Sustainability report

Assore seeks to promote the sustainability of its business by moving beyond mere legal compliance, encouraging constructive engagement with all stakeholders, including the regulatory authorities, and promoting responsiveness to customer needs and requirements as they evolve. Assore’s strategy is to continue taking an active role in shaping the development and performance of its business in the sectors in which it operates as well as supporting its management in anticipating and addressing current and future issues that may present opportunities or threats to the group’s business.

 

Introduction

This sustainability report covers all of the entities in which the Assore group has an interest, other than portfolio investments, and distinguishes between Assmang’s operations and the AMT operations as defined in the “Scope and boundary” (refer page 10).

The group reports on sustainability performance in accordance with the guidance outlined in the Global Reporting Initiative (GRI) G3 guidelines. A suite of reporting indicators has been selected on the basis of their materiality to the specific risk profiles of the operations. Based upon this disclosure, this report meets application level B of the GRI G3 Sustainability Reporting Guidelines and the associated Metals and Minerals Sector supplement, details of which can be found at www.assore.com. Assore takes note of the proposed GRI G4 guidelines for sustainability reporting, but as these have yet to be widely adopted by industry, will continue to utilise the G3 format for 2013.

The sustainability management systems the group has put in place control the ongoing collection and verification of pertinent data sets, which are assured in accordance with the processes outlined on page 11. Analysis of these increasingly robust data sets serves to inform management decision-making with respect to health, safety and environmental and other sustainability considerations.

Sustainability management systems

The group’s sustainability risk management systems form part of the group’s overall enterprise risk management system and are designed to inform and guide group strategy and business performance.

The Assore and Assmang boards have ultimate responsibility for establishing policy and ensuring responsible management of sustainability risks associated with the group’s operations. This responsibility falls within the remit of the Social and Ethics Committees (SEC) that have been established for Assore and Assmang during the year under review in line with the requirements of the Companies Act. The SEC’s roles and responsibilities are set out in its charter, which mandates the committee to oversee the management of risks associated with safety, health, environmental, stakeholder engagement, socio-economic and governance aspects of the group’s business.

The group’s site-based policies and procedures are consistent with the risk management principles laid out in the ISO31000 suite of standards, and are informed in specific areas of sustainability risk by the following standards: ISO9001 (quality management), ISO14001 (environmental management) and OHSAS18001 (occupational health and safety management). Other national standards are applied, where relevant, to manage other areas of risk such as SANS16001 for wellness and disease management and SANS10286 for tailings management.

Structure of the sustainability function

Within both Assmang and AMT structures, site-based environment, health and safety staff as well as corporate social responsibility practitioners report directly to mine management to ensure integration with operational requirements. Corporate office capacity supports the site’s functions by establishing group-wide policy and performance standards, driving strategic sustainability initiatives, facilitating internal and external reporting and engaging with key stakeholders.

Within the Assore structure, the Senior Manager: Safety, Health, Environment, Risk and Quality reports directly to Assore’s Group Technical and Operations Director. A similar structure exists within Assmang, with the Divisional SHEQ Manager reporting to the Chief Executive: ARM Ferrous, who carries the legal responsibilities for Assmang.

Commitment to legal compliance

The achievement and maintenance of legal compliance is at the core of the group’s environmental, health and safety policies and is the primary objective of the group’s environmental, health and safety procedures.

Legal compliance remains a minimum performance requirement for the group’s operations and is determined by an ongoing programme of internal and external auditing. As part of their ISO-based management systems, each operation maintains a site-specific legal register detailing the applicable legislation with which the operation needs to comply. Legal compliance is also periodically reviewed by external service providers who audit both AMT and Assmang operations on a bi-annual basis, with the next legal compliance audits due in 2014.

As part of its ongoing risk management process and in context of the expansion of underground operations at Rustenburg Minerals, SLR Consulting was commissioned to review the management of all tailings facilities for the AMT chrome operations. Findings which identified areas for improvement have been budgeted for in the 2014 financial year, and will be incorporated into the development of a long-term tailings management strategy for both Rustenburg Minerals and Zeerust.

Legal compliance status

As required by law, all mining operations within the group have approved environmental management programmes (EMPs) which are periodically reviewed and revised to reflect changes to operational practices and infrastructure on the sites.

Internal and external audits of the Assmang and the AMT operations confirm that the only point of administrative non-compliance remains the issuing of Integrated Water Use Licences for the AMT operations in North West province, some of which were applied for as far back as 2006. While they continue to await the issue of their new licences, these sites continue to operate under their old permit conditions and in accordance with the additional commitments made in their applications. As in previous years, Assore management continues to liaise with the Department of Water Affairs on a monthly basis to confirm that there are no outstanding queries or data requirements to impede the processing of these applications.

No administrative penalties, fines or prosecutions were incurred by either Assmang or the AMT operations over the current financial year, nor was the group prosecuted for any anti-competitive behaviour or anti-trust monopolistic practices. Similarly neither Assmang nor its operating divisions received any fines for non-compliance in respect of legislation concerning the provision and use of products and services.

Energy consumption and climate change


As an intensive energy user, energy consumption – and resultant greenhouse gas (GHG) emissions – are a material input cost and environmental issue for the group’s operations.

In response to growing stakeholder concern about climate change and the introduction of a carbon tax on 1 January 2015, the group has focused on understanding and responding to the business and environmental risks that carbon-related issues change pose to its business.

Diesel and electricity usage

Diesel use (‘000ℓ) Electricity use (kWh)
Operation 2013  2012 2013  2012
Beeshoek 15 004  7 549 40 339  39 974
Khumani 40 389  37 838* 166 156  158 561
Black Rock 4 289  4 355 99 016  99 063
Cato Ridge Works 559  492 608 353  747 392
Dwarsrivier 1 629  1 402 51 653  47 604
Machadodorp Works 844  1 273 233 680  825 131
Rustenburg Minerals 3 111  2 776 9 378  9 649
Zeerust 239  1 648 3 187  2 952
Wonderstone 178  167 1 394  1 904
Wonderstone Grader Road 53  159 
* Restated from previous year

 

Diesel consumption

During the year under review, diesel consumption increased on all the group’s mining operations with the exception of Black Rock. Diesel consumption doubled at Beeshoek, reflecting the deployment of a larger vehicle fleet to undertake pre-stripping.

