his life, but that of his co-pilot and one
                  passenger. The airplane he piloted crashed halfway through
                  the flight at IOC’s Oreway station. The Captain’s son, Pierre
                  Belanger, decided to make the journey to Labrador City
                  this summer to visit the Oreway crash site. IOC committed
                  to helping Belanger and his wife get to the Oreway Station
                  safely by arranging his trip via train and helicopter.             IOC entered into a partnership with the MUN School of Music to deliver
                                                                                     music programs in the Labrador West schools.

                  The pilot's son, Pierre Belanger, at the Oreway crash site.
                                                                                     Guitar lovers practicing new tips in a master class offered
                                                                                     by The Guitar Trio of Montreal.

Tourism Grand Prize Gala

A grand gala that honours organizations, businesses and
various projects that enhance tourism on the North Shore
of Quebec, IOC was once again a major sponsor. Maurice
McClure, IOC General Manager – Finance & Administration,
represented IOC and acted as the president of the selection

                                                              Marie-Soleil Vigneault, General Manager of the RTA, gives the Tourism
                                                              Event and Fest award to Louis Perreault of the Port-Cartier SnoCross.

                  Vieux Quai en Fête IOC                                           Safety
         Social   In 2007, after 10 years of collaboration, IOC became an
                  official partner of the Vieux Quai en Fête in Sept-Îles, aptly   Isolation Awareness Month in Labrador City
                  renamed Vieux Quai en Fête IOC for its 14th year. This           August is Isolation Awareness Month at IOC’s Labrador City
                  annual event celebrates “the family” in an alcohol-free          operations. In August of 2007, one new safety message was
                  environment. To commemorate t he occasion, QNS&L ran             delivered three times daily on the local radio station as well
                  a small train around the site, encouraging everyone to           as being delivered every day to employees by their leaders.
                  “Come get on board”. Approximately 23,000 people attended        Safety messages focused on Personal Isolation Locks (PIL),
                  the four-day event.                                              hazardous energy, parking vehicles and isolation officer

                                                                                     AUGUST 6TH - 10TH
                                                                                     ISOLATION AWARENESS WEEK

                                                                                     Use your personal isolation lock
                                                                                     Your life may depend on it

                  Starting line of the four-wheeler itinerary.
                                                                                   Labrador West Joint Buoy Committee
                                                                                   IOC’s partnership with the local boater’s association
                                                                                   continued in 2007 with IOC’s 2006 donation of $12,000.
                                                                                   This funding is used for the annual installation of the “Aids
                                                                                   to Navigation” buoy marker system for the safety of the
                                                                                   boating public, research and monitoring. Forty-four buoys
                                                                                   were purchased and are currently stored in the Northern
                                                                                   Maintenance yard. Every June the buoys are put into
                                                                                   Wabush Lake and then taken out in November.

                                                                                   Montreal Head Office Fire Drill
                                                                                   In compliance with the by-laws regarding security in public
                                                                                   buildings, IOC performed an evacuation test in August
                                                                                   of 2007. Montreal employees were instructed on how to
                  Martin Deschamps and his rock band were the guest artists        evacuate and who to contact with regards to specific details
                  for the Saturday night show.                                     as well as advised to look at IOC’s security booklet, which
                                                                                   includes information on fire drills.

President’s Safety Award                                                 Sports

Three years without a Lost-Time injury, the Terminal team
picked up the prize this year. The team also boasted an All              24-Hour Badminton
Injury Frequency Rate of 1.49 and had only one Medical                   The 24-Hour Badminton fundraiser is held every year, and
Treatment Case in 2006. This award recognizes safety                     in 2007, IOC’s Joëlle Gagné and Luc Côté played for the cause.
excellence and in this case the win is particularly impressive           IOC’s support enables the Elite Badminton Club to assist
as the team works on high risk equipment.                                its members in taking part in competitions throughout
                                                                         the year.

Robin Ouellet, Superintendent – Terminal Maintenance; Michael Tost,
General Manager – HSE; Michael J. Shannon, former Vice President –
                                                                         Joëlle Gagné, Junior Administrator – Human Resources and
Operations and Engineering; Daniel Pineault, Superintendent – Terminal
                                                                         Luc Côté, Maintainer Operator Electrical 2 – Shops played
Operations; Terence F. Bowles, President and CEO; Eddy Wright, Process
                                                                         badminton for an hour while representing IOC.
Controller – Laboratory; Luc Turner, Process Controller – Laboratory;
Dave Pineault, summer student – Laboratory; Joëlle Lévesque, Process
Controller – Laboratory; Marc-André Roy, Union executive member –
Steelworkers 9344.
                                                                         Cain’s Quest Snowmobile Adventure
                                                                         The second annual Cain’s Quest Snowmobile Endurance
                                                                         Race took competitors on an incredible journey through
Snowmobile Safety Campaign                                               the Labrador wilderness. The race was approximately
Originally, IOC promoted safety along the railway as part                2,000 kilometres on ungroomed trails where teams of
of its legal obligation, but since then the obligation has               two riders and their snow machines raced to the finish
turned into an ongoing safety campaign. Both IOC locations               and the $40,000 purse. IOC donated $3,500, helicopter
organize safety campaigns that are featured on local TV and              services and boxcar services for gas delivery to stop
radio stations, and in the newspapers. Posters and ads are               points. The event was aired on TSN and OLN.
created to make sure people drive and play safe along the
railway. Starting in 2008, IOC will be adding to the campaign
ATVs, fishing, boating and skiing. In partnership with the
RNC, IOC also paid the lease on a new snowmobile.

                                                                         Participants brave the elements while supporters wait at the finish line.

                  Chamber of Commerce Golf Tournament                                   Labrador City Curling Funspiel
         Social   The first annual Labrador West Chamber of Commerce Golf               IOC sponsored a Curling Funspiel on October 25th and
                  Tournament for members and their employees was held on                26th for all IOC employees and friends. Twenty-four teams
                  September 1, 2007. Twenty-five percent of the proceeds                entered, dinner was served and prizes were given out to
                  raised were given to the local Food Bank.                             those who curled, namely two plane tickets from Provincial
                                                                                        Airlines as the Grand Prize.

                  Members of the Labrador West Chamber of Commerce enjoying the first
                  annual golf tournament at Tamarack Golf Course.                       IOC employees and friends enjoying a fun weekend of curling
                                                                                        at the annual IOC Curling Funspiel.

                  Work Out World
                  IOC continues to support active lifestyles in the community           Orange Volleyball Tournament
                  by donating $10,000 to enable the non-profit Work Out                 IOC attended the official opening ceremony of the
                  World to build a new facility. Originally created by IOC,             28th annual Orange Volleyball Tournament. IOC financed
                  Work Out World (WOW) is Labrador City’s local fitness centre          12 first aid kits and two sessions of first aid training
                  where 60% of the membership consists of IOC employees                 for volunteers.
                  and their families. In the mid-90s, IOC ceased its association
                  with the facility, but remained supportive of its mission: To         Iron City Duathlon
                  provide an area for people to exercise and increase education         The IOC-sponsored Iron City Duathlon celebrated its
                  regarding healthy lifestyle and safe exercise.                        third birthday in 2007. IOC donated 200 t-shirts and $1,000
                                                                                        for the event. Andrew Taplin, former General Manager –
                  IOC Hockey Tournament                                                 Primary Ore, represented IOC on the organizing committee.
                  Eight teams participated in the seventh annual IOC hockey
                  tournament that sets large businesses of Sept-Îles and
                  Labrador City against each other on the ice. Each team
                  played three games with the winners meeting in the finals.

                                                                                        Youth participants under 13 gather at the event.

                  IOC’s Sept-Îles team won the Tournament.

Labrador West Regatta                                                   Sports Partnerships

The 35th annual Labrador West Regatta was held on July
27th, 2007 at Jean Lake in Wabush. IOC sponsored the IOC                Fer-O Hockey Tournament
team competing in the event: Christie Meadus, Chantil                   IOC has sponsored this major hockey tournament every
Strangemore, Dawn Willcott, Diana Dwyer and coxswain                    year since 1977 by assuring the transportation of players
Linda Morgan. Over 5,000 people attended the event to                   from Schefferville, Labrador City and Fermont. For the last
enjoy the activities and cheer on the 49 rowing teams.                  two years, IOC has donated close to $15,000 to the event.
                                                                        Ninety-two hockey teams from all over the province were
                                                                        present for the event and former NHL player Pierre Bouchard
                                                                        was the honourary president.

IOC-sponsored ladies rowing team (from left to right): Dawn Willcott,
Christie Meadus, Linda Morgan, Diana Dwyer and Chantil Strangemore.

