Above: Students from Erskineville Public School in Sydney, NSW celebrate the launch of the Tank a Day Challenge.

Our Bond guides us to respect the communities where we operate. Our communities are our homes. In 2006/07, environmental issues such as greenhouse gas emissions and water scarcity remained matters of public concern. We are responding with a number of programs and initiatives that represent industry leading environmental practice.

In May, BlueScope Steel launched the Tank a Day Challenge. This program will see us donate 200 water tanks to Australian primary schools - one tank for each day of the primary school year. BlueScope Steel will also share its expertise in rainwater harvesting and water management, helping schools to minimise storm water run-off, reduce their reliance on mains water systems, and cut school water bills. The project is designed to initiate water conservation programs in schools, and help imbue a generation of young Australians with a water saving philosophy.

During the year we invested in major water saving projects at Port Kembla Steelworks and Western Port. Our water recycling initiative at Port Kembla Steelworks, in conjunction with Sydney Water, has celebrated the use of five and a half billion litres of recycled water. In the past 10 years, the Port Kembla operation has halved its fresh water consumption, significantly reducing its reliance on local water supplies. Ninety-eight per cent of the water we use in steelmaking at Port Kembla is now either salt or recycled water.

Above: Slab being water-cooled at Port Kembla Steelworks. 98 per cent of water used at the facility is either salt or recycled water.

Above Right: Dennis Cavagna, Managing Director of South East Water, former Victorian Water, Environment and Climate Change Minister John Thwaites, and Managing Director and CEO Kirby Adams are surrounded by media at the announcement of a $21 million water recycling project at our Western Port facility.

In 2006/07, we also announced a $21 million water recycling project to supply our Western Port plant, in partnership with the Victorian Government and South East Water. This project will reduce Western Port's fresh water use by over 60 per cent, or 660 mega litres per year - equivalent to the annual water consumption of around 3,000 homes. The project, which involves the installation of a new 13 kilometre pipeline to take recycled water to our Western Port plant, will also reduce sewage discharge and landfill.

In the area of greenhouse gas emissions, we commenced a feasibility study into a major electricity co-generation project at Port Kembla Steelworks.

This project will involve building a power plant to generate electricity from the gases produced during steelmaking. The electricity will then be fed back into the state power grid. The co-generation plant would save around 800,000 tonnes of greenhouse gas emissions from entering the atmosphere each year. This is equivalent to taking 185,000 thousand cars off the road annually.

During the year, BlueScope Steel also signed a new five-year pollution reduction agreement for Port Kembla Steelworks. Recent work at Port Kembla, such as a project that captures and treats sinter plant gas and dust emissions, has drawn a positive community response.