A substantial decrease in diesel consumption of 33,5% year-on-year was recorded at Machadodorp, reflecting an overall scaling back of smelting operations due to challenging market conditions. Diesel consumption also dropped by 85% at Zeerust, resulting from the suspension of surface mining.

Electricity consumption

Assmang’s electricity consumption showed a sharp decrease of 38,8% during the year under review, primarily due to reduced consumption at Assmang’s smelter operations in response to the subdued nature of the ferroalloys markets. The shutdown of furnaces at both operations during the year resulted in a 71,7% decrease in electricity consumption at Machadodorp, and a 18,6% decrease at Cato Ridge Works.

Electricity consumption remained stable across the group mines during 2013, with small percentage increases reported by most operations. Over the same period, a substantial drop of 26,8% in electricity consumption was also recorded at Wonderstone, due to reduced production of ceramic tiles.

Corporate carbon footprint

Assore has been quantifying its emissions since 2009, and the resultant corporate carbon footprint (CCF) informs its strategy for increasing the group’s energy efficiency and reducing its emissions profile.

In line with the methodology laid down in the Greenhouse Gas Protocol – Corporate Standard – as well as ISO14064, GHG emissions are reported under three categories:

  • Scope 1: Direct GHG emissions which occur from sources that are owned or controlled by the company (eg emissions resulting from diesel consumption by mine vehicle fleets, consumption of reductants in furnaces and burning of liquid petroleum gas)
  • Scope 2: GHG emissions from the generation of purchased electricity consumed by the company. This is purchased from Eskom, whose power is predominantly generated by coal-fired power stations
  • Scope 3: GHG emission that are a consequence of the company’s activities but occur from sources not owned or controlled by the company (eg product transportation and business travel), which are not reported on in this document

 

The GHG emissions from the group operations for the year under review are summarised in the table on page 62.

Assmang’s carbon emissions figures vary slightly from those published in the 2012 annual report because the Scope 1 and 2 carbon emissions were provisionally calculated at the time that this report was published. This data has been restated and disclosed in the Carbon Disclosure Project (CDP) submission made in June 2013.

Scope 1 and 2 emissions in CO2e tons

2013 Scope 1 Scope 2 Total
emissions
Assmang operations 508 563 1 117 844 1 626 407
AMT operations 9 418 13 203 22 621
2012 Scope 1 Scope 2 Total
emissions
Assmang operations 858 431 1 808 549 2 666 980
AMT operations 12 047 14 869 26 916
2011 Scope 1 Scope 2 Total
emissions
Assmang operations 573 055 1 426 879 1 999 934
AMT operations 12 891 8 174 21 065
Note: Carbon emissions for the Assmang operations are quoted on an attributable basis.

 

Assmang’s Scope 1 emissions dropped by 39,0% in 2013, primarily due to a sharp decrease in production (and associated reductant consumption) at the smelter operations. This decrease was partially offset by increased diesel consumption on the mine sites. AMT operations’ Scope 1 emissions also reduced by 21,8% year-on-year, primarily due to suspension of surface mining at Zeerust.

Assmang’s Scope 2 emissions dropped by 38,2% over the period under review. This reflects the switching out of furnaces at both the Cato Ridge and Machadodorp Works during the year, which are the group’s largest electricity consumers. Over the same period, Scope 2 emissions from the AMT operations dropped by 11,2%, due to reduced electricity consumption at Wonderstone and Zeerust.

sus1
sus2

The breakdown of emissions on a site basis demonstrates that the two smelter operations remain the main sources of carbon emissions. However, reduced ferroalloy production as a response to challenging market conditions has reduced Assmang’s total carbon emissions by over a third year-on-year, with the contribution from the smelters falling to 69% of total emissions (2012: 82%).

Rustenburg Minerals remains AMT’s major source of carbon emissions, and has increased to 74% of AMT’s total emissions (2012: 60%), reflecting increased production at Rustenburg Minerals, contrasted with scaling back of operations at Zeerust.

In the year under review, submissions to the CDP were made in respect of both the Assmang and AMT operations by the joint-venture partners.

Financial implications of carbon taxation

During the year under review, it was confirmed that carbon taxation will be introduced in South Africa in 2015. The exact structure of the tax has yet to be disclosed, but the model proposed will tax companies on the basis of their Scope 1 emissions, with certain “free” emissions allowances extended to certain industry sectors, operations who have emissions associated with their processes and companies that are deemed to be “trade exposed”.

Based on the guidelines provided to date, it is estimated that the additional carbon tax burden directly attributable to Assore in respect of the Assmang joint venture will be between R10,3 million and R20,6 million per annum, and will be approximately R0,7 million for the AMT operations. These calculations are based on a tax rate of R120/tCO2e and Scope 1 emissions calculated for 2012, which is the most recent year for which detailed emissions data is available.

Operational risks associated with climate change

The group’s operations are primarily located within the arid zone and are therefore particularly vulnerable to changes in climatic regime which impact on water supply. Extreme weather conditions also have the potential to disrupt logistics due to damage to transport and power infrastructure.

Water management

The group’s mines are located in water scarce regions and the provision of a reliable water supply to sustain mining and processing is an ongoing challenge.

Water consumption in m3

Operation Water
consumption
2013
Water
consumption

2012

Water
consumption
FY2011
Beeshoek 7 964 901 6 190 014 4 611 620
Khumani 4 041 671 3 772 149 2 611 648
Black Rock 1 015 952 862 842 857 030
Cato Ridge Works 376 054 395 083 374 163
Dwarsrivier 133 912 129 990 362 522
Machadodorp Works 192 954 142 928 130 620
Rustenburg Minerals 262 452 247 666 286 202
Zeerust 219 866 233 710 22 255
Wonderstone 2 796 1 267 1 137*
Wonderstone Grader Road 8 089
* Restated from previous year

 

Water consumption on the majority of the group’s operations remained within 10% of the figures reported in the previous financial year. The largest percentage increases year-on-year (28,7% and 17,7%) were recorded by Beeshoek and Black Rock respectively, reflecting an increase in mine production and plant throughput.