Run for the Hills                                                       Official face-off.
The second annual Run for the Hills event took place on                 Alain Lapierre, representative of the Town of Sept-Îles; Michel Laforest,
                                                                        President of the Fer-O organizing committee; Louis Gravel, General
September 23rd, 2007. The wind, rain and snow didn’t keep               Manager – Product Delivery; Pierre Bouchard, honourary President;
the 197 entrants from coming out. A major sponsor, IOC                  and two young hockey players.
donated $1,000 and prizes. Michael Tost, General Manager –
Health, Safety & Environment, was part of the organizing
committee.                                                              Team Gushue
                                                                        IOC is proud to sponsor curling’s Team Gushue as they prepare
                                                                        for the Vancouver 2010 Winter Olympics by donating a total
                                                                        of $45,000 ($15,000 per year for three years). The official
                                                                        cheque presentation occurred in St. John’s, Newfoundland
                                                                        and Labrador, on November 1, 2007. The Olympic team
                                                                        won gold at the 2006 winter Olympics in Torina and the
                                                                        community is rooting for them once again for 2010.

IOC employees were among the many Labrador West participants
in the 2007 Run for the Hills challenge hosted by Menihek Nordic
Ski Club in September.

Michael Tost, General Manager – Health Safety and Environment,

Tayfun Eldem, Vice President – Operations and Engineering,
and his son Lucas Eldem.
                  Quebec Games in Sept-Îles
         Social   The 43rd annual Quebec Games took place in Sept-Îles
                  with over 4,000 youth participating and IOC donating over
                  $85,000 in funding and other donations such as computers
                  in order to build a solid infrastructure. Thirty IOC employees
                  were generous with their time, helping to organize and
                  support the Games, and five members of IOC’s management
                  team became governors of the Games, generating an
                  additional contribution of over $20,000.

                                                                                          Target archery competition.

                  Louis Gravel, General Manager – Product Delivery, Michael J. Shannon,   Some employees who volunteered during the Quebec Games in Sept-Îles.
                  former Vice President – Operations and Engineering and Caroline Hupé,
                  Manager – Human Resources attended many competitions and gave
                  medals to athletes.

Health                                                            Health Partnerships

Miscellaneous Donations                                           Relay for Life – Labrador City and Sept-Îles
In both Labrador City and Sept-Îles, IOC donates various          A major sponsor of the Canadian Cancer Society’s Relay for
items to the community. Recently, local NGO “Le Collectif         Life, IOC donated $10,000 to the event, which takes place in
de Sept-Îles” opened a house for expectant mothers from           both IOC locations of Sept-Îles and Labrador City every year.
the lower North Shore who have to travel to the nearest           Many employees get involved, walking 12 hours for cancer
hospital, in Sept-Îles, to give birth. IOC provided furnishings   research, participating in the organizing committees, or
for the house and donations to other NGOs included laptops,       volunteering for the cause by supporting the walkers.
desktops, wood, freezers, hydraulic units, plane tickets,         This year, Relay for Life raised a total of $85,458 in Sept-Îles
a pump house, steel, rain coats, first aid kits and more.         and over $106,000 in Labrador City who led the province
                                                                  in funds raised.
Women’s Centre – 30th Anniversary
In recognition of the 30th anniversary of the Labrador West
Status of Women Centre, IOC sponsored a ‘meet and greet’
at O’Brien Hall. Women from the community set up booths
to provide information on their achievements and evolution
within the community. IOC’s Heather Bruce-Veitch, Manager
– Human Resources, is on the Women’s Centre board of

                                                                  The 2007 Labrador West Relay for Life began with a cancer survivor walk.

Participants and guests celebrate and take part in the Women’s
Centre anniversary.
                                                                  Thirty-eight teams participated in Sept-Îles’ 2007 event.

                                                                  Employee Assistance Program (EAP)
                                                                  Designed to provide confidential assistance and support
                                                                  for employees and their family members, IOC is committed
                                                                  to actively and effectively helping to manage their personal
                                                                  matters. The EAP also focuses on wellness by providing
                                                                  practical education and presentation programs. Funding
                                                                  includes voluntary contributions of $20 annually by
                                                                  employees with IOC matching each contribution.

                  Christmas Season Donations                                          Education
         Social   In the month of December 2007, employees of IOC came
                  together, pooled their resources and found that they had            Career Fair at Sept-Îles College
                  a lot to give to those less fortunate. Their efforts, along         Joëlle Gagné, Micheline Lebrun, Claude Lauzier and
                  with those of IOC who matched the funds, were a welcome             Alain Collard from IOC manned a career fair kiosk at
                  conclusion to the holiday season. IOC’s annual food drive           Sept-Îles College. An estimated 300 people attended the
                  in Labrador City – Stuff the Bus – was once again a success.        fair where IOC offered information on the company and
                  IOC, USW and J&S Busing partnered and over 3,100 lbs of             the mining industry.
                  food was given by employees and community members to
                  the local food bank. The amount topped last year’s final
                  count by 1,000 lbs! The 12 Days of Christmas – Annual
                  Ministerial Christmas Appeal is a charity to which IOC
                  matched every dollar donated by IOC employees. Through
                  employees and IOC combined, the total was $30,167.40.
                  Similar success was achieved in Sept-Îles, where employees
                  dug deep and came up with $34,253 for United Way
                  (Centraide) an amount that was matched by IOC. The target
                  for the campaign was $65,000. In total, the donation in 2007
                  came to $68,506! And IOC’s Montreal office also held their
                  United Way campaign reporting donations of $9,753.50.
                  With IOC agreeing to give the same amount raised                    Claude Lauzier, Maintainer Operator Mechanical 2 – Locomotive Shop;
                                                                                      Joëlle Gagné, Junior Administrator – Human Resources; Micheline Lebrun,
                  by employees, contributions totalled $19,507.
                                                                                      Administrator – Human Resources; and Alain Collard, Maintainer Operator
                                                                                      Mechanical 2 – Car Shop.

                  IOC Centraide Campaign Committee members with Centraide Duplessis
                  representatives.                                                    Many other companies also held a kiosk at this annual career fair.

                                                                                      Sept-Îles College Foundation
                                                                                      In support of honour students in the academic, culture
                                                                                      and sport fields, the College of Sept-Îles gives out bursaries
                                                                                      annually. This year, IOC was granted the privilege of
                                                                                      donating the highest honour of the evening – the Governor
                                                                                      General’s bursary valued at $1,000, which recognizes the
                                                                                      graduating student with the highest academic average.

                  IOC employees with Reverend Roger Whalen of the Labrador West
                  Ministerial Association.

                                                                                      Carole Bossé, HR Advisor, and Micheline Lebrun, HR Administrator,
                                                                                      with the Governor General’s bursary award winner.

                                                                                      Manikoutai School Merit Gala
                  Labrador City Town Councilor, Peter Reccord and Wanda Paddock
                                                                                      Sept-Îles’ Manikoutai School held its 19th annual Merit Gala
                  with the Labrador West Food Bank.
                                                                                      in June of 2007 where IOC presented bursaries totalling
                                                                                      $500 to students who had excelled in certain subjects

                                                                                      or had a high overall average.
High School Math Competition                                             Menihek Safegrad Donation

Jason Callan, Electrical Engineer at IOC, was instrumental               IOC was pleased to support Menihek High School’s Safe Grad
in arranging this event through the Menihek High School.                 event in Labrador City by donating the sum of $1,000. Safe
Sponsored by the Professional Engineers and Geoscientists                Grad is an opportunity for the approximately one hundred
organization (P. Eng.) and hosted by IOC, 15 students                    graduates to celebrate their grad night drug and alcohol free.
attended. All students and teachers were bussed to the Mine              Parents, teachers and members of the Royal Newfoundland
Training Building where the competition was held. Lunch                  Constabulary participated in support of the students’ choice
was also provided (by P. Eng.) as well as a mine tour.                   for a healthy and safe environment.

Menihek High School Math Team preparing for Provincial Competition       Michael Tost, General Manager – Health Safety and Environment
in St. John’s.                                                           presenting a donation to Menihek High School Graduates.

Junior Achievement Program                                               Mine Tours to Students
A global, non-profit organization focused on teaching                    IOC was approached by both Menihek High School and A.P.
youth about business – the value of free enterprise,                     Low Primary School and enthusiastically agreed to offer
business concepts, entrepreneurship and leadership skills.               mine tours to all Career Development students at Menihek
Labrador City’s committee is a branch of Newfoundland &                  and all the grade three students from A.P. Low.
Labrador’s Junior Achievement chapter. Local companies
and organizations can offer support through the committee
by investing time and/or money. In 2007, one IOC employee
– Paula Pieroway – also gave time during the year to deliver
courses. IOC donated $3,500 as well as promotional
materials to help participants achieve their goals. Michael
Tost, General Manager – Health, Safety & Environment,
made a presentation to the group.

