SOCIAL AND LABOUR PLAN - zitholele - Largo/3. Environmental Impact... · AAIC proposes to develop...

THERMAL COAL

SOCIAL AND LABOUR PLAN

MINING RIGHT APPLICATION

NEW LARGO COLLIERY

Submitted as Annexure G as contemplated in Regulation 46 of the Mineral and Petroleum

Resources Development Act, 2002 (Act number 28 of 2008)

Social and Labour Plan: New Largo Colliery| In compliance with Regulation 46 of the Mineral and Petroleum Resources and Development Act, 2002

PART ONE Preamble


1. Preamble

1.1 Background

About Anglo American Thermal Coal

Anglo American Thermal Coal (referred to in this document as Thermal Coal) is a division of

Anglo American plc. We wholly own and operate seven mines and have a 50% interest in Mafube

Colliery which is jointly owned by Exxaro. We also have a 73% interest in Zibulo and Kriel

collieries, through our subsidiary, Anglo American Inyosi Coal (AAIC).

All our mines, with the exception of one situated in the Free State, are located in the Mpumalanga

province. Our mines supply thermal coal to both the export and local markets and metallurgical

coal for export.

Our coal is exported via the Richards Bay Coal Terminal in which we have a 27% interest. In

addition, our New Vaal, New Denmark, Kriel and Mafube mines supply thermal coal to Eskom,

South Africa‟s state-owned electrical power utility.

Our Isibonelo Colliery produces five million tonnes of coal per annum for Sasol Synthetic Fuels

under a 21-year supply contract. At the end of 2010, we employed a total of 9,300 employees and

7,100 contractors.

Anglo American Inyosi Coal

In 2007, Anglo American announced the formation of Anglo American Inyosi Coal (AAIC), a broad-

based black economic empowerment company in which Anglo American has a 73% shareholding.

AAIC houses key future domestic and export-focused coal operations, including Kriel Colliery and the

newly commissioned Zibulo multi-product mine. It also holds the greenfield projects of Elders, New

Largo and Heidelberg.

Inyosi is led by the Lithemba Consortium and Pamodzi Coal, and has a beneficiary base that will benefit in

excess of 27,000 individuals, the majority of whom are female Historically Disadvantaged South Africans

(HDSAs). Women‟s Development Bank Investment Holdings is also a shareholder. An independent broad-

based Community Trust that will benefit HDSA communities around AAIC operations has been formed.


1.2 Overview

This Social and Labour Plan (SLP) has been compiled in accordance with the Mineral and Petroleum

Resources Development (MPRD) Act 28/2002 for the envisaged life of mine at New Largo Colliery, a

business unit of Anglo American Inyosi Coal (referred to in this document as AAIC). AAIC is 73% owned by

Anglo American South Africa Capital, a subsidiary of Anglo American plc.

This SLP outlines the proposed mine’s plans and objectives pertaining to:

Human resources development,

Local economic development, and

The management of downscaling and retrenchments.

Progress against these plans and objectives will be reported annually in the mine‟s SLP reports, following

the commencement of operations at New Largo Colliery for the remaining life of the mining right.

The objective of this SLP is:

To promote employment and advance the social and economic welfare of those who work for

New Largo Colliery and to uplift all the stakeholders in the communities in which it operates;

To contribute to the transformation of our industry; and

To ensure that as a holder of Mining Rights, New Largo contributes to the socio-economic

development of the communities in which it operates, including major labour sending areas.

1.3 Our philosophy

Anglo American aims to preserve and uplift the socio-economic well-being of its host communities.

This commitment is clearly set out in a statement made by the company‟s founder, Sir Ernest

Oppenheimer, 94 years ago. He said:

“The aim of this Group is, and will remain, to make profits for our shareholders, but to do this in such a

way as to make a real and lasting contribution to the communities in which we operate.”

Anglo American aims to realise Sir Ernest‟s vision by ensuring that its operations positively impact the

communities that are directly or indirectly affected by them. While Interventions to achieve this may

vary according to the individuals and areas concerned, the process is driven by a strong focus on and

commitment to community engagement and sustainable development.


In 2002, Anglo American rolled out its Good Citizenship: Our Business Principles, which sets out the

values and standards that direct how we run our business. The following extract guides our dealings

with stakeholders:

“We aim to promote strong relationships with and enhance the capacities of the

communities of which we are a part. We will seek regular engagement about issues

which may affect them. Our support for community projects will reflect the priorities of

local people, sustainability and cost-effectiveness. We will increasingly seek to

assess the contribution our operations make to local socio-economic development

and report upon it.”

Furthermore, our sustainable development principles define that we will:

Be ethical, efficient and create value

Create meaningful employment in safe, healthy environments

Reduce our environmental footprint and contribute to biodiversity

Increase innovation, technology and process involvement

Contribute to building more adaptable societies

The objectives of the MPRD Act and the SLP are central to the strategic and operational parameters

of Anglo American, and we will endeavour to meet these objectives for the benefit of our employees,

our local communities, the mining industry and South Africa as a whole.

This SLP is intended to develop human potential and create opportunities for individuals to sustain

themselves, their families and their communities throughout their working lives. In addition, this plan

will help to minimise the socio-economic impact of job losses in the communities where Thermal Coal

operates.

We plan to build skills that are recognised by the National Qualifications Framework and are portable

outside the workers‟ current employment. The success of this plan relies on both AAIC and the

employees themselves taking responsibility for their well-being and energetically pursuing the

opportunities available to ensure their potential is realised.

New Largo Colliery will support the well-being of its communities through initiatives that will be

integrated with the local and district municipalities‟ Local Economic Development and Integrated

Development planning forums and processes.

Thermal Coal subscribes to the principles of the 2002 World Summit on Sustainable Development

and increased investor interest in social and ethical issues.


1.4 New Largo development

AAIC proposes to develop an opencast coal mine at its New Largo reserves situated 30 kilometres

west of eMalahleni and 100 kilometres east of Johannesburg.

The company has prospecting rights over coal resources of about 12,000 hectares located on various

portions of the farms Bankfontein 216 IR, Heuvelfontein 215 IR, Klipfontein 568JR, Prinshof 2 IS,

Smaldeel 1 IS, Van Dyksput 214 IR, Vlakfontein 569 JR, Honingkrantz 536 JR, Klipfontein 566 JR

and Roodepoortjie 326 JS.

We propose mining the number two and four seam reserves via opencast methods owing to prevailing

low strip ratios. The main reserve is ideal for the deployment of two large electric walking draglines,

used extensively in the eMalahleni area. These have proved to be the most cost-effective means of

overburden removal.

The smaller and more fragmented nature of outlying pits would be more effectively exploited by

means of truck and shovel operations. Run of mine (ROM) reserves are estimated to be

approximately 700 million tonnes. The production rate (excluding ramp up and ramp down periods) for

the mine will be an estimated 14 Mtpa and the life of mine about 50 years.

The New Largo project area and resource base is covered by three prospecting rights. The new order rights

cover the same surface areas as the old order prospecting permits as defined below:

1. New order prospecting right deemed new application PP0061999, termed New Largo 1

2. New order prospecting right deemed new application PD0002002, termed New Largo 2

3. New order prospecting right deemed new application PB0012004, termed New Largo 3

These three rights are regarded by Thermal Coal as being a single operational colliery from the

standpoint of natural, human and economic resources.

1.5 Definitions

In the following text, these terms should be clearly distinguished:

Thermal Coal encompasses all personnel at head office, technical divisions and mining

operations, and is a wholly-owned division of Anglo American plc. .

Thermal Coal operations include all operational and technical personnel, but exclude

head office personnel.