The 35% apparent increase in water consumption at Machadodorp results from upgrades to the onsite flow monitoring system, which indicates that consumption volumes previously reported were understated.

During the third quarter of the year under review, Khumani Mine reported significant concern with regard to reliability of water supply, resulting from challenges related to the integrity of distribution infrastructure, and has been engaging at a high level with Sedibeng Water and the relevant authorities to address this issue. A high-level assessment of water security for the Northern Cape mines has identified this as a material risk that will need to be addressed in the coming year as part of Assmang’s climate change response strategy.

Waste management

The largest waste streams generated by the group’s operations consist of waste rock and process waste, comprising tailings from the mines and slag from the smelter operations.

Waste generated by operations

Waste Tailings/ Waste Tailings/
rock slag rock slag
2013 2013 2012 2012
Operation (m3) (tons) (m3) (tons)
Beeshoek 10 924 703 1 340 888 848 328 956 436
Khumani 41 129 523 2 159 801 41 444 833 1 994 369
Black Rock 41 038 263 304 46 359 199 347
Cato Ridge
Works N/A 122 753 N/A 175 648
Dwarsrivier 299 011 268 379 281 604 320 541
Machadodorp
Works N/A 44 174 N/A 268 603
Rustenburg
Minerals 877 323 58 785 1 809 868 37 008
Zeerust 27 764 1 244 783* 70 818*
Wonderstone 52 665 N/A 104 319 N/A
Wonderstone
Grader Road N/A N/A N/A N/A
* Restated from previous year

 

Waste rock

During the period under review, the greatest increase in mine waste generation was recorded at Beeshoek, where the volume of waste rock increased from 0,85 million m3 in 2012 to 10,9 million m3 in 2013. This marked increase reflects waste generated by overburden stripping in advance of mining.

A substantial drop in the rate of waste rock generated was recorded at Rustenburg Minerals, which reduced by 51,5% year-on-year, reflecting the transition from surface to underground mining as the Zandspruit and Groenfontein declines are developed. Waste rock generation also halved at Wonderstone, due to a reduction in mining as a result of challenging market conditions, and no waste rock was generated at Zeerust during the reporting year, reflecting the suspension of mining operations.

Tailings and slag

During 2013, the amount of tailings generated at Beeshoek increased by 40,2%, reflecting an increase in throughput at the jig plant. At Black Rock, a 32% increase in tailings generated year-on-year (accompanied by a 11,5% decrease in waste rock produced over the same period) represents the completion of a phase of underground development, thus facilitating a ramp up of ore production.

In 2013, Rustenburg Minerals reported a 58,8% increase in tailings volumes due to increased plant throughput. Conversely, Zeerust reported a 60,8% decrease in tailings generation, resulting from the suspension of mining operations.

During the period under review, the volume of slag generated by the smelting operations dropped markedly in response to the switching out of furnaces, with Machadodorp and Cato Ridge Works reporting falls in slag generation of 83,6% and 30,1% respectively.

During 2013, Cato Ridge Works has continued to reclaim reprocessed slag generated by the Metal Recovery Plant for sale into the local aggregate market. Although slag sales dropped by 13,6% year-on-year, the volume of slag sold in 2013 was 13% more than the amount of reprocessed slag generated during the year.

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Land management and financial provision for closure

South African legislation requires that mining companies limit their impact on the natural environment as a result of their operations and are required to rehabilitate land disturbed through mining and mineral processing to a condition compatible with a sustainable post closure land use.

Assore group – rehabilitation and closure provisions

Total
area
currently
disturbed
2013
(ha)
Total
liability
2013
R’000
Current
guarantees
in place
Total area
currently
disturbed
2012
(ha)
Total
liability
2012
R’000
Current
guarantees
in place
Environ-

mental

fund

Environ-

mental

fund

Operation/mine
Beeshoek 1 054 91 421 53 032 38 389 970 84 700 63 836 38 389
Khumani 2 830 237 052 50 021 187 032 1 680 211 856 28 542 187 032
Black Rock 8 166 162 43 493 122 669 1 441 199 338 34 506 122 668
Dwarsrivier 178 45 013 11 340 33 673 164 41 472 11 536 33 673
Subtotal 4 070 539 648 157 886 381 763 4 255 537 366 138 420 381 762
Alloy operations
Cato Ridge 103 459 80 102 807
Machadodorp 142 91 025 142 87 427
Total Assmang operations 4 212 734 132 157 886 381 763 4 477 727 600 138 420 381 762
Rustenburg Minerals 76 10 721 7 735 13 000 140 9 550 7 334 13 000
Zeerust 28 3 495 2 647 3 500 86 3 008 2 511 3 500
Wonderstone 37 3 768 3 057 4 500 34 3 763 2 900 4 500
Total AMT operations 141 17 984 13 439 21 000 260 16 321 12 745 21 000
Note that closure and rehabilitation liabilities are reported on a 100% basis.

 

Land management

It was previously reported that Biodiversity Action Plans (BAPs) have been developed for all the group’s operations, which confirmed the absence of rare or endangered species of flora and fauna. The actions recommended in the BAPs have been integrated into the sites’ land use management procedures in order to conserve biodiversity, and have also informed decisions on sustainable post-closure land use. The BAPs have also been used to select species for revegetation that are compatible with both the natural ecosystem and sustainable post-closure land uses, thus limiting the financial provision required for site rehabilitation prior to closure.

During the year past year, the area of land disturbed by the Assmang operations has remained within 10% of the figures reported for 2012. The exception has been at Khumani, which recorded a 68,5% increase in disturbed land area due to expansion of the open-pit operations. The area of land disturbed by the smelter operations remained unchanged year-on-year.

