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Sustainability report

  
This report provides a brief summary of health, safety and environmental performance across the operations of the Assore group. Assore also recognises that it has a responsibility to promote the sustainability of its business by taking an active role in shaping the development and performance of the sectors in which it operates.

This sustainability report covers all of the entities in which the Assore group has an interest and, for ease of reference, has been split into the following two sections:
– Assmang, jointly controlled by Assore 50% and ARM (African Rainbow Minerals Limited) 50%.
– Subsidiary companies of Assore.

ASSMANG (JOINTLY HELD)

This section provides a brief summary of health, safety and environmental performance across the Assmang group (comprising Khumani, Beeshoek, Black Rock (Nchwaning and Gloria mines), Dwarsrivier mines and the Cato Ridge and Machadodorp Works).

CORPORATE GOVERNANCE

Prosecutions, convictions and fines
None of the Assmang operations were subject to any prosecutions or fines during the 2009 financial year.

Six section 54 notices in terms of the Mine Health and Safety Act were served on Assmang operations during the year: four at Black Rock and one each at Khumani and Dwarsrivier. A section 55 notice was also served on Dwarsrivier during the year in respect of machinery guarding.

A Department of Labour prohibition notice was served on Cato Ridge in February 2009.

Corrective action has been taken with regard to the abovementioned notices and no legal action is anticipated.

International Standards Organisation (ISO) certification
All Assmang operations, with the exception of the recently commissioned Khumani Mine, have achieved certification to the ISO 9001, ISO 14001 and OHSAS 18001 management standards.

Health and safety
Assmang operations reported 51 Lost Time Injuries (LTIs) during the year, and recorded 2 029 lost days.This resulted in a Lost Time Injury Frequency rate of 3,29 for the year (as compared to 4,90 in the previous year). Beeshoek Mine and the Machadodorp Works have each achieved in excess of one million fatality-free shifts to date.

Regretfully, there were four fatalities in the year under review. The first fatality was at Khumani Mine, where a contracted security guard, Mr Simon Nvelele, made a fire in a drum in the guardroom and subsequently died of carbon monoxide poisoning. In January 2009, a contractor rock drill operator, Mr Mawanda Ntobovi, was killed by a fall of ground (FOG) at Dwarsrivier Mine. In February Mr Modisaotsile Elliot Morwe was killed when two dump trucks collided on the road near Khumani mine and in April a miner, Mr Ruan Feast, was killed by a FOG at Nchwaning Mine.

Occupational health and hygiene monitoring
All operations conduct medical surveillance of employees in accordance with the requirements of relevant legislation. An inquiry into possible cases of manganism at the Cato Ridge Works has been completed and a report from the chairman of the inquiry is expected in the near future.

During the year, 5 281 periodic medicals were conducted on Assmang personnel. In total, 16 133 audiometric tests were conducted over the period, with 47 cases referred for further testing.

Financial provision for closure and rehabilitation
Closure plans and rehabilitation assessments are reviewed annually at all Assmang operations. Financial provision for closure is funded via a combination of bank guarantees and provisions raised in various trust funds and is summarised in the table on the next page.

        Estimated       Estimated        
       closure cost       fund balance       Guarantees  
Operation       (R’000)      (R’000)      (R’000) 
Beeshoek       80 937       42 616       –  
Khumani       93 967       6 628       38 000  
Gloria       10 813       3 409       –  
Nchwaning       22 742       4 616       –  
Black Rock       40 305       10 259       20 065  
Dwarsrivier       24 808       6 750       9 267  
Total       273 572       74 278       67 332  
All figures as of 30 July 2009                  

There is currently no legal requirement to make financial provision for closure or rehabilitation at the Cato Ridge and Machadodorp Works

EMPLOYMENT

Employee numbers at Assmang operations increased during the year as a result of organic growth driven by recently completed projects and capital projects being constructed. The bulk of growth in employee numbers took place at Khumani and Dwarsrivier.