                                                                         A.P. Low Primary students.

                                                                         Innu youth Employment Forum
                                                                         To promote IOC’s job opportunities among aboriginal
                                                                         communities, IOC attended the event, contributed $2,000
                                                                         and had volunteers take part in various ways including
                                                                         organizing an information booth, workshops, traditional
                                                                         dinners and exhibition halls.
Formal presentation made to the Junior Achievement Group
by Michael Tost, IOC’s General Manager – Health, Safety & Environment.
                                                                         Homework Help
                                                                         $4,000 was given to Sept-Îles’ Aide au Devoir, a program run
University and College Career Days                                       by the NGO L’Envol. Helping needy families by providing
IOC was a distinct presence at many career days throughout               after school support and tutoring for their children, IOC rents
the year, both in the Provinces of Newfoundland and                      the classroom on a yearly basis. Approximately 50 children
Labrador and in Quebec. Various employees from different                 and families took advantage of the program in 2007.
areas of IOC took part, offering a variety of information,
and promoting IOC, the mining industry and the beautiful
regions of Labrador West and Sept-Îles.

Maintenance of Way team in action.

                                     Building awareness
                                     – pursuing excellence
                                     in health & safety,
                                     on the job and in
                                     the community.
                                                                                                                    Targets & Performance
                                                         Achieved         Partially Achieved         Not Achieved

Indicator                  2007 Target                  Target Achieved               2008 Target
Community Relations
Community Advisory Panel   Create a Community            CAPs in both                 Three CAPs in each
(CAP)                      Advisory Panel (CAP)          communities were             location, in order to stay
                           in Sept-Îles.                 implemented. Although        attuned to stakeholders’
                                                         challenging, a new way of    concerns during expansion
                                                         approaching issues has       period.
                                                         been reached – together
                                                         with all stakeholders in
                                                         order to brainstorm and
                                                         share ideas.
Expansion                                                                             Maintain dialogue on
                                                                                      expansion impacts in both
Five-year Community        Finalize and adopt IOC’s      Multi-year community
Relations Plan             multi-year community          relations plan is now
                           relations plan.               integrated into IOC
                                                         business plan.
Community Investment       Finalize and implement a      Not completed yet; still     Will be implemented in
Policy                     corporate donation policy.    needs some adjustments.      third quarter of 2008.
Recruitment                Recruit 150-200               291 new employees            Recruit and train up to
                           employees.                    hired.                       200 employees to replace
                                                                                      projected retirements
                                                                                      and increasing production
Aboriginal recruitment     Establish basis for hiring    Held Young Innu              Continue discussions
                           and subcontracting            Employment Forum in          with Native Band Council
                           processes for aboriginals     September of 2007. Met       to establish basis for
                           from Quebec and               with Innu Chief Ernest       hiring and subcontracting
                           Newfoundland and Labrador.    Gregoire to discuss          processes.
                                                         organizing an event and
                                                         start talks to strengthen
                                                         our relationship. A Day
                                                         on the Hill initiative
                                                         highlighted the need
                                                         for employment in the
                                                         aboriginal community
                                                         and the parallel need for
                                                         human resources in the
                                                         mining industry.
Recruitment advertising    Create a competitive          Three linked campaigns       Continue with
campaign                   advertising campaign to       are ongoing: recruitment,    the three campaigns.
                           support IOC recruitment       employee recognition
                           efforts.                      and focused campaign
                                                         in specialized magazines
                                                         (sports, fishing, hunting,
Career fairs/booths        Merge IOC and the two         Recruitment is now a         Continue combined
                           other Rio Tinto units in      combined activity with       activities with QIT and
                           Canada for recruitment        QIT and DIAVIK, under        DIAVIK, under Rio Tinto
                           purposes.                     Rio Tinto Canada.            Canada umbrella.

Targets & Performance
                        Social                                                               Achieved          Partially Achieved         Not Achieved

                                 Indicator                   2007 Target                    Target Achieved                2008 Target
                                 Recruitment tool            Transition from CV Manager      Ongoing                       Should be finalized in
                                                             to Taleo, Rio Tinto global                                    first quarter of 2008.
                                                             tool for employment.
                                 LEAN (Continuous                                            Rollout started in the        Implement LEAN in
                                 Improvement)                                                concentrator and              all areas.
                                 Employees have good                                                                       Deploy learning map to at
                                 business understanding                                                                    least 20% of workforce.
                                 and are fully engaged
                                 Active leadership aligned                                                                 Implement coaching
                                 with IOC values                                                                           and frontline leadership
                                                                                                                           programs for leaders.
                                 Injuries and Illnesses
                                 LTIFR                       0.50                            0.29                          Only AIFR target from 2008
                                                                                             Seven Lost Time Injuries      onwards.
                                                                                             occurred in 2007.
                                 AIFR                        1.49                            1.35                          1.08
                                                                                             32 injuries needed
                                                                                             medical treatment,
                                                                                             including the seven Lost
                                                                                             Time Injuries.
                                 Emergency Measures
                                 Disaster Management &       Implement DMRP at               Will continue to work with    Continually improve on the
                                 Recovery Plan (DMRP)        Montreal corporate office       Montreal employees to         skills of individuals and
                                                             and test effectiveness.         ensure they are prepared      teams within the Disaster
                                                                                             to respond to identified      Management & Recovery
                                                                                             threats in a planned and      (DM&R) structure and to
                                                                                             coordinated manner.           establish various protocols
                                                                                                                           that define response and
                                                                                                                           coordination between
                                                                                                                           all three sites.
                                 DMRP team                   Provide training to DMRP        A number of drills were       Focus on developing
                                                             teams on roles and              conducted in 2007             better understanding of
                                                             responsibilities. Easier and    helping teams identify        roles and responsibilities
                                                             more frequent updates to        areas for improvement.        of individuals and teams
                                                             Plan. Make documentation        Conducted a full-scale        within DM&R as well as the
                                                             more accessible to team.        drill of an incident in ATO   support structures needed
                                                                                             area which served to          to sustain this type of
                                                                                             better prepare our DM&R       activity. External Response
                                                                                             team as well as the area      Teams will be included to
                                                                                             ATO management and            support learning efforts.
                                                                                             unionized teams.
                                 Emergency Response Team     Develop skills of ERT           Moved forward with            Functionally, the team will
                                 (ERT)                       leaders. Select and train       the selection and             continue to develop skills
                                                             four to six new members.        development of a 45           in the area of underground
                                                             Have fully trained team         member ERT. Leaders           rescue training. We will also
                                                             together by end of 2007.        were sent to train the        move towards expanding
                                                                                             trainer sessions – we         the training to include
                                                                                             now have three of our         industrial fire fighting and
                                                                                             ERT leaders working           emergency care.
                                                                                             toward certification as
                                                                                             underground mine rescue

                                                                                                                         Targets & Performance
                                                              Achieved         Partially Achieved        Not Achieved

Indicator                    2007 Target                     Target Achieved              2008 Target
Leadership Training
Safety Tours                 VPs and GMs to participate       Training was provided.      Requirements are part of
and Interaction              in one Safety Tour and                                       personal HSE plans.
                             conduct one Safety
                             Interaction per week.
Team Leader Development      Continue the TLDP. Expand        A new program was           New and existing team
Program (TLDP)               safety skills development        initiated in September      leaders are currently
                             section to include some          of 07. The program          enrolled in the program.
                             existing team leaders.           continues to develop to     Additionally, some of
                             Incorporate program              meet the needs of the       our engineering staff
                             developed by Rio Tinto           organization.               have enrolled and are
                             to enhance leadership                                        actively participating in
                             throughout group.                                            the training. This will
                                                                                          continue in 2008 as we
                                                                                          develop self assessment
                                                                                          tools to facilitate a better
                                                                                          overall diagnostic tool.
                                                                                          The objective is to develop
                                                                                          a program that will
                                                                                          accommodate a greater
                                                                                          percentage of our Team
                                                                                          Leaders in active leadership
Safety Standards
SafetyNet project            One more visit to IOC site       Visit/meeting took place.
                             is required to validate          Project finished.
Occupational Health
Injury Management – stress Launch Virtues project.            PDAs done for most          Finish PDAs and establish
management program and Upgrade Physical Demands               areas. Health Advocacy      wellness program.
Virtues project            Assessments (PDA) for all          program piloted.
                           positions. Introduce Health
                           Advocacy program, self-
                           directed work teams in each
                           functional area.
Prevention of exposure in    Populate Occupational            Fiber analysis done.        Update and present OHH
high risk areas              Health & Hygiene (OHH)           Participating in noise      procedures as part of the
                             Intranet with all policies,      reduction forum.            integrated management
                             procedures and relevant                                      system Health, Safety,
                             documentation. Integrate                                     Environment and Quality
                             fiber analysis into specialty                                (HSEQ) project.
                             sampling program. Become
                             an active participant in the
                             Noise Reduction Forum
                             through Rio Tinto.
Strengthen HSE Leadership    Ensure that leaders and          Open house held in          Develop leadership
                             contractors are aware of         Sept-Îles. Team leader      training for all levels of
                             OHH services and protocols       training course deployed    management, aligned with
                             through an open house and        in Labrador City.           Rio Tinto requirements.
                             leadership training module.