The disturbed area at both Zeerust and Rustenburg Minerals reduced substantially during 2013, by 67,4% and 45,7% respectively. This is due to rehabilitation of the worked out open-cast operations due to the cessation of mining at Zeerust and the progressive shift to underground production at Rustenburg Minerals.

Financial provision for closure

Closure plans developed for the group operations inform the financial provision made for rehabilitation and closure, which is funded by a combination of cash deposited in environmental trust funds or the issue of environmental guarantees. The closure plans are reviewed, and if need be, revised on an annual basis. Where possible, concurrent rehabilitation is undertaken in areas where mining has been completed. This allows operations to determine the long-term sustainability of their rehabilitation and revegetation techniques, and also contains the “footprint” of disturbed land (and the associated rehabilitation provision) to a minimum.

Financial provision for mine closure and rehabilitation constitutes the single biggest environmental liability for the group’s operations, with a total liability of R734,1 million (2012: R727,6 million) for Assmang operations and R18,0 million (2012: R16,3 million) for the AMT operations.

The group’s provisions for closure and rehabilitation are calculated by independent specialists.

Although Khumani’s disturbed area has increased by 68,5% year-on-year, the total closure liability for the mine has only increased by 11,9% over the same period, reflecting the fact that the Khumani closure provision was previously overfunded.

The Cato Ridge Works and Machadodorp smelters are classified as industrial (rather than mining) facilities, which are currently not required in terms of South African legislation to make financial provision for site closure or rehabilitation. Nonetheless, in line with its commitment to responsible environmental management, Assmang’s financial statements also make provision for the environmental obligations of the smelter operations.

The AMT closure provision has increased by a modest 9,7%, which reflects the substantial amount of concurrent rehabilitation undertaken at both Rustenburg Minerals and Zeerust in the year under review.

Safety


The safety performance of the Assmang operations over the past year has been comparable with that of the previous reporting period, with a particularly encouraging performance from the two smelting operations.

Khumani Mine achieved a significant safety milestone during the year, with the completion of 3 million fatality-free shifts in January 2013. Beeshoek’s excellent safety performance during the year was recognised by the award of the Northern Cape Mine Managers’ Association trophy for mine safety (in the category of open-cast mines with more than 200 employees) in late 2012.

Machadodorp Works ended the financial year without a single lost-time injury (LTI) – resulting in the lowest lost time injury frequency rate (LTIFR) ever recorded for this operation – and both Beeshoek and Cato Ridge Works completed the second half of the financial year without an LTI.

By contrast, the safety performance at both Dwarsrivier and Rustenburg Minerals mines over the reporting year has been disappointing, and has been identified as priority areas that will continue to be the focus of corporate and site management attention in the coming year.

Fatalities

No fatalities occurred at Assmang operations during this financial year, the third fatality-free year in a row for the Assmang mines. However, Assore regrets to announce that two fatalities occurred at its Rustenburg Minerals operation, during the reporting period.

On 10 October 2012, Mr Johannes Maseko, a contractor employed by Benhaus at the Groenfontein operation, was involved in a fatal vehicle accident.

On 1 February 2013, Mr Cornelius Pretorius was fatally injured in an underground blasting accident at the Zandspruit decline.

Assore recognises that it has a duty of care to safeguard the health and safety of its employees and extends its sincere condolences to both of the families for their loss.

Lost-time injury frequency rates

LTI LTIFR* (weighted)
Operation 2013 2012 2013 2012
Beeshoek 1 0 0,07 0
Khumani 9 5 0,22 0,11
Black Rock 9 5 0,33  0,19
Cato Ridge Works 1 6 0,10 0,52
Dwarsrivier 22 20 0,87 0,76
Machadodorp Works 2 0,16
Combined Assmang sites 42 38 0,32 0,29
Rustenburg Minerals 5 5 0,77 0,81
Zeerust 1 1 1,16 0,62
Wonderstone 3 2 2,89 1,75
Wonderstone Grader Road 2 N/A 8,02 N/A
Combined AMT sites 11 8 1,28 0,90
*LTIFR calculated on a basis of 200 000 hours

The LTIFR for the Assmang operations during the reporting period was 0,32 (comprising 0,38 for the Assmang mines and 0,05 for the Assmang smelters). This represents a slight deterioration in performance compared to the previous financial year, for which an overall LTIFR of 0,29 was recorded, which is attributable to disappointing safety performance at Dwarsrivier.

The LTIFR recorded for the AMT operations was 1,16, which is significantly higher than the LTIFR of 0,9 recorded for the previous financial year. This disappointing performance is primarily due to the ongoing safety challenges experienced at Rustenburg Minerals during 2013 and two accidents reported at the Wonderstone Grader Road operation. However, counterintuitively, the increase in LTIFR for AMT operations also reflects improved reporting of safety incidents at AMT operations as the first stage of a major management intervention to ensure that all LTIs and near misses are consistently reported and recorded.

Section 54 and compliance notices

A total of seven Section 54 notices were served on the Assmang mines during the reporting year (2012: 10), resulting in 15 days of lost production. This compares to a total of 10 Section 54 notices served in Assmang mines the previous financial year (which resulted in 20 days of lost production).

During the financial year, Rustenburg Minerals lost 55 working days as a result of five Section 54s, primarily due to increased focus on the operation due to the two fatalities and a resultant increase in Department of Mineral Resources (DMR) inspections. This loss of production due to safety-related work stoppages emphasises the direct linkage between poor safety performance and compromised productivity, and has provided yet further impetus to the renewed safety drive at Rustenburg Minerals, which includes the deployment of additional safety resources and the introduction of a behaviour-based safety system.

As with the previous year, no compliance or prohibition notices were served on either of the smelter operations during the reporting period.

Occupational health and wellness

The proactive management of employee health and wellness is a key focus of the group’s occupational health management system, and is an area that has received increased corporate attention and resourcing over the past year.

