Assore strongly endorses the
In terms of the MPRD Act, which came into effect on 1 May 2004, the state has assumed sovereignty and custodianship of all mineral rights in South Africa and grants prospecting rights and mining rights to applicants based on the merits of their applications (which are designated as
The Mining Charter is intended to facilitate the entry of historically disadvantaged South Africans (HDSAs) into the mining industry. The scorecard which the state has issued pursuant to the Mining Charter required, inter alia, that mining companies should achieve 26% HDSA ownership of mining assets by 1 May 2014. The Mining Charter also requires, inter alia, that mining companies provide plans for achieving employment equity at management level and procuring goods and services from black empowered organisations on a preferential basis in accordance with the predetermined criteria set out in such plans. Since 2004, with a view to meeting the Charter’s requirements, Assore, through its various group companies, has achieved the following empowerment milestones:
- Concluded an empowerment transaction with Mampa Investment Holdings (being the commercial arm of the Mankwe Development Foundation) (Mampa) in April 2004, pursuant to which
new-ordermining rights for the chrome operations in Rustenburg Minerals Development Company Proprietary Limited (Rustenburg Minerals) on the farms Groenfontein, Zandspruit and Vogelstruisnek were obtained.
- Having met the requirements of the MPRD Act regarding conversion of
old-ordermining rights, Assmang has secured new-ordermining rights for all its operations. The rights for the manganese deposits at Black Rock (comprising Assmang’s Nchwaning and Gloria mines) and the chrome ore rights (Dwarsrivier) have been executed and lodged for legal registration.
- Successful conversion and execution of
old-ordermining rights to new-ordermining rights for pyrophyllite (Wonderstone).
- Implemented a preferential procurement policy at all its operations (refer “Preferential procurement”).
- Developed social and labour plans (SLPs) for each of its operations, as well as local economic development (LED) projects which support the integrated development plan of the relevant local authority. The plans, which have received the approval of the relevant departments, include the construction of schools and crèches, food security projects, and presentation of programmes on adult education, health and safety, and environmental awareness (refer “Sustainability report“, located on the group’s website under “Annual reports” in the “Investor centre”).
The extent of compliance with the Charter is reported on and monitored on a regular basis, both at Exco level and by the board, through the Social and Ethics Committee and specifically with regard to
Following the introduction of the MPRD Act, Assore has, specifically at a holding company level, entered into empowerment- related transactions, which have resulted in control by HDSAs comprising 26,07% of Assore’s ordinary shares as follows:
|Fricker Road Trust||11,79|
The Boleng and Fricker Road trusts
The Boleng and Fricker Road trusts (the trusts) have been established for the benefit of HDSAs and
In terms of the agreements between Assore and the trusts, the Fricker Road Trust qualified for dividends (after dividends tax) of R16,4 million (2014: R13,3 million) during the year, while the Boleng Trust is entitled to a
Dr TG Sibiya (Chairman)*
Ms K Makhaya*
Ms TPJ Ngxulelo*
* Independent trustee.
Assore has concluded agreements with the trusts in order to regulate the respective relationships between the parties to ensure the continued compliance by the trusts (as the Assore group’s BEE partners) with the direct ownership requirements of the Mining Charter and the appropriate restrictions on the transfer of Assore shares by the trusts.
During the 2015 financial year, and pursuant to the trust deeds, the trustees have approved expenditure on its major projects amounting to R9,6 million (2014: R6,9 million) and have committed themselves to spending a further R15,1 million, details of which are as follows:
|Zeerust Chrome Mines||Mmasebodule Primary School||13 524||267||13 791|
|Rustenburg Minerals||Imfundo Likusasalethu, primary educational intervention||1 651||1 310||2 903|
|Rustenburg Minerals||Makgope Primary School Media Centre||1 284||16||1 300|
|Wonderstone||Tsholonang Children’s Disability Centre||–||4 461||4 461|
|Wonderstone||Student boarding facility at Ottosdal||–||2 500||2 500|
|Wonderstone||Support of variousstudent requirements, including bursaries and transport||–||5 305||5 305|
|Wonderstone||Provision of teachers’ salaries||–||618||618|
|Wonderstone||Communal lecture and training facility||–||593||593|
|16 459||15 070||31 529|
Further detail of the expenditure on these projects is included in the “Sustainability report” located on the group’s website under “Annual reports” in the investor centre.
Independent trustees of Boleng and Fricker Road trusts
The Assore Employee Trust
Independent trustees of Assore Employee Trust
The Assore Employee Trust was established by Assore for the economic benefit of the
Ms MC James‡#
Ms NP Mngomezulu‡*
Ms WT Mnisi‡^
^Employee representative trustee.
During the 2015 financial year, the trust effected dividend rights distributions to employees totalling R10,7 million (2014: R10,1 million). An independent valuation performed as at 30 June 2015 indicates that the value of equity rights granted to employees amounted to R2,0 million (2014: R5,1 million) (refer note 17,
Assore is committed to bringing previously disadvantaged South Africans into the mainstream of the economy and the mining industry by identifying and developing business opportunities and by making them available to broad- based black economic empowered (BBBEE) suppliers at all its operations. Without compromising on quality, Assore has adopted a policy of precluding vendors who do not have valid empowerment credentials from supplying goods and services to its operations. A summary of the percentage BBBEE procurement measured against total discretionary procurement is presented in the table below:
|R million||R million||% BBBEE†|
|Assmang||11 424,5||12 243,0||107,2|
|African Mining and Trust||72,5||77,9||107,4|
|Assmang||12 309,3||16 311,7||132,5|
|African Mining and Trust||84,8||84,3||99,4|
|#||Total discretionary procurement is defined as total procurement less procurement effected through related entities (intercompany transactions).|
|*||Aggregate BBBEE expenditure is recognised based on the respective recognition levels of the suppliers, in accordance with the codes published by the Department of Trade and Industry (dti).|
|†||Expenditure of levels 1 to 3 suppliers is recognised at more than 100% in terms of the dti codes.|
The decline in the percentage of BBBEE expenditure within Assmang is due mostly to a lower level of expenditure in levels 2 and 3 (declines of 8,1% and 4,6% respectively), with corresponding increases in the lower levels (levels 4 to 8).
The recognition percentages for the group’s subsidiary companies have improved due to ongoing insistence by procurement staff to source from sufficiently empowered suppliers. The level of expenditure at Rustenburg Minerals and Zeerust is expected to decline due to reduced mining activity (refer here).
The amended dti Codes of Good Practice came into effect on 1 May 2015. These amended codes make provision for changes in the scoring methodology. All suppliers with a current verification certificate qualify as an empowering supplier for the validity period of the current certificate, resulting in the current results being maintained up to that date. An overall decrease in scores is, however, expected from 1 May 2016, as not all suppliers will be granted empowered status in the next verification and some suppliers will have lower ratings as a result of the introduction of the amended codes.