Full compliance with         Continue with internal                                       The Health performance
Rio Tinto Health & Hygiene   audits for both Labrador                                     standards received
Standards                    City and Sept-Îles                                           1 commendation,
                             operations.                                                  4 minor findings and
                                                                                          4 observations in the
                                                                                          December 2007 audit.


              for Everything
              We Touch

              Shane Taylor, Senior Operator/Maintainer,
              digs deep with a Shovel.
                                                                  Wildlife and nature initiatives
                                                                  Stewardship Association of Municipalities (SAM):
                                                                  Labrador City and Wabush in association with
                                 Michael Tost                     Eastern Habitat Joint Venture – portions of land
                                 General Manager – HSE            set aside for wetland conservation. IOC hosted
                                 Iron Ore Company of Canada       the 2007 SAM meeting, subsidized travel for
                                                                  municipalities, took participants on tours of the mine
IOC wants to be known as a leader                                 and tailings wetland development. IOC sponsored
in environmental performance by                                   goldeneye nest box program, constructing nests
                                                                  in Labrador locations including IOC tailings and
demonstrating good stewardship of                                 White Lake.
our natural resources, reducing our                               Moisie River Protection Association (MRPA): IOC
environmental footprint, and meeting                              partnered with MRPA to protect the environment
                                                                  and natural resources. Protecting the land
community expectations to support                                 alongside the QNS&L railway, IOC conducted flora
sustainable development and we have                               and fauna inventory and rigorous inspection of
                                                                  railway equipment, particularly tank cars. Camp
made progress.                                                    dumps have been eliminated and replaced with
                                                                  containment facilities for temporary storage of
I came to IOC in 2007 from Rio Tinto to champion and
                                                                  materials to be shipped to safe sites.
launch Sustainable Development. And we’ve certainly been          Black Bear Relocation: IOC environment personnel,
working hard at it. Our aim is to fully integrate SD into the     working with the local wildlife officer and his staff,
business as a core value.                                         captured 13 bears on IOC property. The bears were
                                                                  tranquilized, tagged, and removed and re-located
The Tailings Management Program (TMP) is our brightest            some 130 kilometres from town and released.
example of environmental responsibility. Since 1999, we’ve        Similarly, 25 Black Bears were captured, tagged
been working with the community and government to return          and released in a safe location in the Labrador
Wabush Lake to its former state, and we’re doing that. It’s an    West area during the summer of 2007.
immense and extraordinary initiative. Using proven and new        Two osprey nesting platforms were built and
technology, the lake has been given back to the community.        installed on tailings.
We’re implementing this way of giving back to the
environment, to the community, in every way we can. The          IOC recognizes that the mining industry faces specific
trees cleared at our Luce Deposit site used to be piled up,      challenges as we have a direct impact on the environment
basically left to rot or be burned, but we’ve learned a thing    – we extract ore from the ground, utilize energy and water,
or two. Now the trees have a better fate: After meeting          generate waste and emissions including greenhouse gases.
provincial regulations for tree clearing, the trees were         And we recognize our responsibility to minimize, and
harvested and donated to Labrador City community groups          eliminate, where possible, these impacts on the receiving
and local businesses like the Girl Guides and Boy Scouts.        environment.
We achieved similar results with our new dolomite quarry
project: The cleared trees were donated to the public.
And we are planting new trees along Retty Street, beside
our Sept-Îles operations. In a few years these trees will
create a green barrier between our installations and
the neighbouring residential area.

We do our best to support a safe and healthy environment.
Wildlife is another aspect of living in these northern towns
that needs our protection. We interact with it on a daily
basis and it’s a real pleasure and we want to keep it that
way. To support the IOC Value that we be socially and
environmentally responsible, IOC is instrumental in
many initiatives.

                                                                 Boy Scouts receive donated trees from Luce Deposit clearing.

Environment   Air quality and greenhouse gases in particular will be                  IOC has set reduction targets for each of these
              high on our agenda in the next couple of years as in 2007               environmental aspects, and although performance against
              Environment Canada started consultation on the Clean Air                target was not achieved for either of these indicators in 2007,
              Act, which in our case will regulate GHG, dust, NOx and                 we’re well positioned to exceed our five-year reduction
              SOx emissions from our pellet plant. Throughout the year                targets for greenhouse gas emissions and energy efficiency
              we have been involved in consultations and currently we                 (both set at 5%). Freshwater withdrawn intensity increased
              are in the process of developing strategies on how to meet              the largest over 2006 levels; however, we should still be on
              – and exceed – the requirements, taking SD principles                   track to achieve the 2.5% reduction target set.
              into consideration.
                                                                                      The communities are very active in these environmental
                                                                                      activities. It just shows you how much we can do, what kind
               Environmental targets performance                                      of impact we can achieve, when we work together.

                                                                                       Recycling and hazardous wastes
                           15%                                                         Household Hazardous Waste Day: 18,000 litres
                                                                                       in Labrador City; 24 metric tonnes and 11 tonnes
                           10%                                                         of old computers in Sept-Îles.

                                                                                       Safe hazardous waste storage areas installed in all
                            5%                                                         sectors in Labrador City, Sept-Îles and even along
                                                                                       QNS&L railroad.
                            0%                                                         Recycling Program: Sept-Îles disposal site –
                                                                                       departments dispose of materials to be reused or
                           -5%                                                         recycled; recycling containers on Sept-Îles site and
                                                                                       in camps along the QNS&L railway; over 100 small
                           -10%                                                        recycling bins in various office locations.
                                  2003   2004 *      2005        2006       2007       SAVE Energy Event: Labrador West community
                                                                                       fair and door-to-door energy efficient light bulb
                           GHG emission intensity                                      delivery campaign. IOC partnered with HydroWise
                           Energy consumption intensity                                from Newfoundland & Labrador Hydro, Department
                           Freshwater withdrawn intensity                              of Natural Resources, SAVE-Shared Atlantic Vision
                                                                                       for Energy Efficiency, and local municipalities
               * Impacted by a ten-week strike in 2004.                                to sponsor it and provide energy conservation
                                                                                       information at the fair.
              In 2007, IOC reduced its consumption of energy, greenhouse
              gas emissions and withdrawal of freshwater from an absolute
              perspective; however, the rate of energy consumption,                   And it’s very important that once these works are done,
              greenhouse gas emissions and freshwater withdrawal all                  that they are recognized, that people know about them and
              increased. In general, production issues in 2007 combined               share in a sense of pride. It brings us together. We celebrate
              with the ten-week work stoppage in March and April were                 these environmental works together every year through
              the main contributors to the increase in intensity in                   Environment Week. Our HSE department and the United
              comparison to 2006 performance.                                         Steelworker’s Union put it together to foster dialogue,
                                                                                      where we all, as a community, can share ideas.

                                                                                      “Together, we’ve really
                                                                                      managed to create a
              IOC donated recycled materials to build 35 goldeneye nests around IOC   community spirit that
                                                                                      inspires a respect for
              and two osprey nesting platforms on the tailings.

                                                                                      the environment in
                                                                                      everything we do,
                                                                  Michael Tost
                                                         General Manager – HSE
                                                   Iron Ore Company of Canada         at work and at home.”
                   Moisie River

Surprising partnership
– the QNS&L railway
runs alongside the
Moisie River and its
legendary Atlantic
                                                                                                                      Tailings site in Labrador City

     Tailings                                                                   Eager to ensure long-term regulatory compliance, make
                                                                                sustainable improvements for the community and continue
     Management Program                                                         its on-going effort to respect the environment, IOC’s
                                                                                government-approved TMP will result in an improvement
     – a new environmental                                                      in Wabush Lake’s visual amenity and a decrease in iron
                                                                                levels, eliminating the lake’s red colouring and returning
     and social legacy.                                                         it to a state where recreational use by the community
                                                                                will be possible.

