Sustainability

Environmental Management

The production of manganese alloy and ferrosilicon is an inherently energy-intensive process rooted in a carbothermic reaction. In this reaction, carbon sources act as reductants for metal oxides. Various emissions, including carbon dioxide and particulate matter, are inevitably generated during the smelting process. In an era of global warming and the transition towards a low-carbon economy, we recognise that decarbonisation is not just a regulatory requirement, but a strategic necessity to mitigate transition risks. While climate change remains a key issue, our environmental stewardship extends to a broader spectrum of material issues critical to our industry. We remain vigilant in managing our resource use to minimise our ecological footprint, and ensure robust air and waste management processes to prevent pollution.

Climate Change

Climate change represents a significant global challenge with direct implications for the regulatory and operational landscape of the ferroalloy industry. OMH acknowledges these shifts and focuses on a pragmatic climate response centred on operational efficiency, regulatory compliance, and risk mitigation. We aim to align our processes with evolving environmental standards while maintaining our competitive position in a highly commoditised market.

Greenhouse Gas Verification

The Group conducted its annual independent verification of its GHG emissions for FY2025 at a reasonable level of assurance (10% materiality). The GHG inventory report was prepared in accordance with the requirements of ISO 14064-1:2018, the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard, and the Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Standard. The Group adopts an Operational Control consolidation approach to quantify its GHG emissions. The Group has identified FY2023 as its base year inventory, the first externally verified Group-level inventory.

Energy Management

Our production processes require consistent, high-intensity energy to sustain the extreme temperatures necessary for ferroalloys smelting. A core element of our resilience is OM Sarawak’s long-term power arrangement, a 20-year power purchase agreement with the State power utility that secures competitively priced, reliable electricity through to 2033. The predominance of renewable hydropower in the local grid mix gives the Plant a materially lower carbon intensity than peers that rely on coal-fired generation. We maintain this advantage by monitoring consumption against recognised benchmarks and using data to prioritise incremental, technically and commercially feasible efficiency measures.

Resource Use & Circular Economy

Embracing circularity is a key strategy for tackling climate change and mitigating broader environmental issues such as pollution and biodiversity loss. OM Sarawak focuses on optimising natural resource use by recycling and reusing most of its by-products as raw materials for production. This systematic approach allows us to close the loop on our industrial processes and reduce the demand for virgin inputs.

A primary example of this is the management of silicomanganese (SiMn) slag. Although it cannot be reused within our smelting furnaces, SiMn slag serves as an effective substitute for natural aggregates in the construction sector. We are proactively engaging with regulatory bodies, such as the DOE, to secure necessary permits and ensure full compliance as we continue to pursue avenues to repurpose SiMn slag. In FY2025, OM Sarawak expanded its collaboration with oil palm plantation companies in Sarawak to repurpose SiMn slag, following formal approval from the DOE.

Another example is silica fume recovery. Silica fume, also known as microsilica, is a high-value ultra-fine supplementary cementitious material captured as a by-product of ferrosilicon (FeSi) production. Characterised by its highly pozzolanic properties, silica fume is an essential additive in high-performance concrete, significantly enhancing compressive strength, density, and chemical durability. OM Sarawak employs a multi-stage filtration and densification system to maintain stringent emission controls while recovering this material. By utilising high-efficiency baghouse filters to capture particulate matter at source, we effectively turn off-gases into a commercial resource. To meet the rigorous technical demands of the global construction sector, OM Sarawak adheres strictly to ASTM C1240 standards. Furthermore, in 2024, OM Sarawak initiated the formal accreditation process for ISO/IEC 17025 for our specialised silica fume laboratory. We remain on track to complete the final compliance audit in 2026.

Air Emissions

Within the ferroalloy industry, air quality management focuses predominantly on the containment of fugitive emissions and particulate matter. OM Sarawak adopts a pragmatic, two-pronged approach to manage non-greenhouse gas emissions through the continuous optimisation of production processes and the deployment of advanced control technologies, such as bag filter systems. Our operations are controlled by a robust compliance framework aligned with the Environmental Quality Act 1974, the Environmental Quality (Clean Air) Regulations 2014, the Malaysia Ambient Air Quality Standard 2020, and the Arizona Ambient Air Quality Guidelines 1999. To ensure continued adherence to these regulatory benchmarks, OM Sarawak conducts regular Ambient Air Quality Monitoring.

Water & Effluents

Water is a critical input for our smelting operations, particularly for furnace system cooling and silica quartz washing. To maximise resource efficiency, OM Sarawak deploys a water recirculation system designed to minimise freshwater consumption. The cooling water used for our furnace system operates within a dedicated closed-loop system. In this set-up, water is continuously treated and recycled, with the only significant water loss occurring from evaporation in the cooling towers. For our silica quartz washing processes, we utilise a dedicated sedimentation pond. This set-up allows heavier particles and sediments to settle, enabling the treated water to be captured and reused within the washing cycle rather than being discharged.

OM Sarawak is committed to preventing water pollution by ensuring all effluent meets stringent regulatory water quality standards before discharge. Industrial effluent, typically generated from surface runoff, is managed through our on-site sedimentation ponds. These ponds remove suspended solids, reducing the environmental footprint of our discharge. Throughout FY2025, our discharged effluent consistently adhered to the permissible limits stipulated by the Environmental Quality (Industrial Effluent) Regulations, 2009.

Biodiversity & Ecosystems

OMH recognises the importance of responsible land management and biodiversity conservation in the regions where we operate. Our flagship smelting complex is located within a 3km radius of Similajau National Park, an area characterised by a diverse mixture of rainforests, mangroves, and beaches. Given this proximity, we are committed to managing our operational footprint to reduce and avoid adverse impacts on the local flora and fauna. To ensure the integrity of the surrounding ecosystem, OM Sarawak conducts Quarterly Environmental Monitoring, with reports submitted to the DOE.