Environmental Management Sustainability Report 2007 Material Balance The Kobe Steel Group strives to be environmentally responsible in all of its diverse business activities and is committed to the efficient use of energy and the recycling of resources. Utilization of Energy and Raw Materials by the Iron & Steel Sector The Iron and Steel Sector accounts for about 95% of all energy used by Kobe Steel, and consumed 201PJ in 2006. To maximize efficiency, we take almost all of the byproduct gases generated by different stages of the manufacturing process such as coke oven gas, blast furnace gas, and converter gas and effectively reuse them as fuel for the reheating furnaces at the rolling mills and the in-house power generation plants. We also actively reuse recovered waste heat to generate electricityr. As a result of these efforts, approximately 70% of the electricity used in the manufacturing process is generated by byproduct gases and waste-heat recovery. We also recycle 97% of the other byproducts of the manufacturing process, such as slag, dust and sludge, as raw material for cement, paving material, and other applications. We will continue working to improve the efficiency of our energy and raw material use and engage in further technical development so that we can continue to manufacture our products while taking proper care of the environment. Energy and Raw Material Use by the Iron & Steel Sector in FY2006