                                                                                Through a process called flocculation, commonly used in
     CASE STUDy                                                                 municipal water treatment facilities, IOC will successfully
                                                                                confine the tailings within a naturally occurring deep trench
     Since 1999, IOC has been engaging                                          and ensure a high level of environmental protection. The
     the greater Labrador City community                                        non-toxic tailings – consisting of fine iron stained quartz
                                                                                particles suspended in the lake water column – stick to flocs,
     on a continuous basis in order to integrate                                and form flake-like particles that will settle to the deepest
     feedback and concerns into the development                                 part of the lake. As flocculated tailings deposits will not
                                                                                spread naturally across the lake bottom, controlling their
     of the benchmark Tailings Management                                       dispersal through flocculation is key to confinement.
     Program (TMP).
                                                                                The $120-million program took many years of effort (initial
                                                                                TMP was 1999, the revised TMP and subsequent revisions
                                                                                date back to 2002), consultation and planning, and goes
                                                                                beyond the requirements of government regulations and
                                                                                the expectations of the community. IOC has also created a
                                                                                new ecosystem that spans about 540 hectares with more to
                                                                                come, and will continue its successful annual rehabilitation
                                                                                of a minimum of 15 hectares of mill tailings areas through
                                                                                wetland and pond construction. Successfully developing
                                                                                these wetlands in low lying areas into a mosaic of wetland
                                                                                basins, riparian zones and uplands using native plants
                                                                                to promote a species of diverse vegetation, thousands of
                                                                                hectares of “new habitat” will continue to be developed
                                                                                by IOC over the next 40 years.

38   Julien Vallières does his part during Environment Week in Labrador City.
Birdwatch                                                               Montreal Head Office Recycling

Twenty-seven people (IOC employees and families)                        In the ongoing effort to make a significant contribution
attended this year’s birdwatch event that commenced at                  to IOC’s environmental activities, the Montreal Head Office
Petit Hâvre de Matamek on the North Shore, near                         recycled an estimated 1.62 tonnes of paper in 2007.
Sept-Îles. Two guides from the Matamec’s Amory-Gallienne
Corporation led watchers on a two-hour scenic hike in                   Radisson Scout Troop
the boreal forest and along the Matamec River.                          In preparation for the Quebec Games 2007, the local Scout
                                                                        troop cleaned the wooded grounds of Sept-Îles’ College
                                                                        – the designated location for the archery competition. IOC
                                                                        gave $2,000 to the Scouts as well as safety glasses, gloves
                                                                        and garbage bags. The group spent several hours cleaning
                                                                        the area and collected two dump trucks worth of garbage.

Caroline Cloutier – guide – gives information regarding specific bird
species to IOC employees and their families.

Environment Festival
Sept-Îles’ Environmental Protection Corporation (CPESI)
                                                                        The Radisson Scout Troop worked hard to clean the site in preparation
celebrated its second annual North Shore Environment
                                                                        for the Quebec Games.
Festival in April 2007. The Corporation aids young
innovators in the creation of events that further the
protection of the environment and educate the public.                   Railway Car Refurbishing
This year’s festival featured films, presentations, conferences,        Refrigerated car 1557 – the worst car in the fleet – was
photo exhibits, information kiosks and more, all focused                refurbished in 2007. With refrigeration replacement, some
on highlighting local nature and preserving the balance                 electrical work, the improvement of airtightness and a start
of various ecosystems.                                                  & stop engine, the car is now the most reliable and its diesel
                                                                        consumption has fallen by 83%. More cars are planned for
                                                                        refurbishing in 2008 as well as the possibility of replacing
                                                                        generator car 1600 with something smaller that consumes
                                                                        less diesel and is tailored to IOC needs.

                       Envirothon 2007
         Environment   Envirothon is a challenging event that encourages teamwork,
                       public speaking and understanding of Newfoundland
                       and Labrador’s natural resources to teams comprised of
                       five high school students and a teacher sponsor. Students
                       study themes related to aquatic ecology, soils and land use,
                       wildlife, forestry and a current environmental theme.
                       In 2007, a team from Labrador City’s Menihek High School
                       won the Team Spirit Award, in memory of Dr. Neil Simon.
                       IOC’s HSE department donated $2,000.

                                                                                      Menihek High School team presented with Dr. Neal Simon
                                                                                      Team Spirit Award.

                                                                                                                          Targets & Performance
                                                             Achieved          Partially Achieved         Not Achieved

Indicator                    2007 Target                    Target Achieved                2008 Target
Air Quality
Sept-Îles ambient            Procurement and                 Deferred to 2008.             Procurement and
air quality (AQ) monitors    installation of AQ                                            installation of AQ
                             instrumentation within the                                    instrumentation within the
                             local community.                                              local community.
Sept-Îles stack emission     Conduct point source            Stack testing completed.
testing                      emission testing at the
                             dumper facility.
Sept-Îles plume dispersion   Conduct plume dispersion        Deferred to 2008.             Conduct plume dispersion
model                        model for facility using the                                  model for facility using the
                             2006 point source emission                                    2007 point source emission
                             data set.                                                     data set.
Sept-Îles fugitive emissions Evaluate options identified     Engineering study             Evaluate new options
                             in 2006 for control of          completed in late 2007.       from engineering study
                             fugitive emissions at the                                     completed in 2007.
                             bentonite unloading.
Carol Project PM2.5          Relocate the continuous         Deferred to 2008 as           Assess need to relocate
                             PM2.5 (TEOM) in the third       per agreement with            based on plume dispersion
                             quarter of 2007.                government. Awaiting          model results.
                                                             final report from 2007
                                                             stack testing.
Carol Project Dispersion     Conduct plume dispersion        Deferred to 2008.             Conduct plume dispersion
Model                        model using the 2007            Request for Proposal          model using the 2007
                             point source emission data      completed and contract        point source emission data
                             set. Conduct point source       awarded in 2007 to            set. Conduct point source
                             emission testing for select     preferred consultant.         emission testing for select
                             sources.                        Still awaiting final report   sources.
                                                             on stack testing.
Carol Project dust control   Install permanent dust          System installed and          Complete modification of
trials                       control system.                 commissioned but              dust control system and
                                                             technical problem             commissioning.
Carol Project small          Complete phase II of            Relocation program
mammals study                the relocation program          phase II completed.
                             to determine degree of
Carol Project partnerships   Develop framework for an        Deferred to 2008.             Develop framework for an
with external stakeholders   IOC biodiversity strategy                                     IOC biodiversity strategy
                             in line with corporate and                                    in line with corporate and
                             Mining Association of                                         Mining Association of
                             Canada guidelines.                                            Canada guidelines.
Sept-Îles bird survey        Conduct public birdwatch        Birdwatch events              Conduct public birdwatch
                             events and construct            conducted. Two osprey         events in Sept-Îles and
                             and install osprey              platforms installed in        Labrador City. Construct
                             nesting platform for both       Labrador City. Support        and install osprey nesting
                             Sept-Îles and Labrador          provided to Eastern           platforms in Sept-Îles and
                             City. Provide funding           Habitat Joint Venture         along QNS&L railway.
                             and support to Eastern          for construction and          Install some common
                             Habitat Joint Venture           distribution of common        goldeneye nest boxes
                             for construction and            goldeneye nest boxes.         around the property in
                             distribution of nest boxes                                    Labrador City.
                             across Newfoundland and
                             Labrador for common

Targets & Performance
                        Environment                                                                 Achieved         Partially Achieved         Not Achieved