New Largo Colliery is a specific operational entity and business unit of AAIC.


1.6 Particulars

Name of the company: Anglo American Inyosi Coal

Name of the proposed mine New Largo Colliery

Physical address Mining and Property Law Department

First Floor, 45 Main Street

Johannesburg

2001

Postal address Anglo Operations Limited

PO Box 61587

Marshalltown

2107

Telephone number +27 11 638 3781

Fax number +27 11 638 4608

Mine address Rietvlei 64 IS Farm

Portions RE1 and 7/1

Mine postal address Private Bag X9

LERAATSFONTEIN

1038

Telephone number + 27 13 691 5153

Mine fax number + 27 13 691 9200

Location of mine New Largo Colliery will be situated approximately 15km north of Ogies on the Ogies/Balmoral road in the Mpumalanga province. It will form part of the Witbank Coalfield within the Highveld Magisterial District and Regional Services Council.

Commodity Coal

Life of mine 50 years

Breakdown of employees per

sending area

This Social and Labour Plan refers to a proposed new mine. Therefore this information is not yet available.

Financial year January to December


PART TWO

Human Resources and Development

Programme


2. Human resources and development programme

New Largo Colliery will employ approximately 710 employees at its opencast operation, coal

processing plant and support functions, including health and safety, human resources, administration

and technical services.

Certain functions will be provided by Thermal Coal‟s Centralised Services, while others will be

outsourced. Where necessary, Thermal Coal and New Largo Colliery will ensure that permanently

employed contractors within its core business will comply with the legislative requirements pertaining

to labour relations. Thermal Coal‟s human resources development strategy incorporates several key

focus areas. These include:

Talent management

Performance management

Competency-based career development, including learnerships, the Thermal Coal

bursary scheme and graduate trainee programmes

Adult-based education and training (ABET)

Empowerment group capacity-building

Thermal Coal has 10 mining operations in South Africa, and the management of talent for senior

positions on these mines is monitored and managed from the corporate office. Employees are

transferred across the operations as part of their development plans and in response to operational

requirements.

New Largo Colliery intends making a contribution to the economic, social and educational well-being

of its host communities. This will include local business development and providing opportunities for

workers from disadvantaged backgrounds. All human resources matters in this plan reflect divisional

statistics and plans as well as those of the proposed New Largo Colliery. These include:

Literacy levels

Hard to fill vacancies

Career progression and mentorship plans

Internship and bursary allocation

Employment equity

Plans to meet the Mining Charter requirements

New Largo Colliery will fully subscribe to the principles of the Mining Charter and the

undertaking by Anglo American regarding the empowerment and employment of HDSAs to

achieve the required targets.


2.1 Skills development plan

New Largo Colliery will comply with the requirements of the Skills Development Act, which includes

the submission of a Workplace Skills Plan and an Annual Training Report as per the Sector Education

and Training Authority‟s requirements. The payment of levies and the claiming of grants will be

conducted in accordance with the provisions of the Mining Qualifications Authority (MQA).

2.1.1 Skills development facilitator

New Largo Colliery will appoint a dedicated skills development facilitator within six months of the

commencement of operations. This facilitator will administer the development and submission of the

Workplace Skills Plan and Annual Training Report to the MQA.

2.2 Number and education levels of employees

Thermal Coal has provided literacy classes for employees since 1990. While the majority of our

operations have ABET centres on site, those that do not assist employees and their dependants by

providing transport to and from the nearest ABET centre through a dedicated bus service. We also

provide ABET for members of our host communities. The company‟s literacy profile can be seen in

the table below.


Table 1: Number and education levels of employees: Thermal Coal Operations

LEVELS OF LITERACY MALE FEMALE TOTAL

BAND NQF

LEVEL OLD SYSTEM African Coloured Indian White African Coloured Indian White Male Female

General

Education and

Training (GET)

1 No Schooling/

Unknown 297 0 0 0 8 0 0 0 297 8

Grade 0/Pre 0 0 0 0 0 0 0 0 0 0

Grade 1/Sub A 30 0 0 0 0 0 0 0 30 0

Grade 2/Sub B 48 0 0 0 0 0 0 0 48 0

Grade 3/Std 1

ABET 1 268 0 0 0 1 0 0 0 268 1

Grade 4/Std 2 352 0 0 0 4 0 0 0 352 4

Grade 5/Std

3/ABET 2 296 0 0 0 8 0 0 0 296 8

Grade 6/Std 4 355 0 0 0 11 0 0 0 355 11

Grade 7/Std

5/ABET 3 485 0 0 3 16 0 0 4 488 20

Grade 8/Std 6 321 0 0 18 14 1 0 12 339 27

Grade 9/Std 7/

ABET 4 278 2 2 25 23 0 0 14 307 37

Further

Education and

Training (FET)

2 Grade 10/Std 8/N1 566 8 5 270 144 2 1 18 849 165

3 Grade 11/Std 9/N2 475 12 5 245 155 4 3 25 737 187

4 Grade 12/Std 10/

N3 1656 18 33 638 436 10 9 160 2,345 615

Higher Education

and Training

(HET)

5 Diplomas/

Certificates 454 5 11 362 197 4 4 72 832 277

6 First degrees/

higher diplomas 87 6 7 92 48 0 2 34 192 84

7 Honour /Master‟s

degrees 21 0 2 30 16 4 0 17 53 37

8 Doctorates 0 0 0 3 0 0 0 0 3 0

TOTAL 5,989 51 65 1,686 1,081 25 19 356 7,791 1,481


2. 3 New Largo literacy profile

New Largo Colliery will submit a literacy profile within six months of the commencement of operations,

and it is anticipated that all new employees will have qualifications above ABET level four (4).

Members of the workforce will be encouraged to obtain skills or qualifications that are recognised by

the National Qualifications Framework and are registered through the MQA. These qualifications

include non-mining skills that will assist employees in areas other than mining. Such skills will be

identified within the first year of operation.

2.4 Learnerships

The five-year plan for learnerships at New Largo Colliery will be submitted once operations

commence. The objective of this plan will be to maintain the availability of competent technical people

on the operation to avoid the future possibility of shortages of these essential skills.

2.5 Hard to fill vacancies

At Thermal Coal, we have initiated a number of capacity-building initaitives to become self-sufficient in

the supply of labour. One of these initiatives is the existence of an in-house bursary scheme. In 2009,

this included 166 group vacation students, 135 trainees and eight technikon students who were

employed as part of the Joint Initiative for Priority Skills Acquistion (JIPSA). In addition, we had 321

learners in the system.

We continuously strive to provide training and development opportunities to address the critical skills

shortage in South Africa and have created internal trainee positions for surveyors, ventilation,

environmental and safety officers to develop these scarce skills internally.

The following positions are regarded as hard to fill within Thermal Coal:

Geologists

Electrical engineers

Mechanical engineers

Mining engineers

Surveyors

Metallurgists

Tradesmen

Hard to fill vacancies are addressed through bursary allocation programmes, study assistance

schemes and the provision of learnerships and skills programmes. Employees are encouraged to

study in fields where there is a scarcity of skills.


2.6 Role and activities of the MQA

New Largo Colliery will participate in MQA structures through Thermal Coal working groups. This

participation includes:

The writing and validation of unit standards,

The design and validation of qualifications, and

The design and validation of skills programmes and learnerships.

2.7 Career progression in Thermal Coal

At Thermal Coal, we continuously look for opportunities to further enhance our career development

planning processes for employees. We strive to have generic career paths for all disciplines, as per

the Mining Charter‟s requirement, and work with individuals to develop a customised career path that

will be most suitable for them. This is an ongoing initiative which we continue to refine.