During the year, the number of employees at Dwarsrivier increased due to several contract employees becoming full-time employees.

Employment equity
Employment equity statistics for Assmang mining operations are used to track progress against targets established in the Broad-Based Socio-Economic Empowerment Charter for the South African Mining Industry (the ‘Mining Charter’) for the advancement of historically disadvantaged South Africans (HDSAs).These statistics also assist in monitoring progress towards meeting commitments made by Assmang operations in their Social and Labour Plans (SLPs).

The Cato Ridge and Machadodorp Works are classified as industrial facilities and thus have no obligation to comply with the requirements of the Mining Charter. Nonetheless, statistics for these operations have also been included for consistency and comparative purposes.

     HDSAs in      Target for HDSAs   
     management      in management   
Operation      %      %   
Beeshoek      48,4      40   
Black Rock      38,5      40   
Cato Ridge      73,5      Not applicable   
Dwarsrivier      49,4      40   
Khumani      57,5      40   
Machadodorp      57,9      Not applicable   
As of 30 June 2009             
            
     Women      Target for   
     in mining     women in mining  
Operation      %      %   
Beeshoek      12,0      10   
Black Rock      7,7      10   
Cato Ridge      13,9      Not applicable   
Dwarsrivier      9,2      10   
Khumani      15,8      10   
Machadodorp      15,6      Not applicable   
As of 30 June 2009             


Overall, the Assmang operations (including the Cato Ridge and Machadodorp Works) have 53,5% HDSA representation in management, and 12,5% women in production-related activities.

Contractor workforce
Contractor numbers on Assmang operations are driven by two large capital projects – construction of the new plant at Black Rock and the second phase of the Khumani project.

     Contractors as %   
     of total workforce   
Beeshoek      75,2   
Black Rock      47,0   
Cato Ridge      0,0   
Dwarsrivier      9,5   
Khumani      73,5   
Machadodorp      25,1   

SUBSIDIARY COMPANIES

This section of this report summarises the sustainability performance of the Assore subsidiary operations, namely Rustenburg Minerals Development Corporation (Rustenburg Minerals), Zeerust Chrome Mine (Zeerust),Wonderstone and Xertech.

CORPORATE GOVERNANCE

Regulatory environment
Health, safety and environmental management on Assore operations is subject to two different sets of legislation, depending on whether the facility is classified as a mine (including associated mineral processing facilities) or an industrial facility.

Health and safety management at the mining operations (Rustenburg Minerals, Zeerust Chrome and Wonderstone) is regulated by the Mine Health and Safety Act (No 29 of 1996). Environmental authorisations for mines are currently granted in terms of the Minerals and Petroleum Resources Development Act (No 28 of 2002), although government has confirmed that once this Act is amended, future mining environmental authorisations will be granted in terms of the National Environmental Management Act (No 107 of 1998).

Xertech is classified as an industrial facility, and is therefore regulated in terms of the Occupational Health and Safety Act (No 85 of 1993), with environmental authorisations being granted in terms of the National Environmental Management Act.

Prosecutions, convictions and fines
Neither Assore nor any of its subsidiary companies have been subject to any prosecutions, convictions or fines during the 2009 financial year.

A section 54 notice in terms of the Mine Health and Safety Act was served on Rustenburg Minerals as a result of an uncontrolled blast which took place on 12 March 2009 during the construction of the Zandspruit decline. Corrective action was taken with respect to revising blasting procedures and staff retraining, and no legal action is anticipated in this regard.

New appointments
In order to more effectively manage sustainability-related risks across the Assore operations, two new positions were created during the financial year 2009.

A Senior Manager: Safety, Health, Environment, Risk and Quality (SHERQ) was appointed in January 2009 to provide greater capacity to manage these areas of risk at a corporate level. The Senior Manager: SHERQ is directly responsible for coordinating SHERQ risk management, monitoring and reporting on the mines and facilities under Assore’s direct management control, and also provides targeted technical input to SHERQ management on the Assmang operations.