                                      Indicator                     2007 Target                    Target Achieved               2008 Target
                                      Contaminated Sites
                                      Carol Project fuel storage    Demolition and removal of       Old Lorraine Camp
                                      facilities                    the old Lorraine Camp.          demolished and
                                      Sept-Îles new sites           Agree with Quebec               Scope of work agreed
                                                                    government on scope of          with government and
                                                                    work regarding obsolete         underground pipeline
                                                                    underground fuel pipeline       removed.
                                      Sept-Îles remediation         Assess options for              Options assessed.
                                      facility                      contaminated soil
                                                                    remediation along the
                                                                    railway corridor.
                                      Sept-Îles bulk fuel storage   Assess options for              Additional site              Proceed with rehabilitation
                                      facilities                    contaminated soil               characterization done        work.
                                                                    remediation.                    and options assessed.
                                      Energy Efficiency and Greenhouse Gases
                                      Energy consumption            Continue to meet the            Slight setback in Energy     Continue to meet the
                                                                    corporate energy efficiency     efficiency and GHG           Rio Tinto corporate targets
                                                                    and GHG intensity reduction     intensity reduction in       in support of the Rio Tinto
                                                                    targets as part of the          2007; however, progress      2003-2008 plan by achieving
                                                                    Rio Tinto 2003-2008 Plan.       made to date puts IOC        a 1% reduction in energy
                                                                                                    in an excellent position     efficiency and GHG intensity.
                                                                                                    to achieve its targets
                                                                                                    (5% reduction) as per
                                                                                                    the 2003-2008 Plan.
                                      Locomotive fleet              Conduct diesel fuel additive    Diesel fuel additive trial   Investigate causes of
                                                                    trial for the IOC locomotive    put on hold due to major     problems encountered
                                                                    fleet.                          technical problems           at other sites and make
                                                                                                    encountered at other         recommendations.
                                      Haul truck fleet              Assess use of diesel fuel       Use of diesel fuel additive Implement diesel fuel
                                                                    additive for the haul truck     assessed for haul truck     additive program for haul
                                                                    fleet.                          fleet.                      truck fleet.
                                      GHG emissions                 Begin three-year Climate        Three-year Climate           Continue Climate Change
                                                                    Change Program.                 Change Program begun.        Program.
                                      ISO 14001
                                      Sept-Îles certification       Maintain ISO 14001:             Certification maintained     Maintain ISO 14001:
                                                                    2004 certification.             through external audits.     2004 certification.
                                      Carol Project certification   Maintain ISO 14001:             Certification maintained     Maintain ISO 14001:
                                                                    2004 certification.             through external audits.     2004 certification.
                                      Land Reclamation
                                      Carol Project                 Rehabilitate minimum of         Thirty-four hectares of      Rehabilitate minimum of
                                      Land Rehabilitation           15 hectares of the inactive     the inactive tailings area   15 hectares of the inactive
                                                                    tailings area.                  rehabilitated.               tailings area.
                                      Land Use Management           Linkage being made              Land Use Management          Complete stakeholder
                                      Plan                          to closure plan and             Plan developed and           consultation on land use
                                                                    SD framework.                   stakeholder consultation     zoning and closure plan
                                                                                                    undergone.                   and finalize linkage to Land
                                                                                                                                 Use Management Plan.

                                                                                                                     Targets & Performance
                                                           Achieved         Partially Achieved       Not Achieved

Indicator                   2007 Target                   Target Achieved              2008 Target
Tailings Management
Regulatory approvals        Construction completion        Regulatory approvals        Complete full
                            and commissioning by           received and construction   commissioning of TMP
                            June 2007 of the Tailings      phase completed in third    by September 2008.
                            Management Project.            quarter 2007 – delay was
                                                           due to impact of labour
                                                           action in first quarter
Water Efficiency
Carol Project reduce        Continue to meet               While the volume of         Continue to meet the
freshwater withdrawal       the Rio Tinto corporate        freshwater withdrawn        Rio Tinto corporate water
                            water efficiency targets       in 2007 was reduced, the    efficiency targets in
                            in support of the              rate at which freshwater    support of the Rio Tinto
                            Rio Tinto 2003-2008            was withdrawn (L/tonne)     2003-2008 program.
                            program.                       increased.                  Contribute to the corporate
                                                                                       post-2008 water target
                                                                                       setting program.
Sept-Îles municipal water   A team was chartered           Some options were           Install flow meters to help
supply                      to identify options.           identified.                 identify high water use
                                                                                       sectors and opportunities
                                                                                       for reduction. Complete
                                                                                       feasibility studies on
                                                                                       options identified and make
Waste Management
Carol Project               Continue program of            Program of recovery         Continue program of
                            recovery of used oil to        of used oil continued.      recovery of used oil to
                            provide an alternate energy                                provide an alternate energy
                            source to the pellet plant                                 source to the pellet plant
                            induration process.                                        induration process.
Household Hazardous         Sponsor Household              Household Hazardous         Sponsor Household
Waste Program               Hazardous Waste Day            Waste Day was held          Hazardous Waste Day
                            in Labrador City and           in Labrador City and        in Labrador City and
                            Sept-Îles.                     Sept-Îles                   Sept-Îles.

           Considering the World

           in Our Financial

                         CSL ship leaves Sept-Îles with IOC products.
                                                               Contributions of capital projects are now being
                                                               assessed under elements like:
                                                               Physical Environment Stewardship: Efficiency
                              Maurice McClure                  of utilization of natural resources and adverse
                              General Manager – Finances       physical environmental impacts.
                              Iron Ore Company of Canada
                                                               Social Well-Being: Protection of social health
We’ve made a strategic commitment at IOC                       and safety and engagement with local
to align our business to promote economic                      Economic Development: Shareholder value
growth with a collaborative relationship                       creation and sustainable contribution to local
                                                               and regional development.
between all stakeholders – shareholders,
employees and their communities,                              With this more clearly defined framework serving as a
governments and customers. This is                            guide, the economic activities of IOC take on a new, more
                                                              sustainable dimension.
consistent with our vision of sustainable
development.                                                  Maximize shareholders’ return on investment
                                                              At IOC, we’re committed to creating value for our
                                                              shareholders by looking for growth opportunities
 Our aim is to create long-term business value                and improving the efficiency of our operations, while
 with specific goals:                                         maintaining a high level of corporate governance.

 Maximize shareholders’ return on investment                  A) Operations improvement
 by continuously improving the operations and                 ‘Improving Performance Together’ (IPT) is a Rio Tinto
 exploiting growth opportunities while maintaining            initiative designed to boost business results by increasing
 the leadership of the company in the competitive             collaboration and sharing best practice. We’re an asset
 global market.                                               intensive operation with more than $1 billion invested
 Ensure long-term viability of the business with              in our equipment, so applying sound Asset Management
 ongoing resource development programs to secure              practices is critical to the ongoing success of the business
 long-term ore reserves.                                      and ultimately, a secure future.
 Contribute positively to local and regional
 economic development in providing skilled and                 IPT – Five key ingredients
 attractive jobs in Labrador City and Sept-Îles and
 by encouraging local supply of goods and services.            1. Leadership support and commitment
 Promote strong customer relationships through                 2. Employee involvement
 proactive engagement and the delivery of high                 3. Sharing best practices across the company
 performance, quality products and outstanding
                                                               4. Building on proven solutions
 service to our customers.
                                                               5. Sustainability
These goals guide our daily operations and they’re embedded
in the company business decision-making process. One
example is the sustainable development analysis that is now    IPT on the ground
an integrated and important part of the company capital
                                                               Progressing in the mine and will extend into
expenditures approval process. And all proposed capital
                                                               the plant areas.
projects are being evaluated to make sure they contribute
to the company’s sustainable development commitment.           Optimizing maintenance procedures.
They’re reviewed with a focus on maximizing their lasting      Maximizing equipment life by ensuring
benefits and minimizing any adverse impacts on our             its reliability and cost-effectiveness.
environments, and we’re talking about the whole scope:
social, human, economic and physical environments.             Identifying and solving major causes of loss
                                                               in the business.
                                                               Using the best and cleanest fuels and oils.
                                                               Developing optimum predictive and preventative
                                                               maintenance tasks to ensure equipment meets
                                                               expected performance levels.

Economic   As part of the IPT initiative, IOC started to roll out the Lean   Contributions to economic development
           production system in 2007 in the concentrator (based on           We’ve always been an important player in the economy
           the Toyota operating philosophy) to better engage employees       of both Labrador West and Sept-Îles. Even though indirect
           in improving the business. At its simplest level, Lean is the     benefits are difficult to measure, we find the direct economic
           pursuit of waste elimination; waste being anything that           benefits from our operations are evident.
           a customer would not be willing to pay for. Eliminating it
           means that every employee needs to be aware, engaged, and
           actively involved in ensuring we work using best practices.        2007 direct economic benefits
                                                                              $202 million on employee wages and benefits
           And to support the initiative, we’re giving employees formal
           training sessions on Lean as it’s deployed in each area of         $227 million in municipal, provincial
           the business. The majority of the training is action oriented,     and federal taxes
           which means hands-on and in the field, teaching the tools          $165 million in capital expenditures
           and techniques and how Lean fits with other IOC core
                                                                              $3.4 million in direct community and educational
           B) Expansion projects                                              39,800 hours of employee training
           Over the last few years, we’ve been consistently increasing
           the concentrate production mainly by streamlining the
           process and de-bottlenecking the operation systems.
                                                                              2007 distribution of operating cash
           In 2007, IOC completed a feasibility study leading to the
           approval in early 2008 of the $500 million – 22 Mtpa
           concentrate expansion project. The investment is the first
           phase of an expansion program that might see production
           capability increase 50% by 2011.