The company has also developed, implemented and communicated role profiles to all employees in

Band 6 and above. In addition, we have extended role profiles to all our Professionals in Training

(graduates who have just completed their academic studies) in Band 7.

This enables members of our workforce to manage their careers more effectively and to pursue

specific career opportunities, not only within Thermal Coal, but within the Anglo American Group.

A generic career path framework for first-line managers, managers of managers and senior leadership

in the organisation has been embedded through:

The establishment of centres to assist individuals in understanding their development needs

and career progression. Three of these centres are aimed at younger, high potential

candidates. We have extended this to include a larger employee population.

Thermal Coal offers a full suite of development tools that will aid employees at all levels in

identifying their key strengths as well as areas for further development. Employees are

selected to participate in these based on their development plans as well as their potential to

fulfil more senior roles in the organisation.

Career development panels per discipline allow for the alignment of individuals‟ development

along the discipline‟s career path. This process is fully embedded within the organisation and

takes places at least twice a year in all disciplines.

Individual development plans are reviewed bi-annually as part of the performance

management cycle.

Bi-monthly human resource planning and development meetings are held to monitor

individuals‟ development against this framework.


The framework forms the basis for the integration of role profiling, recruitment and selection, talent

management, learning and development, career planning and performance management.

2.8 Coaching and mentoring for employees

As per the Mining Charter‟s requirements, we have investigated further opportunities to enhance our

mentorship programme. A refresher programme will allow for the better matching and closer

monitoring of mentor-mentee relationships. We also provide employees with the opportunity to be

mentored as part of the talent management and personal development planning processes. We

specifically focus on HDSAs, with particular emphasis on the development of women.

Employees are afforded the opportunity to participate in mentoring relationships with an individual

they feel could add value to their growth and development. This occurs particularly at the following

levels:

All graduates brought into the organisation are assigned „buddy‟ and technical mentors who

provide support and guidance in the early stages of their careers

Middle to senior management – aimed at employees in Bands 5 and 6

Senior leadership – aimed at Band 4 and above

Executive leadership – aimed at members of the mine executive committee

The effectiveness of the mentoring relationship is monitored through our career development plans.

We also use external coaches who are contracted to provide support and guidance to employees at

different levels of the organisation.

Emphasis is placed on developing and coaching senior-skilled employees to progress to first-line

supervisors. The focus is specifically on HDSA employees to ensure that we prepare sufficient

numbers of future leaders for the demands created by the growth of our company.

Coaching and mentorship development checklist

Item Yes No

Annual identification of coaching and mentoring requirements is aligned to career paths

X

Appropriate guidelines are in place to administer the coaching and mentoring process

X


A formal system is in place to monitor, evaluate and improve the coaching and mentoring process

X

The provision of external coaching and mentoring X

A diverse group of trained coaches and mentors is in place X

2.9 Talent management

We have a talent management strategy that caters for the needs of the company and the individual.

This results in a net gain for both and a competitive edge for our organisation. Talent management is

a continuous process and does not solely rely on recruitment but focuses strongly on retention and

development. Our goal is to become the employer of choice and thus we focus on appreciating each

individual and keeping them by winning over their hearts and minds.

From January 2011, we introduced changes to the way we manage the development of our people.

These changes mean that, for the first time, we have a common global capability framework for Anglo

American plc.

The People Development Way

We have refreshed our existing WiWTTSiA framework to create one common global capability

framework called the People Development Way. This sets out the behavioural attributes, knowledge,

skills, experience and potential required to succeed as a company and as individuals. This framework

and our new interactive development portal will provide employees with the tools and information

needed to help them take ownership of their career development.

2.10 Mentoring of empowerment groups

As the largest mining company in South Africa, Anglo American has been at the forefront of creating

sustainable black economic empowerment (BEE). At Thermal Coal, we have embraced the spirit of

transformation by creating mining companies that are managed by HDSAs.

The following BEE transactions have taken place:

Thermal Coal and Ingwe announced the signing of the Eyesizwe BEE transaction in 2000.

This involved the transfer of Arnot Colliery and New Clydesdale from Thermal Coal to

Eyesizwe.

We retained an 11% shareholding in the venture and played a role in the mentorship and

transfer of knowledge to the management of this company. Following this, Eyesizwe was able


to successfully acquire the coal holdings of Kumba and created Exxaro, one of the largest

coal producers in South Africa today.

Mafube Colliery is a 50:50 joint venture between Thermal Coal and Exxaro – a company that

has become a highly-respected and sustainable mining entity that enjoys a strong relationship

with Thermal Coal.

Thermal Coal sold its Kwazulu-Natal reserves comprising more than 100 million saleable

tonnes of coal to BEE mining company Leeuw Mining and Exploration (LME).

JPI Leeuw and Associates owns an 80% shareholding in the venture, with the remaining

shareholding held by the management of LME and Anglo American Zimele, the company‟s

business development and empowerment arm. Thermal Coal has seconded a section

manager to assist in the management of the operation and the transfer of mining skills to

Leeuw Mining management. Assistance is also provided for mine planning and the

commercial aspects of running the business.

In 2007, our Wonderfontein and Belfast project reserves were sold to Umsimbithi Mining. This

company is 80% owned by Mbokodo Mining – while Thermal Coal and the Anglo American

Khula Mining Fund – a joint venture between Anglo American and Khula Enterprise Finance,

each hold 10%. Mbokodo Mining is a black-owned joint venture between Umcebo Mining and

Lithemba Mining Pty Limited.

The total resources at Wonderfontein and Belfast are estimated to be in the region of 130

million tonnes, and the feasibility study has been completed. AATC has provided technical

support throughout the feasibility by providing a technical manager for consulting purposes as

well as funding and independent review of the feasibility study. A mining right application has

been lodged.

At the end of 2007, Thermal Coal announced the formation of a R7 billion black empowered

coal mining company. Through the deal, Inyosi – a newly-established broad-based BEE

company – purchased a 27% stake in AAIC which houses key future domestic and export

focused coal operations. The deal ensures the meaningful participation of previously

disadvantaged South Africans in the industry and provides experience in mining at both board

and operational levels. The proposed New Largo Colliery is an AAIC project.

2.11 Mentorship through Anglo American Zimele

Anglo American Zimele creates and develops commercially viable and sustainable small and medium

enterprises (SMEs) by providing empowerment opportunities and mentorship for previously

disadvantaged South Africans.


Over the past 20 years, the initiative has become a catalyst for emerging black business, with the

knock-on effect being sustainable job creation and socio-economic development in predominantly

rural and peri-urban mining communities. Anglo Zimele currently operates four funds. These include:

The Supply Chain Fund

This fund collaborates with our procurement departments to identify black suppliers and facilitate

business opportunities for black-empowered SMEs within Anglo American business units. It assists in

pairing up black entrepreneurs with businesses which seek to transform their ownership in line with

the BEE Scorecard, and also facilitates partnerships with black entrepreneurs who have viable

business ideas and teams of people who can help make these a reality.

On a financial level, Anglo Zimele invests in businesses by means of minority equity and loan finance.

This is supplemented with practical support, mentorship and guidance in areas such as corporate

governance, safety, health, environment, legal, accounting and company secretarial aspects. This

incubator-style process allows the investee company to „stand on its own feet‟, with the resultant

effect being sustainable job creation and socio-economic development.

The Anglo Khula Mining Fund

The Anglo Khula Mining Fund is a joint initiative between Anglo American and Khula Enterprise

Finance Limited, a government-owned entity that promotes SME development.