A Local Economic Development (LED) Project Manager was appointed in November 2008 to coordinate small business development and Corporate Social Investment initiatives for the Rustenburg Minerals and Wonderstone operations.This role is integral to the execution of commitments made in the Social and Labour Plans (SLPs) submitted to support applications for the conversion of ‘old order’ to ‘new order’ mineral rights.

Internal review and control
Inspection and review of safety, health, environmental and quality performance is conducted by site and corporate personnel on an ongoing basis to evaluate and report on progress towards targets and objectives, and where required, to identify required corrective action. Internal review and checking of performance is a requirement of the company’s ISO-certified management systems and is also used to demonstrate adherence to the quality specifications stipulated in contracts with customers.

Legal registers for all Assore operations were updated during the current financial year. Legal appointments in terms of the Mine Health and Safety Act were also reviewed and revised where necessary, to reflect changes in personnel and new activities associated with the development of underground operations at Rustenburg Minerals. Quarterly reports on compliance with safety, health and environmental legislation for all Assore operations are submitted to the Audit Committee.

International Standards Organisation (ISO) certification
In order to establish robust quality and environmental management systems for the systematic management of risk across the group operations,Assore has developed its quality and environmental management systems in accordance with the International Standards Organisation (ISO) model. All operations managed by Assore are certified to the ISO 9001:2000 quality management standard, with Wonderstone and Xertech also being certified to the ISO 14001:2004 environmental management standard.

     Date of initial      Date of initial   
     ISO 9001      ISO 14001   
Operation      certification      certification   
Wonderstone      15 April 1998#      7 March 2002†   
Rustenburg Minerals      27 October 2007      Yet to be certified   
Xertech      29 August 2005      28 August 2009   
# Originally certified to ISO 9001:1994 and later recertified to ISO 9001:2000
Originally certified to ISO 14001:1996 and later recertified to ISO 14001:2004

All ISO audits are conducted by an accredited external service provider,TUV Rheinland. Recertification audits are conducted on a three-yearly interval, and surveillance audits are carried out in the intervening years by the same company. No non-conformances or major adverse findings were identified during the ISO audits on Assore operations during the current financial year.

Stakeholder engagement
Assore interacts with a wide range of internal and external stakeholder groups in the pursuit of its business. Each group of stakeholders has different needs in terms of the type of information required as well as mode and frequency of interaction, and the company’s stakeholder engagement has been tailored accordingly, as summarised in the table below.



Stakeholder group      Responsibility      How we engage
Investors      Dealing properly with all stakeholders in order      Annual and quarterly reports, SENS
     to serve the best interests of shareholders on      announcements, press statements
     a sustainable basis. Commitment to full       
     compliance with all relevant laws and rules,       
     good corporate governance, transparency       
     and fair dealing       
Employees and their      Employing the most appropriately skilled      ‘Toolbox talks’, inductions, health and safety
representatives      individuals and investing in their development      meetings, internal publications, notice boards,
     in a non-discriminatory environment      union negotiations, career path planning
Business partners      Seeking mutually beneficial long-term      Representation on the Assmang board and
     relationships with joint-venture partners      Executive Committee, board meetings for
     and industry peers      individual Assore operations, active participation
        in industry associations
Contractors and suppliers      Seeking mutually beneficial long-term      Contract negotiations, tender processes, safety
     relationships with contractors and suppliers      inductions, health and safety meetings, site
     based on fair and ethical practices      inspections and audits, performance reviews
Customers      Establishing and maintaining mutually      Customer site visits, contract negotiations,
     beneficial long-term relationships with      quality management system, conference
     customers based on fair and ethical practices      attendance
Government      Observing the laws of the countries in      Statutory reporting, inspections by government
     which the group operates      representatives, permit applications, public
        participation process for environmental impact
        assessments, engagement on targeted issues
Host communities      Promoting strong relationships with, and raising      Public meetings, public participation process for
     the capacity of the communities in which the      environmental impact assessments, participation
     group’s activities are located      in local economic development initiatives, funding
        of corporate social responsibility initiatives
Non-governmental      Development and maintenance of constructive      Engagement on targeted issues
organisations      relationships with relevant non-governmental       
     organisations       

Involvement with industry associations
Assore recognises that it has a responsibility to promote the sustainability of its business by taking an active role in shaping the development and performance of the sectors in which it operates. Assore has therefore encouraged its employees to assume leadership roles in industry associations which aim to promote the use and development of commodities which it produces and to encourage cooperation between companies in these industry sectors to address issues of common concern.