           The decision to go ahead with the expansion project is a
           real vote of confidence in our ability to maintain improved
           performance following the recent achievement of a five-
           year collective agreement. We have outstanding product
           quality and a solid commitment to meeting our global
           customers’ varied recipes, and these help ensure our success
           in this highly competitive market. This represents a major
           achievement for both IOC and Rio Tinto.

           Beyond the economic aspect of it all, IOC met with the
           Community Advisory Panels in Labrador City and Sept-Îles
           to discuss the project. The information gathered from the
           panels formed the basis of our social assessment. Feedback
           was mostly positive and some of the issues raised have been             Suppliers 35%
           incorporated or looked into.                                            Employees 18%
                                                                                   New equipment 15%
           Rio Tinto has been demonstrating its commitment to these
           communities by supporting long-term viability, and plans                Government 11%
           are in the works to accommodate this growth by doing things             Shareholders 11%
           like increasing affordable housing and addressing the need              Other costs 10%
           for support services.

           Ensure long-term viability of the business
           IOC has an ongoing multi-million dollar Resource
           Assessment Program (RAP) focused on diamond drilling
           and ore characterisation on targeted zones to provide
           the company with a reserve base to support 40 years
           of operations and beyond.

IOC operates 24 hours a day, 365 days a year.

A significant proportion of goods and services purchased   Customer relationships
by IOC is secured within the provinces of Quebec and       IOC re-entered the Direct Reduction (DR) market in 2007
Newfoundland and Labrador.                                 by supplying its low-silica DR grade pellet to customers
                                                           in Trinidad and Saudi Arabia. Operating results in the
                                                           customer's DR modules using IOC's pellets has been
   2007 goods and services purchased by IOC                outstanding and both customers are impressed with the
                                                           quality of the pellets. This has been a real success for IOC
                                                           as it will increase its presence in this high value market.

                                                           “With the strong
                                                           markets and our
                                                           existing workforce
                                                           and operations
                                                           seeing improved
       Quebec 44%
                                                           results already, we're
       Newfoundland and Labrador 30%
       Rest of Canada 12%
                                                           looking forward to
       USA 12%                                             an exceptional 2008
       International 2%
                                                           from a financial and
                                                           economic point
                                                           of view.”

                                                           Maurice McClure
                                                           General Manager – Finances

                                                           Iron Ore Company of Canada
                    Chamber of Commerce of Sept-Îles                                          Hydro Quebec/IOC Transfer of Menihek Power System
         Economic   Honors Builders and Pioneers                                              This historical agreement between NL Hydro, Hydro-Quebec
                    Organized by the Sept-Îles Chamber of Commerce, an event                  and IOC was reached in October 2007. NL Hydro now owns
                    honouring the city’s builders was held to celebrate their                 the Menihek Power Station and associated infrastructure in
                    50 years of operations. Both IOC and QNS&L received                       Labrador, and Hydro-Quebec owns the Power Transmission
                    awards with Michael J. Shannon, former Vice President                     and Distribution Network to and in the Towns of Schefferville
                    – Operations and Engineering and Louis Gravel, General                    and Kawawachikamach and the associated infrastructure
                    Manager – Product Delivery, accepting the certificates                    in Quebec. Both hydro corporations have entered into a
                    of accomplishment for the companies.                                      40-year power purchase agreement.

                    Michael J. Shannon, former Vice President – Operations and Engineering,
                    Louis Gravel, General Manager – Product Delivery and Maurice McClure,
                    General Manager – Finances attended the event.
                                                                                              Menihek hydroelectric installations.

                                                                                              President & CEO at Labrador City
                                                                                              and Sept-Îles Chamber of Commerce
                                                                                              Every first quarter, Terence F. Bowles, President and CEO
                                                                                              of IOC, meets with the Chambers of Commerce in Labrador
                                                                                              City and Sept-Îles to update members on IOC’s performance.
                                                                                              This year, some topics discussed were safety improvements
                                                                                              over 2005, a good 2006 market, pellets and concentrate
                                                                                              production, cost concerns and good financial results that
                                                                                              enabled investment in areas such as new equipment and
                    Representatives from all honoured companies.
                                                                                              employee development. IOC’s plans for the upcoming years
                                                                                              were presented including the expansion project.
                    CIM Conference – Montreal
                    IOC and Rio Tinto played a major role at the 2007 Canadian
                    Institute of Mining, Metallurgy and Petroleum Conference
                    in Montreal. Considered to be the single most important
                    Canadian mining industry gathering, this event brought
                    together thousands of representatives from across Canada
                    and around the world. In addition to the technical program,
                    which allowed participants to share best practices and
                    discuss sustainable development and energy management,
                    we sponsored the plenary session, which was chaired by
                    Terence F. Bowles, IOC President and CEO.

                                                                                              Terence F. Bowles, president and CEO, making his presentation
                                                                                              in Sept-Îles.

                    IOC President and CEO, Terence F. Bowles led the Plenary Session

                    at the National CIM in Montreal.
RDV Grandes Entreprises                                            Smokey Mountain Ski Hill

Organized by the mayors of the region (Sept-Îles, Baie-Comeau,     Smokey Mountain Ski Hill in Labrador City saw major
Port-Cartier, Havre St-Pierre), large companies like IOC, Québec   improvements over the last year in its financial performance
Cartier Mining Company, Alouette and QIT-Fer et Titane             due to the hard work of IOC accountant Jeff Young who
were invited to make a presentation on their activities            generously donated his time and skills, and IOC’s support.
and concerns for the next five years. Municipalities,              The business’ total net improvement in net working capital
governmental organizations and small businesses were               was $61,956.82.
informed of what to expect and how they can help
by supplying services and resources.

Sept-Îles Port Authority Annual Presentation
The Sept-Îles Port Authority holds an annual gathering
to give an assessment of the previous year to Sept-Îles’
business community and media as well as present images
of the first ship of the year. In 2007, participants celebrated
the 20th anniversary of the first ship, which was filled with
over 70,000 tonnes of IOC iron ore pellets destined for
Taiwan. IOC went aboard to offer a gift basket filled with
promotional articles and regional products. Louis Gravel,
General Manager – Product Delivery, highlighted the
new base for Eastern Canada Towing tugboats and other
Port traffic: Monseigneur Blanche Quay.

Louis Gravel, General Manager – Product Delivery, highlighted
the new base for Eastern Canada Towing tugboats and other
Port traffic: Monseigneur Blanche Quay.

 2007 IOC statistics & financials    IOC 2007 statistics
                                                                                                                                      2005         2006         2007
                                     Labrador City                                                                                    1,256        1,350        1,451
                                     Sept-Îles                                                                                         477          511          484
                                     Montreal                                                                                           18           25           29

                                     Salaries (including benefits)                                                                $ 187.0M     $ 205.0M     $202.0M

                                     Employee training (employee hours)                                                           38,822 h     35,308 h     39,810 h

                                     Sales1                                                                                       $ 1,123M     $ 1,062M     $ 973M

                                     Labrador City mine production (calculated in tonnes of crude ore)                             37.8 mt         39 mt     32.3 mt
                                     Labrador City production of concentrate                                                       16.2 mt      16.9 mt      13.9 mt
                                     Labrador City production of pellets                                                           13.3 mt      12.7 mt      11.3 mt
                                     Terminal (number of vessels loaded)                                                               226          231          195

                                     Reserves and resources (saleable product tonnes)2
                                     Ore Reserves                                                                                 426.8 mt     415.5 mt     537.5 mt
                                     Mineral Resources                                                                           1,433.0 mt   1,370.6 mt   1,449.4 mt

                                     Community investments
                                     Contributions in education and community projects                                            $   2.2M     $   3.4M     $   3.4M

                                     Municipal (grants, school taxes) Labrador City                                               $   4.4M     $   4.6M     $   4.6M
                                     Municipal (grants, school taxes) Sept-Îles                                                   $   3.9M     $   3.9M     $   3.8M
                                     Provincial – NL                                                                              $ 62.5M      $ 70.0M      $ 59.0M
                                     Provincial – Quebec                                                                          $   3.3M     $ 26.0M      $ 18.6M
                                     Federal                                                                                      $ 42.0M      $175.0M      $ 141.0M
                                           Impacted by a ten-week strike in 2007.
                                           Reserves and resources expressed as Saleable Product tonnes
                                           (concentrate for sales + pellets).
                                           Source: IOC internal report “2007 Report of Ore Reserves and Mineral Resources”.
                                           Saleable product listed in the 2007 Rio Tinto annual report as approved for release
                                           by IOC’s Competent Persons: Tim Leriche P. Eng., Mark Blake P. Geo., and
                                           Andrew Knight P. Eng.