The fund, which focuses on promoting mining-related investments, is managed by Anglo Zimele. It is

based on an effective and replicable business model that aims to boost the South African mainstream

economy and support government‟s initiatives by helping emerging black-owned mining operations

with commercially viable prospects.

The barriers typically faced by aspirant miners include ubiquitous prospecting permits, lack of access

to development capital and the shortage of sound advisors and guidance appropriate to the needs of

emerging mining companies.

The fund assists such mining enterprises with equity and loan finance at prime interest rates,

complemented by technical support during the high-risk exploration and pre-feasibility stages of

projects.

This brings them to commercially bankable positions at which point mining entrepreneurs can

approach commercial lending institutions and raise finance for the commissioning of mining

operations. Financial support extended to investee companies is complemented by hands-on

business support and guidance in areas such as broad-based BEE, corporate governance, safety,


health, environment, legal, accounting and company secretarial aspects. Further to this, it has access

to world-class technical, engineering and mining expertise.

The Communities Fund

Anglo American‟s Communities Fund has made a significant and tangible impact on the communities

near our mines by supporting small and medium enterprises, facilitating entrepreneurial opportunities

and the subsequent creation of jobs.

The fund assists entrepreneurs with seed and working capital through loan finance of up to R1 million

per project at preferential interest rates. Beneficiaries must operate in our business unit areas and

comply with the BEE criteria set by the Mining Charter.

The Communities Fund works hand in glove with the five hubs that Thermal Coal finances. These are

situated in Secunda, eMalahleni, the Vaal, Middelburg and Bushbuckridge. To date, these hubs have

assisted 242 businesses with mentorship and loan finance amounting to R65 million. These

businesses employ 2627 people mostly the women and youth

While the fund assists micro enterprises with seed and working capital, the hubs extend a guiding

hand to entrepreneurs. They offer practical support to emerging business owners and aspiring

entrepreneurs in the form of business plan assistance and management training and coaching. The

hubs also offer telecommunications, internet, printing and meeting facilities while giving entrepreneurs

advice on the day-to-day running of their businesses.

The Olwazini Fund

This fund assists historically disadvantaged individuals – particularly women, the youth and the

disabled – to establish and operate their own small businesses, with entrepreneurial skills training as

a starting point.

It provides small business loans of up to R20,000 per proposal at preferential interest rates to

individuals who successfully complete its training programme.

Entrepreneurs receive credits towards an NQF Level 2 qualification, and develop their own business

plans with the assistance of mentors. Training is delivered in modules over the course of 12 months

and participants are able to submit a business plan as a loan application to the fund within the first

three months.

Mentorship of SMMEs by New Largo Colliery

New Largo Colliery will provide mentorship opportunities for local entrepreneurs through the Ogies Small

Business Hub. Apart from providing business expertise, the hub facilitates loan finance through the

Communities Fund. Services provided by the hub include, but are not limited to the:


Development of business plans

Guidance on corporate governance and good business practice

Technical support

Secretarial and administrative matters

Strategic and financial skills

Market development and expansion

Legal requirements

2.12 Scholarships, bursaries and internships

Thermal Coal is living up to the Mining Charter‟s objective to address the skills gaps in the industry by

working with a number of stakeholders. Activities in this area include:

Regular interaction with statutory bodies such as the MQA on the formulation of skills

development strategies. This includes the conducting of annual skills audits.

Working closely with educational authorities and providing scholarships and bursaries to

promote mining as a career option.

We also provide resources to improve the level of education in maths and science which will

increase the number of learners who will be able to study further in professions related to the

mining industry.

We actively promote mining as an exciting career opportunity by hosting career exhibitions,

school visits and participating in initiatives such as the annual Take a Girl Child to Work Day.

On an internal level, we provide skills training opportunities so that employees can retain their

income-earning capacity after mine closure.

Bursaries and internships

At Thermal Coal, we have a well-established bursary scheme which aims to develop suitable students

who – once they have completed their studies – are afforded professional career opportunities within

our organisation.

We aim to attract bursars in the areas that surround our operations and have launched a number of

drives to improve marks in maths and science among local learners for this reason. In addition, the

scheme is open to the general public as well as the children and relatives of employees. We award

bursaries to those interested in studying the following disciplines:

Geology

Metallurgical and chemical engineering

Electrical and mechanical engineering

Mining engineering


Mine surveying

Industrial engineering

Rock engineering

Environmental management

Finance and accounting

We offer experiential learning to a number of students, which not only affords them an opportunity to

complete the practical component of their studies but provides Thermal Coal with a pipeline of

students who could be offered bursaries and ultimately permanent employment within the company.

The adopted approach is to offer experiential learning to at least 40 learners per annum.

Table 2: Professionals in training for Thermal Coal

Discipline Budget Actual Budget Actual Budget February

2011 Actual

% HDSA as of current month actual 2010 2010 2011 2011 2012

Mining 22 33 24 39 39 90%

Engineering 43 61 30 64 64 77%

Industrial engineering 5 6 6 7 7 63%

Rock engineering 2 2 2 2 2 100%

Geology 6 10 13 16 16 70%

Metallurgy 10 15 7 18 18 78%

Total: Technical 88 127 82 146 0 146

3

Supply chain 3 3 3 2 2 100%

VOHE 3 6 4 6 6 67%

Environmental 4 4 5 4 4 100%

Human resources 4 5 5 4 4 100%

Commerce (finance and payroll) 8 12 11 12 12 100%

Survey 3 2 4 3 3 100%

Safety 5 3 6 3 3 67%

TOTAL: ALL 118 162 120 180 0 34

Table 3: University of technology bursars for Thermal Coal

Discipline

Budget Actual Budget Actual Budget February 2011 Actual

% HDSA as of current month actual

2010 2010 2011 2011 2012

Mining 20 14 16 10 9 100%


Metallurgy 4 2 4 0 0 0%

Engineering 7 2 7 4 4 75%

Geology 2 2 4 2 2 100%

Survey 3 6 2 1 1 100%

Technicians 9 12 9 5 5 80%

TOTAL 45 38 42 22 0 21

Discipline Budget Actual Budget Actual Budget February

2011 Actual

% HDSA as of current month actual 2010 2010 2011 2011 2012

Mining 36 36 31 31 31 84%

Commerce 13 13 14 15 15 93%

Electrical Engineering 20 20 13 13 13 92%

Mechanical Engineering 22 22 18 19 19 84%

Geology 22 22 17 18 18 81%

Rock Engineering 0 0 0 0 0 0%

Metallurgy 18 18 21 21 21 90%

Industrial Engineering 6 6 7 7 7 71%

Mining

TOTAL 137 137 90 124 0 124

Bursar training programmes

Thermal Coal has well-established training and development programmes for all graduates in the

different disciplines. These are reviewed on an annual basis and are updated where necessary.

Programmes allow for continuous monitoring and evaluation to ensure that our trainees get the best

exposure available. The company encourages trainees to take ownership of their development and

has processes in place to allow for further studies where required.

