Gerdau mills run to international environmental standards • The Gerdau Group produces steel with a commitment to the preservation of the air, water, soil and green areas of the regions where it operates. It invests in acoustic protection and in raising environmental awareness in the community. At all its mills, Gerdau follows international environmental practices, based on the principles of environmental efficiency and sustainable development. • The performance of each operation is monitored and evaluated by Gerdau's Environmental Management System, which allows for the management of results and the search for new standards of environmental performance. • In the last five years, Gerdau has invested US$ 100 million in environmental technology, of which US$ 15 million was spent in 2001. • All Gerdau's mills are equipped with highly efficient systems for the filtration of gases and solid particles produced during the steel-making process. • Process waters remain within the mills, being treated and recirculated through closed systems. The current recirculation rate averages 95%, which meets strict standards for the protection of water resources. Of the other 5%, some evaporates during steel production, and the rest is returned to the rivers with quality parameters that meet all regulatory requirements. In many cases the quality of the released water is higher than that of the intake water. • The largest scrap recycler in Latin America and one of the largest in the world, the Gerdau Group reuses 5.3 million metric tons of steel scrap per year, transforming this raw material into new steel products. • Gerdau employs rigorous scrap control and management systems, which reduce the levels of residue in the electric arc furnaces and result in greater energy efficiency. It also uses radioactivity detectors to protect the production process from radioactive contamination. • All Gerdau's industrial waste products are managed according to principles of reduction, reuse, recycling and controlled disposal. Historically, Gerdau has carried out scientific research in partnership with universities to find better ways of reusing mill slag, scale and dust in other productive activities. These by-products can be used in place of some raw materials, presenting certain advantages and reducing environmental impacts resulting from the extraction of these raw materials. • Mill slag is now widely used in road paving, replacing earth and gravel, while mill scale is used in the manufacture of cement. In 2001, new research projects were developed to study the use of mill dust as part of the clay used in the ceramic industry. • In 2001, Gerdau AZA became the first Chilean steel mill to receive the Federal Government's National Quality Award, in recognition of its integrated environmental and quality management. • In Canada, the province of Ontario granted Courtice Steel the Award of Excellence, in recognition of its use of gas generated from a sanitary landfill in Cambridge as an energy source in the rolling mill reheating furnace. This project was also nominated for the Steel Manufacturers Association Recycler of the Year Award. The Steel Manufacturers Association also recognized AmeriSteel for its rehabilitation of areas at its Florida mill. ENVIRONMENTAL IMPROVEMENTS New dust removal systems come on line at the Charlotte, Barão de Cocais and Divinópolis mills • In 2001, the main environmental investments were made at plants in Brazil, Chile, Canada and the United States. • Technological modernization of three dust removal systems has resulted in greater atmospheric protection at the Charlotte (USA), Barão de Cocais and Divinópolis (Brazil) mills, while MRM Steel (Canada) carried out improvements to its dust collection system. At Gerdau Laisa (Uruguay), approval was granted for the installation of new equipment which should be operational in 2003. • For the greater protection of water resources, effluent treatment centers were installed at Riograndense and expanded at Cosigua (both in Brazil). The water recirculation system at Gerdau AZA (Chile) was upgraded. • New controlled landfills increased protection of the soil at the Cosigua and Guaíra (Brazil) mills. Guaíra also benefited from the completion of a program to reduce noise from the rolling mill. Noise levels were also reduced in the scrap yard at the Charlotte mill. GREEN AREAS Gerdau is caretaker for a total of 7,200 hectares of green space • The Gerdau Group manages 7,200 hectares of green areas close to its mills. • In 2001, 3,800 native seedlings were planted to establish a grove in honor of Curt Johannpeter at Cosigua, in Rio de Janeiro. Curt Johannpeter led Gerdau during the decisive period of its expansion into steel-making. MRM Steel in Canada planted 1,800 seedlings of local species such as the Colorado blue spruce and the willow. • The Laisa mill in Uruguay increased its green area by another five hectares. ENVIRONMENTAL EDUCATION Community projects encourage environmental awareness • Gerdau takes part in raising environmental awareness in the community, by means of partnerships with universities and industry groups in the countries where it operates. • An innovative new training program was established in Brazil, in which more than 1,500 employees and suppliers learn scrap management techniques for industrial recycling. • "Project Germinate" at Açominas focuses on the environmental education of employees at the Ouro Branco mill, and of nearby communities. Since its implementation in 1990, the project has reached 25,000 students and 800 teachers. • MRM Steel has participated in the Adopt-a-Class Program since 1994, and has reached a total of 2,555 students at 11 Canadian schools. In partnership with the Lord Selkirk school division and Ducks Unlimited, the program includes a visit to the Oak Hammock Marsh National Headquarters for Ducks • Gerdau employees in the United States part in environmental awareness and nature preservation initiatives within the Community Action Team (CAT) volunteer program. These included Coastal Cleanup, the Mayor's Beautification Program and the Historic Tree Grove tree planting project at the Tampa Museum of Science and Industry, and the Wildlife on Easy Street program to protect wild cats.