                                    The Rio Tinto Group’s objective is to maximize its value and
                                    the long-term return to shareholders through a strategy of
                                    investing in large, cost competitive mines and businesses
                                    driven by the quality of each opportunity. Read through
                                    financial and production figures, which are reported
                                    through Rio Tinto’s annual report at:

                                                                                                    2007 IOC statistics & financials
Delivery ratio                                  Source of Labrador City new employees, 2002-2007
90% of deliveries come from local vendors

    Labrador 65%                                    Labrador West 54%
    Quebec North Shore 24%                          Newfoundland 19%
    Canada 5%                                      “Coming home”
    USA 2%                                          to Newfoundland and Labrador 15%
    Montreal 2%                                     Other 12%
    Quebec 1%

Order ratio                                     Source of Sept-Îles new employees, 2002-2007
40% of all orders value goes to local vendors

    Labrador 29%                                    Sept-Îles and Quebec North Shore 78%
    Montreal 29%                                    Quebec 16%
    Canada 12%                                      Other 6%
    Quebec North Shore 10%
    USA 7%
    Quebec 5%
    Newfoundland 4%
    International 3%

sponsored by IOC in 2007
                           Community organisms/events   Sports                                           Health & Welfare
                                                        24 heures de badminton                           Association de la Fibrose kystique
                                                        C.O.F.J.Q. – Jeux du Québec                      Association du cancer de l’Est du Québec –
                                                                                                         Relais pour la vie
                                                        Carol Curling Club
                                                                                                         Association Générations
                                                        Club de golf Ste-Marguerite
                                                                                                         Canadian Cancer Society – Relay for Life
                                                        Club de hockey des anciens de Pointe-Claire
                                                                                                         Carol Lake Nursery School
                                                        Club de soccer Nord Soc
                                                                                                         Centennial Regional High School (Greenfield Park)
                                                        Club Richelieu Montréal
                                                                                                         Centraide Duplessis
                                                        Hockey Côte-Nord (féminin, coupe Dodge 2006)
                                                                                                         Centraide Montréal
                                                        Hockey IOC – Tournoi des entreprises
                                                                                                         Centre d’Action Bénévole
                                                        Innu Open
                                                                                                         Centre d’intervention et de prévention du suicide
                                                        Labrador City Rowing Team
                                                        Labrador West Association for Community Living
                                                                                                         Children’s Wish Fund
                                                        Labrador West Chamber of Commerce Golf
                                                                                                         Collectif de Sept-Îles pour la santé des femmes
                                                                                                         Éki-Lib Santé Côte-Nord
                                                        Labrador West Minor Hockey Association
                                                                                                         Fondation canadienne des maladies inflammatoires
                                                        Labrador West Regatta
                                                                                                         de l’intestin
                                                        Menihek Nordic Ski Club
                                                                                                         Fondation du CHRSI
                                                        Rotary Club of Labrador City/Wabush
                                                                                                         Fondation Marie-Vincent
                                                        Smokey Mountain Ski Club
                                                                                                         Fondation Mira
                                                        Station de ski Gallix
                                                                                                         Grenfell Foundation
                                                        Tamarack Golf Club
                                                                                                         Labrador Prostate Cancer
                                                        Team Gushue
                                                                                                         Labrador West Food Bank Outlet
                                                        Tournoi de balle Amicale de Sept-Îles
                                                                                                         Labrador West Healthy Coalition Committee
                                                        Tournoi de curling des ainés
                                                                                                         Labrador West Young Peoples Association
                                                        Tournoi Fer-O
                                                                                                         Le Centre Action – Montréal
                                                        Tournoi hockey Karl Dykhuis
                                                                                                         Maison Michel-Sarrazin
                                                        Town of Labrador City (Olympians Visit)
                                                                                                         Montreal Children’s Hospital
                                                        Veterans Team IOC – Ride for Youth
                                                                                                         Montreal General Hospital Foundation
                                                        Volleyball Amitié d’été
                                                                                                         MRC de Sept-Rivières
                                                        White Wolf Snowmobile Club
                                                                                                         NL Industrial Health & Safety Association
                                                        Work-Out World
                                                                                                         Opération Enfant Soleil
                                                                                                         Royal Canadian Legion
                                                                                                         Royal Newfoundland Constabulary
                                                                                                         Sainte-Justine Hospital
                                                                                                         Sclérose en plaques Québec
                                                                                                         Women’s Center in Labrador City

                                                                                                               sponsored by IOC in 2007
                                                                                                                                          Community organisms/events
Social & Cultural                                       Quebec Engineering Competition
Alpha-Lira Sept-Îles                                    Répit Richelieu
Association de protection de la rivière Moisie (APRM)   Salle de spectacle Sept-Îles
Association touristique de Sept-Îles                    Salon du livre de la Côte-Nord
Association touristique régionale                       Salon Jeunesse Côte-Nord
Cain’s Quest                                            Scout Troupe Radisson
Captain William Jackman Memorial Hospital               Skills Canada
Carol Bérubé, peintre                                   SOAR Chapter SA2
Carrefour Emploi-Jeunesse de Duplessis                  Souper de Noël En toute amitié
Club de l’âge d’or de Sept-Îles                         St. Edmund’s Parish
Club Lions de Sept-Îles                                 Steelworkers Organization of Active Retirees
Club Optimiste de Sept-Îles                             The Royal Canadian Legion
Comité ZIP Côte-Nord du Golfe                           Tournoi Orange Alouette
Communauté de Uashat Mamit Mak Maniutenam               Town of Labrador City
Compétition provinciale des pompiers 2007               United Steelworkers 5795
Corp de protection de l’environnement de Sept-Îles      Vieux Quai en Fête – IOC
CPE Sous le bon toit                                    Western Newfoundland Model Forest Inc.
Crystal Meth Event
District scout de l’épinette
École Queen Elizabeth                                   Mining, Railway & Maritime Events
Fondation du cégep de Sept-Îles                         Association minière du Québec
Fondation LOISIRS Côte-Nord                             Atlantic Regional Railway Association
Fonds des personnes incarcérées                         Atlantic Women in Law Enforcement Training
Gala des entreprises                                    Bleu voile océanique
Gesù : spectacle bénéfice                               CIM National
Groupe de la Veillée                                    CIM Newfoundland
Groupe Scouts et guides Sept-Îles inc.                  Corporation de promotion de développement
                                                        Minéral de la Côte-Nord
                                                        Fonds régional d’exploration minière de la Côte-Nord
Joyeux Retraités (IOC/QNS&L)
                                                        Foyer des marins – Tournoi de golf
Knights of Columbus
                                                        ICM Québec
Labrador City Lions Club
                                                        Newfoundland and Labrador Hydro
Labrador Girl Guides
                                                        Town of Labrador City
Labrador West Food Bank
Labrador West Ministerial Assocation
Labrador West Music Festival                            Education
Labrador West Tourism Development Corporation           College of the North Atlantic
Labrador West Youth Center                              Éducaide
Le Pays dans le pays                                    Jeux de Génie du Québec
MUN School of Music                                     Junior Achievement
NCSM Jolliet                                            Maison Alouette (MOCSI)
Opération Fée des Étoiles                               McGill-Queen’s University Press
Orchestre symphonique de Montréal                       Memorial University
Ordre des ingénieurs du Québec                          Menihek High School
Ordre du Mérite Nord-Côtier                             Polyvalente Manikoutai
Place aux Jeunes                                        Université Laval
Production Innu Nikamu
Protected Areas Association of Labrador West

Additional information
can be found on IOC’s website at
and Rio Tinto’s website at

For inquiries or comments
on this Report, please contact:

Sept-Îles                          Labrador City                 Montreal
Communications                     Communications                Communications
& External Relations               & External Relations          & External Relations
Iron Ore Company of Canada         Iron Ore Company of Canada    Iron Ore Company of Canada
1 Retty Street                     P.O. Box 1000                 1000 Sherbrooke Street West,
Sept-Îles, Quebec                  Labrador City, Newfoundland   Suite 1920
G4R 3C7                            and Labrador                  Montreal, Quebec
                                   A2V 2L8                       H3A 3G4
Tel: 418 968-7400, #7655
iocrelationssi@ironore.ca          Tel: 709 944-8400, #8462      Tel: 514 285-8413
                                   iocrelationslab@ironore.ca    iocrelationsmtl@ironore.ca

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