Table 5: Internships and bursaries to be awarded by Thermal Coal (five-year plan)

FIELD OF STUDY 2010 2011 2012 2013 2014

University of Science

Mining engineering 8 8 10 12 15

Mechanical engineering 3 3 4 4 5

Electrical engineering 2 3 5 6 4

Metallurgy 7 5 3 5 5


Geology/rock engineering/survey 6 5 3 7 3

Finance/administration 3 2 4 4 4

Other (Industrial engineering, environmental) 4 2 2 2 3

TOTAL 33 28 31 40 39

University of Technology

Mining 7 5 6 4 6

Engineering 0 4 4 6 4

Metallurgy 3 4 2 3 3

Survey 2 2 2 2 2

TOTAL 12 15 14 15 15

2.13 Employment equity

At Thermal Coal we continue to make strides in the transformation of our workforce and have

achieved, if not exceeded, all the 2009 employment equity targets set by the Mining Charter. By the

end of 2010, our executive committee comprised 33% HDSAs and the number of HDSAs in

management across the organisation stood at 45%. While no longer a charter requirement, women

accounted for 16% of the total labour force and 11% of the entire employee population comprised

women in technical roles. The number of Women in Thermal Coal management stood at 17%. Our

employment equity statistics are given in the table below:


S Table 6: Employment equity statistics for Thermal Coal Head Office (2009)

Occupational Levels

MALE FEMALE TOTAL DISABLED HDSAs

African Coloured Indian White African Coloured Indian White Male Female Male Female HDSA

(%)

Top management 1 0 0 2 0 0 0 0 3 0 0 0 33%

Senior management 7 1 2 30 3 1 0 1 40 5 0 0 33%

Professionally qualified and

experienced specialists and mid

management

2 1 1 5 2 0 2 1 9 5 0 0 64%

Technical and academically

qualified workers, junior

management, supervisors,

foreman and superintendents

3 0 0 1 5 3 4 12 4 24 0 0 96%

Semi-skilled and discretionary

decision-making 0 0 0 0 0 0 0 0 0 0 0 0 0%

Unskilled and defined decision-

making 0 0 0 0 0 0 0 0 0 0 0 0 0%

TOTAL 13 2 3 38 10 4 6 14 56 34 0 0 60%

Non-permanent employees 0 0 0 4 0 0 0 1 4 1 0 0 20%

TOTAL PERMANENT 13 2 3 42 10 4 6 15 60 35 0 0 58%

95


Table 7: Employment equity statistics for Thermal Coal operations (2009)

Occupational Levels

MALE FEMALE TOTAL DISABLED HDSAs

African Coloured Indian White African Coloured Indian White Male Female Male Female HDSA

(%)

Top management 1 0 0 2 0 0 0 0 3 0 0 0 33%

Senior management 25 3 4 104 5 1 0 7 136 13 2 0 30%

Professionally qualified and

experienced specialists and mid

management

149 11 19 306 48 1 6 59 485 114 6 0 49%

Technical and academically

qualified workers, junior

management, supervisors,

foreman and superintendents

1666 28 42 1169 384 9 7 151 2905 551 10 1 66%

Semi-Skilled and Discretionary

decision-making 3594 10 1 50 522 16 4 74 3655 616 15 0 99%

Unskilled and defined decision-

making 461 1 0 12 143 0 0 3 474 146 9 0 98%

TOTAL 5,896 53 66 1,643 1,102 27 17 294 7,658 1,440 42 1 82%

Non-permanent employees 24 0 0 26 27 1 0 12 50 40 1 0 71%

TOTAL PERMANENT 5,920 53 66 1,669 1,129 28 17 306 7,708 1,480 43 1 81%

9,188

Annual Progress Report


New Largo Colliery plans to employ 710 employees when it is in full operation. Recruitment and

appointment will be based on the Thermal Coal Employment Equity Policy. The mine will employ local

people with matric above qualifications.

2.15 Plan to achieve 40% HDSA participation in management

New Largo Colliery will submit a plan on how it will meet the requirements of the Mining Charter within six

months of the commencement of operations, while an Employment Equity Committee will be established.

This will be made up of mine management, recognised trade union representatives and members of HDSA

groups on the mine. Among other duties, this committee will focus on the identification and elimination of

barriers for HDSA participation in the workplace.

Table 10: HDSA participation in management at Thermal Coal

Table 11: HDSA Participation in management - New Largo Colliery

Occupational Level 2009 2010 2011 2012 2013 2014

Top management

To be advised following commencement of operations

Senior management

Professionally qualified and experienced specialists and mid-management

Officials

TOTAL

2010

Occupational Levels SLP Target Actual Variance

Top management 0 1 1

Senior management 56 45 -11

Professionally qualified and experienced specialists and middle-management

224 272 48

Sub Total 280 318

38 41.4% 42%

Officials C# 144 850 706

TOTAL 424 1,168

744 42% 45%


PART THREE Local Economic Development Programme


3. Local Economic Development Programme

At Thermal Coal we are committed to delivering improvements in the social and human capacities of

the people who surround our operations, not only to maintain our social licence to operate, but to

create real opportunities for socio-economic advancement.

3.1 Socio-economic background information

Thermal Coal operates mainly in three municipal districts, namely Nkangala, Gert Sibande and Fezile

Dabi. New Largo Colliery, along with our Mafube, Goedehoop, Kleinkopje, Landau, Greenside and Kriel

collieries, will be situated in the Nkangala district and therefore shares the same socio-economic

background as these operations. Nkangala is one of the three district municipalities forming the

Mpumalanga province. These include Nkangala, Ehlanzeni and Gert Sibande.

The Nkangala District Municipality (NDM) comprises an area of approximately 240km² which includes

the following municipalities:

The eMalahleni Local Municipality

The Steve Tshwete Local Municipality

The Delmas Local Municipality

The Emakhazeni Local Municipality

The Thembisile Hani Local Municipality

The Dr JS Moroka Local Municipality

New Largo Colliery will form part of the eMalahleni Local Municipality.

3.2 Socio-economic profile

The NDM has a total population of about 1,23 million people living in approximately 160 different

towns throughout the region. The breakdown is as follows:

Table 12: Population breakdown of NDM

No Municipality Population

1 Delmas 4%

2 eMalahleni 35%

3 Dr JS Moroka 20%

4 Emakhazeni 3%

5 Steve Tshwete 15%

6 Thembisile Hani 23%

(Source: NDM: IDP 2009/2010)


The average unemployment rate in the NDM is 44%, and this is even higher in areas such as

Thembisile (51%) and Dr JS Moroka (61%). This results in a large portion of the population having to

seek job opportunities outside the district which in turn results in socio-economic problems. These

include parents spending very little time at home, high accident rates, and significant annual subsidy

costs (in excess of R550 million per annum on transport subsidies provided by the district).

The following are the key economic activities in the NDM:

1. Mining

2. Manufacturing

3. Agriculture

4. Electrification/power generation

5. Construction

6. Trade

7. Transport

8. Finance

9. Community services

10. Tourism

The breakdown of employment by area of economic activity in the district is as follows:

15,8% in community and social services;

13,6% in wholesale and retail;

12,9% in mining and quarrying; and

12,7% in private households.

Table 13: Most important industries per local municipality in the NDM

No Municipality Most important industry % of GDP

1 Delmas Agriculture 23

2 eMalahleni Mining and quarrying 23

3 Dr JS Moroka Community and social services 30,3

4 Emakhazeni Agriculture 25,8

5 Steve Tshwete

Mining and quarrying

Wholesale

Community services

14,8

14,1

14,3

6 Thembisile Hani Private households 22,6

(Source: NDM: IDP 2009/2010)

3.3 Local economic development key focus areas

The key local economic development focus areas of the NDM are discussed in this section, and are derived

from the municipality‟s Local Economic Development Plan (2006) and the NDM Integrated Development

Plan for 2009/2010. The goal of local economic development is to transform the Nkangala District into a

hive of economic activity characterised by strong levels of investment, sustainable job creation and


improved income levels in a way that builds on the distinctive potential of each municipality, preserves the

integrity of the environment and avoids negative competition.