Assmang’s occupational health function is structured to meet the requirements of the SANS16001:2013 standard for Wellness and Disease Management. This standard was originally developed for HIV/Aids and tuberculosis (TB) management, but has recently been revised and expanded to address other aspects of employee wellness. The Khumani clinic has already been certified to ISO16001, and it is intended that other Assmang operations will seek certification as their management systems mature.

During 2013, construction of a clinic at Rustenburg Minerals was completed to provide occupational health, wellness and first aid services for the expanded workforce, and will be staffed with an occupational health nurse in the coming financial year.

Medical surveillance and referrals

The legal requirement that all permanent and contract employees undergo entry, annual and exit medical examinations underpins the group’s medical surveillance programme. During 2013, considerable effort was made to integrate the human resources, security and clinic functions on sites to ensure that all personnel have valid medicals and that any staff demonstrating symptoms of possible occupational disease are identified and referred for appropriate follow up.

Hearing conservation remains a major focus of the occupational health surveillance and management programmes at all operations to prevent Noise-Induced Hearing Loss (NIHL). This includes controlling exposure through implementation of noise reduction strategies, monitoring occupational noise levels, issuing of personal protection equipment (including disciplinary action against employees not wearing prescribed personal protective equipment) and routine audiometric testing.

Occupational health screening

Audiometric testing

    2013   2012
Operation   Number
of medicals
performed
Number of
audiometric
surveillance
tests
performed
Number
of
cases
referred
for audio-
metric
diagnostic
testing
Number of
cases
submitted
for com-
pensation
  Number
of medicals
performed
Number of
audiometric
surveillance
tests
performed
Number
of
cases
referred for
audiometric
diagnostic
testing
Number of
cases
submitted
for com-
pensation
Beeshoek   2 497 2 675 1   2 088 2 996 5 1
Khumani   7 195 8 209 12 3   6 799 8 884 9 11
Black Rock   4 403 4 925 10 6   3 751 4566 3 2
Cato Ridge Works   1 902 1 638 5   1 929 2 550 5
Dwarsrivier   2 430 2 713 2 1   2 451 3 107 7
Machadodorp Works   925 1 053 15 4   975 957 2 1
Rustenburg Minerals   830 830 2 2   528 528 6 6
Zeerust   53 53   145 145 1
Wonderstone   105 105   108 108 1
Wonderstone Grader Road   33   N/A N/A N/A N/A

In 2013, a total of 45 Assmang employees (2012: 31) and two AMT employees (2012: 8) were referred to an audiometric specialist for follow up. Of the cases referred for follow up, 14 Assmang employees (2012: 15) and two AMT employees (2012: 6) were referred for possible compensation for NIHL.

Chronic conditions

Routine medicals and wellness days provide a means of identifying employees with chronic medical conditions that require specialist case management. Chronic conditions – particularly newly diagnosed cases – are managed as a risk issue, and are monitored by the site clinic to ensure that the employee’s condition remains stable and that he/she is fit for work. In line with the requirements of the DMR, operations keep a chronic disease register to monitor and manage employees who are on treatment.

The most common chronic medical conditions identified on sites include hypertension, diabetes, epilepsy and obesity, and developing awareness of the diagnosis and management of these conditions is a core element of the employee wellness programmes.

HIV and TB management

HIV/Aids management forms an integral part of the wellness management programme at all operations. Voluntary testing and counselling (VCT) is offered in all on-site clinics and at wellness days, although HIV testing is voluntary.

TB has become a national focus area for the Department of Health, especially for mining operations, and during the year under review, a TB reporting standard operating procedure was implemented on Assmang sites. As part of this procedure, employees who visit site clinics for any medical surveillance are passively screened for TB.

Employees who are suspected of having TB are referred to the public health facilities for active screening and management.

Employee wellness initiatives

During 2013, employee wellness days were held in conjunction with medical aid funds and other health service providers at all Assmang operations, as well as Wonderstone, which held its first wellness day in April 2013. In April 2013, alcohol awareness training was conducted at Wonderstone in partnership with SAB Miller to educate employees on the responsible use of alcohol.

In the year under review, an employee wellbeing programme was launched in the Assmang operations in partnership with Careways. This is a confidential counselling service that provides employees and their families with support in areas that may affect their ability to function in the work environment, including substance abuse, financial, legal and health concerns, chronic health conditions and family and relationship challenges. The programme complements the range of wellness initiatives undertaken on the operation and employees are able participate voluntarily in the programme as well as being referred by their management for counselling following disciplinary action.

Employee housing schemes

Provision of housing is a material issue for the group, particularly in the Northern Cape where there is a shortfall of existing housing to meet the requirements of the mines in the region. The housing shortage is a challenge that has not only had the potential to undermine industrial relations and employee wellness, but has also proved to be an obstacle to staff recruitment, particularly at Khumani.

Following on from progress reported in 2012, the Khumani Housing Development Company (KHDC) has made significant strides in providing more accommodation in Kathu, Kuruman and Mashishing (formerly Lydenburg) during the year under review, as detailed in the table below.

    Extension 3
Kathu
Uitkoms
Kathu
Rooisand
Kathu
Kuruman Postmasburg Mashishing Total
Houses completed   327 84 369 24 0 33 837
Sold   284 75 234 17 0 0 610
Rental units   43 9 135 7 0 33 227
Under construction   0 3 146 76 200 0 425

To date, 780 houses have been completed in Kathu – where the housing shortage is most acute – of which 593 have been sold and 187 have been made available for rent. In addition, 24 new houses have been completed in Kuruman for Black Rock employees, and 33 units have been completed in Mashishing for rental to Dwarsrivier staff.

A total of 425 new houses are currently under construction in Kathu, Kuruman and Postmasburg. KHDC purchased an additional portion of land in Rooisand in 2013, resulting in a total of 822 residential stands (of which 146 were under construction at the time of reporting, and another 539 stands which are available for future development).

During the reporting period, the servicing of 260 residential stands in Wrenchville, Kuruman was completed, and construction of 76 houses has commenced.