During the previous financial year, Mr Alastair Stalker of Ore & Metal Company Limited was elected as chair of the Executive Committee of the International Manganese Institute (IMnI) that represents manganese ore and alloy producers, manufacturers of manganese-based products, traders, industry service providers and companies using manganese to manufacture their products.

In May 2009, Mr Alistair McAdam (also of Ore & Metal Company Limited) was elected to the Executive Council of the International Chrome Development Association, which performs a similar function for the international chrome industry.

Health and safety
There were no fatalities on any of the Assore operations during the current year.

LTIs statistics and LTIFRs for each of the operations for the financial year are summarised in the table below.

     Hours      Lost time      LTIFR   
Operation      worked      injuries      %   
Rustenburg Minerals      670 725      4      5,96   
Zeerust      60 984      –      –   
Wonderstone      233 046      4      17,16   
Xertech      65 340      –      Not applicable   
                 

LTI is a work related injury that results in the employee being unable to attend work at his/her place of work, performing his/her assigned duties on the next calender day (whether a scheduled work day or not) after the day of the injury. LTIFR is the rate of LTIs per million man hours.

Occupational health and hygiene monitoring
Workforce occupational health surveillance is carried out annually to fulfil the occupational health monitoring requirements of the Mine Health and Safety Act (for mining operations) and the Occupational Health and Safety Act (for Xertech). Health surveillance is conducted on both employees and contractors, with suspected cases of occupational disease identified during routine surveillance being referred for specialist follow-up.Where further investigation confirms that an employee has developed an occupational disease, the case is referred for compensation to the relevant authority (either Rand Mutual for mining operations or the Compensation Commissioner for industrial facilities).The following table sets out the extent of hygiene monitoring conducted during the year.

      Employees     Contractors      Cases      Cases   
     screened      screened      referred for      reported   
     during      during      medical for      compen-
     2009      2009      follow-up      sation   
Rustenburg                       
Minerals and                       
Zeerust      161      141      20      1   
Wonderstone      105      7      1      1*   
Xertech      32      –      –      –   
* One case of suspected Noise Induced Hearing Loss (NIHL) was identified at Wonderstone during 2008 and referred to Rand Mutual
   for review but the claim was rejected


Occupational hygiene monitoring is undertaken on all operations to demonstrate compliance with applicable legislation: this takes place quarterly for mining operations and bi-annually at Xertech.

Environmental performance
During 2008, environmental authorisation in terms of section 24(g) of the National Environmental Management Act was obtained for four diesel
storage tanks at Rustenburg Minerals. No reportable environmental incidents occurred on the Assore operations during the year.

In June 2009, a water supply review was undertaken for the Rustenburg Minerals operation in preparation for the commencement of underground mining, which will require more water than the existing surface operations. As part of this process, the mine water balance was reviewed and existing water supply boreholes on the property were pump tested to confirm their long-term reliable yield. Based on this evaluation, budget provision has been made to drill additional boreholes and establish additional water storage capacity on site in the ensuing financial year.

Data on aspects of environmental performance, including waste generation and consumption of resources such as water, electricity and fuel have been collected and reported on by the operations in a variety of formats.A review of environmental monitoring and reporting procedures is currently under way to ensure that a consistent approach to environmental monitoring is adopted across the operations, and that the indicators reported on comply with the Global Reporting Initiative guidelines.