Table 14: SWOT analysis of the NDM

Strengths Weaknesses

Maputo corridor transverses the district Low skills levels

Existing steel cluster Deteriorating rural infrastructure

A number of government initiatives in the area Spatial inequalities

Availability of natural resources Underdeveloped sectoral opportunities

Culturally diverse communities Uncoordinated development implementation

Opportunities Threats

Exploiting export opportunities Impact of HIV/AIDS on the community

Development of SMMEs Unemployment (increasing)

Scope for large-scale tourism development Poverty (increasing)

Close location of Gauteng markets Unbalanced (only urban) development

Opportunities for comprehensive steel and chemical

development Dependence on limited large sectors

(Source: NDM: LED Plan 2006)

Table 15: Strategic interventions to facilitate local economic development in the NDM

Pillar Strategic intervention Development programmes and projects

1. Good governance and capacitation

Economic Infrastructure maintenance

Inter-governmental communication and capacitation

Regulatory reform

Institutional framework

2. Human resource and community development

Tertiary institutions

Internal business skills

HIV/AIDS care-giver training

Extended community public works programme

3. Industrial and big business development Business retention and expansion

Marketing

4. SMME development and support

Establishing services

Expansion of existing SMMEs

Linkages with large businesses

Small business support centre

5. Agricultural development

Emerging farmer support

Commercial farming

Agro-processing

6. Tourism development

Product development

Development of „key tourism icons‟

Environmental conservation

7. Rural development

Income augmentation

Rural infrastructure and support centre

Rural tourism and eco-tourism


Priority areas Problem

description Causing factors Resulting problems Problem-solving potential

Powers, duties and functions

Due to capacity and establishment constraints, the NDM has assumed responsibility for several

functions at local municipalities

Capacity constraints

Questions regarding service boundaries

Lack of efficient service delivery

Land administration between local municipalities and traditional leaders remains an issue

Assess division of powers and functions between levels of government

Development of SLAs with departments at provincial and national level

Capacity development

Organisation, restructuring and transformation

Multi-faceted issue which includes a lack of critical skills and efficient ICT

Lack of critical skills in the municipality and key sectors

Lack of ICT infrastructure and systems

Efficient delivery of services

Development of economic activity in the district

Internal capacity-building programme

Development of HIV/AIDS workplace policies and EAPs

Development of forum focusing on HRDS

Spatial restructuring and service provision

Lack of equitable distribution of government services and expanding rural settlements

Rural dispersed settlement pattern

Efficient and equitable service delivery

Inequitable development

Building MPCCs through the NDM to facilitate service delivery

Review of SDF of the NDM

Development of a physical planning strategy

Health The NDM is affected by increases in HIV/AIDS and tuberculosis as well as the spread of cholera

Bad state of sewage treatment plants

Shortage of doctors and other health professionals

Inequitable distribution of health services

Rehabilitation of physical health infrastructure

Full implementation of the district HIV/AIDS strategy

Development of an implementation plan to address the problems of sewage treatment plants

Education Matriculation rates far below the provincial average

Dilapidated schools

Lack of learner transport

Lack of facilities

Increasing social ills, including teenage pregnancy and drug abuse

Ensure alignment between the Department of Education and the NDM

Hosting a district education indaba

Welfare Lack of welfare facilities and services for relevant social groups

Pay-points for social grants in poor state and inaccessible

Social grant fraud

Child-headed households

Many people without birth certificates and identification documents

Mobilisation and capacitation of community-based care facilities

Attention given to empowering previously disadvantaged communities

Culture, sport and recreation

Lack of social facilities and the preservation of cultural or historical sites

Lack of recreational facilities

Lack of development and utilisation of historical sites for tourism

Social disintegration

Lack of recreational activities

Decay of historical sites

Formalisation of cultural or historical sites

Co-ordination of sports, arts and culture programmes with relevant stakeholders

Emergency services

Several LMs cannot run effective emergency services

Lack of skills and relevant infrastructure

Inefficient disaster management

Lack of access to emergency services

Training of personnel

Acquisition of relevant equipment for emergency services

Implementation of Disaster


Table 16: NDM issue analysis (Source: NDM: IDP 2009/2010)

3.4 Impact of mining operations

The New Largo coal reserves straddle the R545 provincial road between the towns of Kendal and

Balmoral in the Mpumalanga province and are bounded by the N4 and N12 highways in the north and

south, respectively. The area is located midway between the towns of eMalahleni, Delmas and

Bronkhorstspruit.

It is estimated that these reserves will be able to supply Eskom‟s new Kusile Power Station with its

requirement of 17 million tonnes of coal per annum for a period of between 40 and 50 years. Open

cast mining is proposed in a number of pits distributed over the coal reserves. Mining methods will

include a combination of dragline and truck and shovel operations.

Management Plan

Water and sanitation

Lack of potable water and management of water and sanitation services in former homeland areas

Lack of potable water

Lack of drinking areas for livestock

Health issues related to the spread of contagious diseases

Lack of development in agricultural sector

Reclamation of mine water

Recycling of sewer effluent

Raw water supply to industries

Electricity supply

Environmental pollution

Provision of free basic electricity accessible to all

Illegal electrical connections

Deforestation in rural areas

Development of the Kusile project and the building of the Komati Power Station

Development of an energy forum

Roads and stormwater

systems

Condition of the roads and public transport system needs urgent attention

Lack of maintenance and monitoring of construction

No proper stormwater systems installed during road construction

Inhibiting economic development and tourism, especially in more rural areas

Access to services via public transport is inhibited

Building capacity in municipalities where roads are not effectively maintained

Land reform and administration

Problems with the sustainability of farming activities as a result of the lack of land and land reform

Slow pace of land reform

Inability to support and empower cooperatives

Inhibiting development of agricultural sector, a main source of employment in rural areas

Development of potential agri-villages

Monitoring land invasions and farm evictions

Economic development and job creation

Unemployment causing poverty

Lack of resources, infrastructure and skills

Lack of jobs

Reliance on mining and agricultural sectors

People are unable to develop their resources and skills

Social disintegration

Implementation of the 2006 LED strategy

Rolling out the EPWP


Coal will be loaded onto trucks using a mechanical shovel, and taken to a tip adjacent to the pit where

it will be crushed and loaded onto a conveyor. The conveyor will transport the coal to a stockyard

adjacent to the power station. Haul and service roads will connect the various pits and tips, while

offices, workshops, change houses and other key infrastructure will be required for staff and the

maintenance of equipment.

The mine is expected to employ around 2000 workers during the construction phase and about 710 at

full operation. All staff will be accommodated in surrounding towns and settlements, and no

accommodation will be provided on the mine.

As a result of mining activities, it will be necessary to reroute the R545 provincial road. This could be

to the west or to the east of the New Largo reserves. The relocation of other infrastructure, including

power lines, telephone lines and pipelines will also be necessary. The majority of the surface area

that will be occupied by open cast pits and mine infrastructure has been purchased from existing

landowners.

Environmental impacts are discussed in the Environmental Management Programme Report which is

in the process of being compiled for New Largo.

3.5 Job creation and enterprise development

New Largo Colliery will employ approximately 710 people from surrounding communities, while also

facilitating the growth and development of the area‟s small enterprise sector through the Anglo

American Zimele small business hub programme.

This programme provides support to entrepreneurs though the provision of finance through its

Communities Fund and a network of walk-in centres or hubs where business owners are given

tangible support in the running of their businesses. Thermal Coal has established six hubs situated in

Ogies, eMalahleni, Middelburg, the Vaal, Secunda and Bushbuckridge.

Support given to entrepreneurs includes the development of business plans, training and coaching on

the essentials of running a business, tax advice, marketing support and access to facilities. These

include fax, internet, printing and meeting amenities.