Future development of the Village Pit at Beeshoek will require the demolition of the existing mine village. Two hundred residential units are currently under construction in Postmasburg to provide replacement housing, and servicing of land suitable for another 300 residential units is currently under way.

An employee housing scheme is also being planned for Wonderstone, where 40 stands having been secured in Letsopha. These stands already have mains water supply, and it is anticipated that connection to grid power will be complete by the end of 2013, after which construction can commence.

Human resources


The table below demonstrates the balance between permanent employees and long-term contractors in the workforce on each of the operations.

Workforce composition

    2013 2012
Operation   Permanent
employees
Temporary/
contract
employees
Permanent
employees
Temporary/
contract
employees
Beeshoek   556 12 425 39
Khumani   1 584 2622 1 241 2 520
Black Rock   2 292 213 1 983 1 096
Cato Ridge Works   509 4 686 460
Dwarsrivier   1 236 331 1 302 609
Machadodorp Works   396 5 691 1 466
Total Assmang operations   6 573 3 187 6 328 6 190
Rustenburg Minerals   201 441 200 328
Zeerust   12 47 14 136
Wonderstone   97 96 11
Wonderstone Grader Road   22    
Total AMT operations   332 488 310 475

The number of temporary contractors working on the group’s operations varies significantly throughout the year, reflecting the status of major projects that have been undertaken, such as the plant expansion at Khumani and furnace conversion at Machadodorp. Because of this extreme variability, it is not considered meaningful to report on a single number of project contractors per operation. Although project contractor numbers are not reported in this section, it should be noted that both long-term and project contractors have been considered in the calculation of the safety statistics presented on page 66.

In 2013, both Beeshoek and Khumani saw a significant increase in permanent employee numbers during the reporting year (30,8% and 27,6% respectively). This reflects an increase in production on both operations, due to a ramp up in mining production at Beeshoek and the completion of a major plant expansion at Khumani.

During the year under review, there was a notable shift in the workforce composition at Black Rock, with a substantial reduction in the number of long-term contractors, balanced by the hiring of an additional 309 permanent employees.

Due to the continued subdued nature of the ferroalloys market, both the Machadodorp and Cato Ridge smelters went through Section 189 retrenchment processes during 2013, resulting in a reduction in the permanent staff complement of 42,7% and 25,8% respectively. This restructuring is also reflected by the virtual elimination of long-term contractors from the workforce at the smelting operations.

While the permanent staff complement at Rustenburg Minerals remained stable year-on-year, there was a 34,5% increase in contractor numbers during 2013 due to expansion of the open-cast mining operations at Vogelstruisnek. By contrast, Zeerust experienced a 65,4% decrease in contractor numbers during the year due to the suspension of surface mining operations.

Employment equity

The graphs below demonstrate the proportion of Women in Mining (WIM) related occupations and Historically Disadvantaged South Africans (HDSAs) in management for each of the operations, as compared to the targets stipulated in the Mining Charter.

During the year under review, all group operations, with the exception of Khumani and Zeerust, exceeded the 40% Mining Charter target for Historically Disadvantaged South Africans (HDSAs) in management.

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The target of 10% women employed in mining-related activities (WIM) was exceeded at Beeshoek, Dwarsrivier, Rustenburg Minerals and Wonderstone mines, as well as the smelter operations, which are not required to comply with this target. Due to difficulties in attracting women into the active mining workforce in the Northern Cape, the Khumani and Black Rock operations are still struggling to meet the target for WIM, and Zeerust also failed to comply.

Staff training and development

During the reporting year, Assmang spent a total of 9,8% of payroll on staff training and development (2012: 9,3%), which exceeds both the DTI scorecard target of 3,5% and the Mining Charter target of 4%. The highest proportion of expenditure on training occurred on the Northern Cape mines – primarily Khumani and Black Rock – due to the training requirements of a rapidly expanding workforce.

% of payroll spent on training

    Proportion
of payroll
spent on
training (%)
2013
  Proportion
of payroll
spent on
training (%)
2012
Assmang operations   9,8   9,3
AMT operations   2,3   5,3
* Restated from previous year

By contrast, overall training spend for the AMT operations dropped from 5,3% in 2012 to 2,3% in 2013. This drop in training expenditure reflects the redeployment of a portion of the Rustenburg Minerals training budget to skills development and training in neighbouring communities, coupled with reduced training requirements at Wonderstone due to the extremely stable nature of the workforce.

There was a general decline in the number of learnerships and bursaries offered across the Assmang operations during the reporting year, with the number of bursaries reducing by 64,3% and the number of learnerships decreasing by 6,5%. As in previous years, the majority of Assmang learnerships and bursaries were offered by the rapidly expanding mines in the Northern Cape. The decline in the number of learnerships and bursaries reflects substantial investment in staff development that has taken place in previous years to meet the requirements of the expanded Khumani and Black Rock mines, with significant numbers of staff now having completed their studies.

Over the same period, the number of AMT bursaries declined by 28,9% and the number of learnerships decreased from four to three. This reflects the completion of a learnership and the redeployment of training opportunities to the community in response to requests made by the community following the civil unrest experienced at Rustenburg Minerals in 2012.

Due to recruitment policies which stipulate literacy as a minimum requirement and the success of ABET programmes for existing employees, the literacy rate on the Assmang operations remains above 95%. By contrast, the literacy rate on the AMT sites, with the exception of Wonderstone Grader Road, is lower, and has dropped year-on-year, probably reflecting the marked increase in the number of contractors employed at Rustenburg Minerals.

During the year, Assore partnered with First National Bank (FNB) to present financial literacy training to the workforce at Wonderstone. The programme was run over a period of one month and comprised workshop sessions presented by a multilingual trainer, which allowed ensuing discussions to be conducted in a combination of English, Afrikaans and Setswana to maximise accessibility. Based on the success of this programme, the partnership with FNB will be extended to provide similar training at Rustenburg Minerals, Machadodorp Works and Dwarsrivier during the coming financial year.