During the year, Xertech worked with the National Cleaner Production Centre (NCPC) as part of a project funded by the Department of Trade and Industry to promote production efficiency, optimisation of resource consumption and waste reduction. A baseline assessment of the Xertech operation has been completed, and opportunities for process optimisation which have been identified will be investigated in greater detail during the ensuing financial year.

Financial provision for closure and rehabilitation

Financial provision for mine closure and rehabilitation of the Rustenburg Minerals, Zeerust Chrome and Wonderstone mining operations is required in terms of the Minerals and Petroleum Resources Development Act, and the current status of closure provisioning is summarised in the table below.The closure liability for Assore operations is reviewed annually and is funded via a combination of bank guarantees and contributions to the AMT Environmental Fund.

               Current           LOM   
          Environmental      guarantees      Years to      in terms   
     Total liability      Fund      in place      realise liability      of current   
Operation      (R’000)      (R’000)      (R’000)      provision      mining right   
Rustenburg Minerals      12 306      5 474      6 866      12,8      29   
Zeerust Chrome      1 028      277      40      27,3      29   
Wonderstone      3 464      3 915      5 659      –      29   
Total      16 798      9 666      12 565             

All figures in Rand as of January 2009, being the most recent submission to the Department of Mineral Resources

Xertech is classified as an industrial (rather than mining) facility, and there is therefore no legal requirement to make financial provision for closure or rehabilitation of this operation.

Rehabilitation of the mine sites is conducted on an ongoing basis and comprises reshaping of land forms and revegetation of mined out areas, completed waste rock dumps and tailings facilities. Rehabilitation planning places particular emphasis on erosion control and the use of indigenous species to maximise the sustainability of revegetation. Completed areas are audited annually by an external consultant to determine the success of rehabilitation, and where necessary, recommendations on improved land management and rehabilitation practices are incorporated into the rehabilitation methodology.

EMPLOYMENT

Employment equity
Employment equity statistics for mining operations are collated on a monthly basis and reported to the Department of Mineral Resources (formerly the Department of Minerals and Energy). These data are used to track progress against targets established for the mining sector in the Broad-Based Socio-Economic Empowerment Charter for the South African Mining Industry (the ‘Mining Charter’) for the advancement of historically disadvantaged South Africans (HDSAs).These statistics also assist in monitoring progress towards meeting commitments made by Rustenburg Minerals and Wonderstone in their Social and Labour Plans (SLPs).

Xertech is classified as an industrial facility and thus has no obligation to comply with the requirements of the Mining Charter. Nonetheless, statistics for Xertech have also been included for consistency and comparative purposes.

          Target %             
     % HDSAs      for HDSAs           Target %   
     in manage-      in manage-      Women      for women   
Operation      ment      ment      in mining      in mining*   
RMDC      40,0      40      20,1      10   
Wonderstone      25,0      40      16,8      10   
Xertech#      50,0      Not      6,3      Not   
          applicable           applicable   
*  As at 30 June 2009
# At Xertech, ‘women in mining’ is interpreted as women engaged in production activities

One of the major challenges in achieving workforce transformation is the industry-wide shortage of suitably qualified HDSA candidates. As a step towards developing greater HDSA capacity and offering career opportunities to members of local communities, Rustenburg Minerals has extended two bursaries to fund the undergraduate university studies in Mining Engineering and Mechanical Engineering.

Contractor workforce
Assore outsources certain functions to contractors, particularly with respect to security, cleaning and waste disposal, and the proportion of contractors as a percentage of the total workforce is presented in the table below.

     Contractors as %   
   of total workforce   
Rustenburg Minerals    58,8   
Wonderstone    0,0   
Xertech    22,0   
As at 30 June 2009      

Rustenburg Minerals currently uses a contract mining company for the open-cast operations at Rustenburg, and the operation of chrome processing plants at Rustenburg Minerals and Zeerust Chrome is also outsourced.

The Rustenburg Minerals workforce is currently being restructured to reflect the changing nature of the mining operation, which will result in contract mining being phased out as surface mining activity downscales and is replaced by owner-operated underground operations.