In achieving the aims of the Communities Fund and its related hubs, the sustainability of businesses

is essential. Therefore the following criteria are used in considering the granting of loans:

Economic viability and sustainability

The business must be able to generate a positive cash flow to service and sustain its debt

The company must comply with the Mining Charter and Broad-Based Black Economic


Empowerment Codes of Good Conduct regarding shareholding and ownership (at least 25%

of the business must be owned by a previously disadvantaged South African)

The owners of the investee company must be involved, on a permanent basis, in the day-to-

day management and operations of the business

The owners of the investee company must contribute to the company from their own

resources to ensure commitment and risk sharing

The investee company must comply with all necessary legal requirements as well as Anglo

American's standards and procedures regarding environmental and safety management.

The fund assists entrepreneurs with seed and working capital through loan finance of up to R1 million

per project which is paid back at preferential interest rates. Beneficiaries must operate in Anglo

American business unit areas.

Since the establishment of the fund in 2008, Thermal Coal‟s five hubs have approved loans to the value of

R65 million. These investments have been made in 242 enterprises and have employed 2627 people.

3.6 Infrastructure development

Infrastructure projects

The following projects appear in the eMalahleni Municipality‟s Integrated Development Plan which includes

the communities of Phola , Ogies and Wilge. This plan was completed with the input of local communities

and the prioritisation of projects has been conducted by the local municipality. Projects are related to

service delivery and have therefore been identified as initiatives in which New Largo Colliery could assist in

achieving the goals of local, provincial and national government. These projects include:

The provision of an access road to Phola

The implementation of a storm water master plan for Phola

The construction of a bulk supply water line in Wildebeesfontein

The provision of sewer reticulation at Wildebeesfontein

The development of a waste disposal site in Phola

Construction of a water reservoir in Wilge

3.8 Corporate social investment initiatives

Thermal Coal‟s community development strategy responds to the needs of communities raised

through the SEAT process and focuses on areas where we believe we will maximise benefit both to

society and our business. We have committed to invest 1.5% of our operating profit in sustainable

community development projects. Over R80 million?? was invested in such projects in 2010.


The Anglo American Chairman’s Fund

The Anglo American Chairman‟s Fund is one of the dedicated instruments through which Anglo

American channels its corporate social investment (CSI) spend. As the oldest professionally managed

CSI programme in the country, the fund dates back to the 1950s and, over the years, has developed

a reputation for being one of the most inclusive funder in the country and a partner of choice in

development. During 2008, the fund invested R76,5 million in local CSI initiatives while in 2009 it

ploughed R71 million into various charitable projects.

These projects range from small grassroots initiatives to major capital building projects and large-

scale service delivery programmes in partnership with provincial and national authorities. Focus areas

include HIV/AIDS, healthcare and welfare as well as education and entrepreneurial development.

Almost half of the fund‟s social investment goes to initiatives that improve the standard of education in

South Africa. These focus on maths and science, literacy, the development of teachers and

infrastructure. Its flagship project is the Rural Schools Programme which provides infrastructure,

mainly in the form of classrooms, laboratories, ablution blocks and libraries for schools in rural areas.

Between 2003 and 2008, the Chairman‟s Fund contributed R54 million to this sector.

The fund also assists organisations that care for the elderly, the disabled and children, and supports

initiatives in the entrepreneurial development and policy sectors. One of its recent projects involves

support for the African Children‟s Community Education and Feeding Scheme which feeds more than

1,000 families a month and 21,000 orphans and vulnerable children each day.

At New Largo, we envisage looking at the following community development priorities:

Table 17: Community development priorities: New Largo Colliery

No Priorities Purpose Beneficiaries

1 Education and training To promote a culture of learning in the community Local community

2 Environmental Education and empowerment Local community

3 Health To uplift the standard of health in the area Local community

4 Agriculture To promote food security and help eradicate poverty Local community

5

Infrastructure development

To uplift the standard of living and assist the municipality with its service delivery commitments

Local municipality

New Largo Colliery‟s Community Engagement Committee will monitor current projects and identify

future initiatives in consultation with other Thermal Coal operations and community stakeholders in

order to promote sustainability, self-reliance, support and participation.


3.9 Youth engagement

The mine will work closely with the local municipality to identify new and existing youth-based projects

that are in need of support. It will also link young people to the company‟s Small Business Hub

initiative which provides the following services:

Business plan development

Company registration

Marketing plans

Accounting and bookkeeping advice

Tax compliance and advisory services

Tender advice

Access to loan finance

Access to fax, internet, printing, scanning, email and meeting amenities

These projects will enable young people to submit tenders for contracts with the mine when such

opportunities become available.

3.11 Local Economic Development projects

Thermal Coal plays an important role in the facilitation of economic development within the district and

local municipality and is well represented in the Local Economic Development (LED) and Integrated

Development Planning (IDP) forums in the municipalities of this area. The projects listed below will be

supported by New Largo Colliery and have been discussed with the IDP forum

The allocation of funding in the various stages of these projects is merely a projection and is subject

to change.


Table 19: Construction of bulk supply water line (Wildebeesfontein)

SKILLSDEVELOPMENT ACADEMY

PROJECT BACKGROUND:

Development of local skills

OBJECTIVES:

Development of technical skills and capacity relevant to mining and power generation

LOCATION:

PHOLA

EMPLOYMENT OPPORTUNITIES:

30

TIMEFRAME (2012 - 2016)

2012 2013 2014 2015 2016 Budget

R5,000,000 R5.000.000 R4.000.000 R3.000.000 R3.000.000 R20,000,000

TOTAL R5,000,00 R5.000.00 R4.000.000 R0 R0 R20 000,000

CONSTRUCTION OF BULK SUPPLY WATER LINE – WILDEBEESFONTEIN

PROJECT BACKGROUND:

Investment to a planned township to accommodate growth

OBJECTIVES:

increase the capacity of the municipality to supply water in the area

LOCATION:

PHOLA

EMPLOYMENT OPPORTUNITIES:

30-40 jobs

RESPONSIBILITY TIMEFRAME (2012 - 2016)

2012 2013 2014 2015 2016 Budget

R R5,000.000 R5,000.000 R10,000,000

TOTAL R0


3.12 Housing and living conditions

Social and Labour Plan guidelines and targets

Thermal Coal must provide a plan to establish the preferred requirements for infrastructure, housing

and living conditions for the new operation, and must determine:

The need for the establishment of a settlement

The type of settlement envisaged

The location of the envisaged settlement

The sustainability of the settlement beyond the life of the mine

3.13 Summary of employees

The table below provides a summary of the envisaged total number of employees for New Largo. The

employee type is defined as follows:

Officials mean employees from artisan and foreman level to senior management. These are

employees in the E, D and C upper Paterson bands.

Senior-skilled employees refer to employees in the Paterson C lower and B bands and would

include skilled operators, office administrators, etc.

Skilled employees are employees mainly in the grade 4 to 8 category and are primarily general

workers who carry out basic skilled tasks at the operations, from material handling to office

cleaning.

Other types of employees refer to trainees and graduates

3.14 Thermal Coal housing strategy

Our vision for housing is long-term home ownership. As a result, we wish to move away from housing

provision entirely and to ensure that employees are accommodated in their own formal accommodation

located within the metropolitan frameworks of the regions where our new and existing operations are based.

The primary aims of this vision are:

To meet the new requirements outlined in the revised Mining Charter for 2014.

To support the integration of future corporate social investment activities within the regional

municipal framework and infrastructure development.

Labour category: Number of employees

Mine manager and E band 8

D band 42

B band, C4 and senior-skilled 263

Skilled 397

TOTAL 710


To assist the Chamber of Mines to meet the Housing Forum commitments and to ensure that

the Social and Labour Plan and Mining Charter‟s obligations are met and are sustainable.