Labour relations

The unions that have been formally recognised by the Assmang operations are the National Union of Mineworkers (NUM) and the National Union of Metalworkers of South Africa (NUMSA). NUM is the dominant union on the mines, while NUMSA has majority membership at the smelter operations. The percentage of employees belonging to a union has remained virtually unchanged for the Assmang operations over the reporting year.

NUM is the only union recognised by the AMT operations, and achieved a marked upswing in membership in 2013 (with an increase in membership from 27,2% to 47% of the workforce year-on-year).

Despite the fact that 2013 was a challenging year for the mining industry, neither Assmang nor AMT operations experienced any industrial action over this period.

Stakeholder engagement


Assore recognises that its ability to establish and maintain long-term relationships with a diversity of stakeholders is integral to its risk management processes. Accordingly, Assore continues to seek, develop and strengthen mutually beneficial partnerships with key stakeholders through a variety of forums in order to support its business strategy.

Despite the recent challenges posed by volatility in world markets and industrial relations in the South African economy, our stakeholder engagement processes and the issues raised in the course of the group’s engagement have remained substantially unchanged for the period under review. Following the civil unrest that affected the Western Limb of the Bushveld in North West province in 2012, Assore and its BEE partner have focused particular effort on engaging with neighbouring communities to identify and address the root causes of social discontent. As a result of this engagement, significant resources have been devoted in the year under review to skills development and training of community members, particularly the youth, to enhance their employment opportunities.

A summary of the group’s key stakeholders and the issues raised by them during engagement is included on the company’s website, www.assore.com, under the Investor centre in the 2013 annual report.

Product stewardship

As the company responsible for marketing the group’s products, Assore’s wholly owned subsidiary, Ore & Metal, has a responsibility to proactively manage financial and reputational risk by positively influencing the business and social environment within which it operates. The group therefore plays an active role in industry associations that aim to promote the use and sustainability of commodities that it produces, and to foster cooperation between peer companies to address issues of common concern.

Involvement in industry associations

An Ore & Metal representative currently serves on the International Manganese Institute’s (IMnI) Occupational Health, Environment and Sustainability Committee. Ore & Metal also chairs IMnI’s Regulatory Committee, which monitors manganese-related national and international legislation and lobbies on regulatory issues of importance to the sector.

During the reporting year, Cato Ridge Works was one of 17 sites worldwide that participated in IMnI’s Life Cycle Assessment for manganese products. Once completed, this study will allow Assmang’s manganese operations to benchmark their environmental and carbon-related performance against industry peers, as well as allowing comparison of the environmental impact of the manganese industry against other industry sectors and regulated standards.

Ore & Metal is also participating in the Socio-economic Assessment (SEA) which is being undertaken by the IMnI to quantify the manganese industry’s contribution to society. The first phase of this study has been concluded, which demonstrates the economic importance of manganese production and its use in downstream applications.

Ore & Metal also continues to participate in safety and occupational health-related initiatives coordinated by the International Chrome Development Association (ICDA), including chrome ore characterisation. It has also worked with the Iron Platform to demonstrate that its iron ore products do not contain respirable crystalline silica.

On a national level, Assmang holds the deputy chairmanship of the Ferroalloys Producers Association (FAPA) and representatives from both smelting operations sit on FAPA’s Environmental, Technical and Logistics Committee.

Product registration and stewardship

In January 2012, the International Maritime Organisation revised its MARPOL Annex V bulk shipping code to align with the requirements of the Globally Harmonised System (GHS) of hazard classification. This revision was intended to prevent pollution of the marine environment and has required Ore & Metal to work closely with industry associations to demonstrate that its products do not meet the definition of “harmful to the marine environment” as defined in Annex V. Test work is also under way to allow the company to demonstrate by the December 2014 milestone that its products will not require classification on the basis of human health considerations.

As reported in FY2010, the group completed and registered four substances in terms of Regulation EC 1907/2006 of the European Parliament for the evaluation, authorisation and regulation of chemical substances in order to ensure their safe use (colloquially known as “REACH”). Ore & Metal continues to track the development of similar REACH type legislation in other jurisdictions such as China, Japan, South Korea, India and Brazil which are due for implementation in the next five years and may require registration of its products.

Community economic development

Assore recognises that it has a responsibility to social upliftment in the communities within which it operates, and seeks to respond to the challenges of livelihood support and economic diversification in a manner that is appropriate for the different socio-economic and geographical settings of its operations.

Structure of the CED function

The Assore group has structured its community economic development (CED) programme to encompass aspects of corporate social investment (CSI), social economic development (SED) and enterprise development (ED). These three activities are aimed at directing financial and other resources in a way that enhances economic opportunities for host communities and improves social conditions in a manner that is sustainable.

Assore’s CSI expenditure is primarily funded by either Boleng Trust or the Chairman’s Fund, with a particular emphasis on education. Funding for SED is principally sourced from the Boleng Trust, with some contribution from the AMT operations, whereas ED is funded only by the AMT operations.

Assmang’s corporate social responsibility (CSR) initiatives are funded at an operational level to meet commitments made to skills development, capacity building, social upliftment and poverty alleviation.

The complex reporting requirements around aspects of SED performance are critical in maintaining the company’s social licence to operate. These include reporting to the DMR in terms of the Social and Labour Plans (SLPs), the Mining Qualifications Authority with respect to skills development and the Department of Trade and Industry in terms of the DTI Scorecard (which focuses mainly on issues related to black economic empowerment).

Community economic development expenditure

Funding of CED

    Total CED
expenditure
2013
(R million)
Total CED
expenditure
2012
(R million)
Assmang operations   100,7 82,8
AMT operations   9,0 1,2

During the year under review, CED expenditure by the AMT operations has increased almost tenfold, which reflects the harnessing of significant additional funding from both the Chairman’s Fund and Boleng Trust. Over the same period, Assmang CED expenditure has increased by 21,7%, which represents improved internal capacity to identify and develop projects to utilise the budgets that have been allocated for this purpose.

Assmang CED initiatives

Assmang’s CSR initiatives are structured around seven priority areas:

  • Education, training and skills development
  • Healthcare promotion, with an emphasis on HIV/Aids programmes
  • Job creation, with a focus on youth and women
  • Infrastructure development
  • Cultural events to unite communities
  • Capacity-building programmes aimed at enabling communities to participate actively in socio-economic processes and projects
  • Sporting events

Education and skills development

Assmang has selected education as a strategic CED focus area because of the importance of education in growing and developing both the South African economy and broader society. To this end, it continues to sponsor the upgrade and extension of schools and associated infrastructure in the communities around its operations. Assmang also provides schools with a range of support including staff salary support and provision of educational equipment, and extends bursaries to high-achieving learners to fund their tertiary education.

Assmang’s educational initiatives have also extended beyond the school system into the area of vocational and entrepreneurial training. During the year under review, Machadodorp completed construction of the Simunye Further Education Training Centre, and a Stone and Clay Art training project has been initiated by Khumani Mine. Assmang is also working closely with the Gamagara Local Municipality on the development of a business incubator to provide ongoing training and support for local entrepreneurs.

Flagship project: TEACH South Africa

In 2013, Assmang adopted TEACH South Africa as its flagship Corporate Social Investment project.

In the initial year of the programme, Assmang funded a total of 26 new graduates as Teach SA ambassadors who were placed in 13 schools close to the group’s operations in the Northern Cape, Mpumalanga, Limpopo and KwaZulu-Natal. It is intended that the ambassadors will remain with their designated school for a two-year period to provide teaching assistance to the existing staff and also to serve as role models and mentors to learners.

Ambassadors have been deployed in pairs to provide peer support for each other, and work primarily with Grade 10 to 12 learners. Particular emphasis is placed on developing English, Mathematics and Science competencies which are critical to enhancing learners’ future employability, and 50% of the ambassadors (ie one per school) are devoted to the mathematics and science curriculum. Each ambassador is also required to develop a “legacy project”, such as a choir or a science club.

As this is the first year of the programme, it has not been possible to quantitatively assess the impact that this intervention has made on the schools where ambassadors have been placed, although comparison of baseline tests with mid-year learner assessment generally indicates some improvement.

Infrastructure development

Assmang recognises the critical importance of infrastructure development in achieving social upliftment, improved healthcare and economic diversification within the communities in which it operates. In order to achieve this objective, the group’s mines have partnered with local municipalities to identify and fund projects that will upgrade and expand existing water reticulation, electricity supply and transport infrastructure.

Jn the water-scarce Northern Cape, there is a particular need for the development of water reticulation infrastructure to provide reliable water supply and sanitation service to communities. During 2013, Black Rock established a water reticulation network for the Madibeng, Eiffel and Klein Eiffel communities. In a similar vein, Khumani has funded the provision of water and sanitation infrastructure to 1 000 stands in the Deben community and has facilitated the connection of 92 stands at Olifantshoek to municipal water supply.

During the year under review, Dwarsrivier has partnered with Tubatse Municipality to expedite electrification of communities close to the mine.

Beeshoek has partnered with Tsantsabane Municipality to undertake the upgrade of transport infrastructure in Postmasburg, including improvements to the stormwater drainage system and the upgrading of the bus/taxi terminus. Khumani has assisted the Gamagara Municipality by managing and funding the maintenance and upgrade of several main roads in the area, as well as rehabilitation of internal roads in the Olifantshoek community.

Enterprise development

Enterprise development is central to Assmang’s CSR initiatives in order to achieve economic diversification and the creation of sustainable livelihoods in often remote host communities.

During 2013, Black Rock has provided support and equipment for the development of the Dithakong Sand Mine, which will provide local employment and generate aggregate for infrastructure development in the surrounding region.

At Khumani, a public private partnership has been established to facilitate the development of the Deben Coffin making project. The mine has also assisted in the development of Gamagara Integrated Cleaning Enterprise (GICE), which currently provides cleaning services to Khumani and is targeting other mines in the surrounding area as potential clients. The company is situated in Olifantshoek and employs 109 people from Olifantshoek and Dingleton, including a significant proportion of the youth from these communities.

AMT CED initiatives
Rustenburg Minerals

At Rustenburg Minerals, CED initiatives are focused on continuing to support the Makgophe Primary School. In addition to funding the development and maintenance of school infrastructure such as classrooms, computer centre and media centre, the mine funds the salaries for the teachers who oversee the crèche and the computer centre, and provides children at the crèche with four meals a day.

Rustenburg Minerals also funds the continued involvement of Imfundo Likusasalethu, which provides educational intervention training that assists learners in both the foundation and intermediate phases to improve their English language competence. To motivate learners’ academic performance, Rustenburg Minerals funds special functions such as graduate ceremonies and awards days, at which trophies, cash prizes and bursaries are presented.

During 2013, Rustenburg Minerals handed over ownership of the brickmaking project to two community members, who now run this as a small business, and the vegetable garden has also been handed over to a community cooperative. In line with its commitment to support and mentor local small business, the mine has also outsourced garden maintenance to a local company called Ofbon.

Wonderstone

During 2013, Wonderstone introduced a waste management project to Letsopha, which did not previously have waste removal services due to municipal budget constraints. The waste management intervention has three phases, the first of which is the supply of 3 300 wheelie bins and a waste removal truck to collect and remove waste from the township, with manpower being provided by the municipality.

The mine has also continued to support the Rainbow Crèche by providing toys and educational materials. The final phase of crèche construction was completed with the installation of a kitchen/canteen facility and drilling and equipping of a borehole to provide a reliable water supply.

Wonderstone has made a contribution to local economic development by supplying candlemaking equipment to a local company, providing it with the opportunity to increase both the number and range of candles produced.

Zeerust

In the year under review, Zeerust, assisted by the Boleng Trust, funded the rebuilding of Mmasebodule Primary School, whose previous infrastructure was in unacceptably poor condition. In addition to replacing the classrooms for Grades 1 to 7, the new school will have administration buildings, a library, Grade R classroom and a canteen area. The initial phase of construction is now complete, with the second phase due for completion in 2014.