To enhance the social and economic sustainability of the regions in which Thermal Coal

operates through a housing model that is integrated within the greater metropolitan centres and

aligned with the Integrated Development Plans for those regions.

Key challenges:

Lack of affordable housing which encourages employees to remain in mine-provided

accommodation in unsustainable areas.

Bulk infrastructure costs and constraints which have delayed the delivery of serviced stands for

residential developments in sustainable areas and which have added to the cost of housing

and selling prices.

Chronic housing backlogs. This has resulted in long waiting lists and delivery lead times.

Limited municipal resources, particularly funding and capacity, to provide infrastructure and

services for residential developments.

3.15 Housing action plan

During 2007, Thermal Coal initiated a project to manage the transition from housing provision at its

operations to full home ownership. This plan is based on the following pillars:

The adjustment of housing allowances in line with market conditions to encourage employees

to relocate to sustainable residential settlements in established areas.

To support bulk infrastructure development within the local municipal spatial framework with

funding and technical expertise to fast-track the delivery of housing and contain house prices

within acceptable levels.

To specifically source and support housing delivery within metropolitan urban areas that will be

sustainable in the longer term.

To facilitate and market home ownership to all employees.

Table 21: Thermal Coal housing allowances per employee grade

Employee grade 2007 RATES 2009 RATES 2010 RATES

D1 and C4# R 5,250 R5,775 R6,208

CU R 4,500 R4,950 R5,321

CL and B Band R 3,600 R4,000 R4,320

Senior-skilled R 3,600 R4,000 R4,320

Skilled R 2,636 R3,000 R3,300


Bulk infrastructure for residential development

The demand for houses by New Largo employees is estimated to be around 280. A project has not yet

been identified to accommodate this demand. However, anticipated investment costs for infrastructure

development amounts R17.5 million.

Sourcing and supporting housing delivery

The development project will be specifically targeted to supply houses to employees who will work on New

Largo Colliery. This is because of the proximity and location of the mine in relation to this development. The

development will be in line with the company strategy of sourcing from sustainable areas. The company

housing team is actively involved in discussions with local municipalities, technical design personnel, urban

planners and private property developers. This is an ongoing process.

Facilitation and marketing to company employees

Thermal Coal has initiated a training and development scheme for all employees interested in buying or

renting property in urban areas. This training program is designed to educate employees on the

responsibilities of buying, owning and managing their own homes. This is an ongoing process and is run in

parallel with the marketing programmes under way for the all developments envisaged or in progress.

Summary

Thermal Coal has identified a number of options which will be explored to ensure that the

accommodation requirements and standards set in terms of company policy, collective agreements,

the Mining Charter and other applicable legislation are met.

New Largo Colliery will provide employees with a living out allowance and assist employees to

purchase their own accommodation by collaborating and influencing with developers in the area.

Employees residing further than three kilometres from mine property will also be provided with a

monthly commuting allowance.

3.16 Measures to address nutrition

In accordance with Thermal Coal policy negotiated with employee representatives, New Largo

Colliery will not provide food to employees, but will instead provide an accommodation allowance.

In addition, New Largo Colliery will provide the following:

Educational programmes (induction, monthly communication report, and peer education) to all

employees on basic hygiene and nutrition.

Free supplements to all chronically ill employees on a monthly basis.


PART FOUR

Management of downscaling and retrenchments


4. Management of downscaling and retrenchments

The primary objective of downscaling and retrenchment management is to ensure that there are no

other viable options to achieve operational requirements before considering the downscaling of

workers. To achieve this, the following have been put in place:

4.1 Establishment of a future forum

New Largo Colliery will establish a forum consisting of management and employee representatives.

This forum will be trained on the content of the Minerals and Petroleum Resources Development Act.

It will be established within the first six months of the mine operating. The purpose of the forum will

be to:

Identify challenges affecting the mine and solutions for these; and

To implement solutions agreed upon by both employer and worker representatives.

4.2 Mechanisms to avoid job losses and a decline in employment

Should prevailing economic conditions cause the profit to revenue ratio of any operation to be less

than an average of six percent for a continuous period of 12 months, Thermal Coal and New Largo

Colliery would initiate the following processes which must include, but not be limited to, the following:

Consultation with all relevant stakeholders

The implementation of section 189 of the Labour Relations Act, 1995

Notifying the Minerals and Mining Development Board

Compliance with the Ministerial directive and confirmation of how corrective measures

would need to be taken

4.3 Managing retrenchments

Should New Largo‟s operations be downscaled or cease with the possible effect of job losses, the

following process would be implemented:

Consultation with all stakeholders

The mine would follow the Labour Relations Act as well as the guidelines provided by the

Department of Labour to ensure fair opportunities to train, redeploy employees and establish

alternative measures short of retrenchment

Our communication strategy would include:

Informing employees of possible retrenchments;

Informing other interested and affected parties, including sending areas and local

municipalities, of possible retrenchments at the operation; and

Informing outside parties of possible retrenchments.


4.4 Mechanisms to ameliorate social and economic impact

Where retrenchments or closure of the operation is imminent, the mine would put in place the

following process to ameliorate the social and economic impact on individuals, regions and

economies:

Assessment and counselling services for affected employees

Comprehensive self-employment training programmes

Comprehensive training (non-mining skills) and re-employment programmes

Creation of jobs for local economies

Regeneration of local economies

Accessing the Social Plan Fund


PART FIVE

Financial provision


5.1 Human resources programme

Table 23: New Largo Colliery provision for Human Resource Development

Programme 2013 2014 2015 2016 2017 TOTAL

Skills

Development

Levies Act

R563,445 R591,616 R621,197 R652,257 R684,870 R3,113,385

Learnerships R308,700 R324,135 R340,341 R357,358 R375,226 R1,705,760

Internal Training

Programme R55,125 R57,881 R60,775 R63,814 R67,005 R304,600

External

Training

Programme

R336,262 R353,075 R370,729 R399,265 419,228 R1,878,559

TOTAL R1,263,532 R1,326,707 R1,393,042 R1,472,694 R1,546,329 R7,002,304

* Budget provision escalates by 5% on an annual basis

5.2 Local economic development

Table 24: Financial provision allocated to Local Economic Development for New Largo Colliery

Project 2013 2014 2015 2016 2017 TOTAL

Skills development Centre

R5 000.000 R 5 000.000 R4 000.000 R3 000.000 R3 000.000 R20,000,000

Construction of bulk supply water line in Wildebeesfontein

R5,000,000 R5,000.000 R10,000,000

TOTAL R5,000,000 R10 000,000 R9 000,000 R3 000.000 R3 000.000 R30 000,000


5.3 Managing downscaling and retrenchments

Table 25: Financial provision for management of downscaling and retrenchments

No. Process Remarks

1 Consultation with stakeholders

Financial provision will be made available

for all the processes involved in managing

downscaling and retrenchments

2 Informing employees of possible retrenchments

3 Informing other affected parties

4 Informing outside parties

5 Assessment and counselling services for affected employees

6 Self-employment training programmes

7 Life skills training programmes

8 Regeneration of local economies

9 Other


PART SIX

Undertaking


6. Undertaking

I, HENRI ROUX NIEUWOUDT the undersigned and duly authorised thereto by ANGLO COAL, A

DIVISION OF ANGLO OPERATIONS LIMITED undertake to adhere to the information,

requirements, commitments and conditions as set out in the social and labour plan.

Signed at JOHANNESBURG on the 11th

day of APRIL 2011

Signature of person responsible ___________________________________________________

Designation HEAD: MINING AND PROPERY LAW

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