SOUTh AFrICAIssue no. 11July 2012

the

MAGAZIne

at the forefront of south african business improvement

SIZWE MDIKANE New Vaal colliery

JULY 2012 | 01

welcome

Godfrey GomweeXeCUTIVe dIreCTorAnGlo AmerICAn SoUTh AfrICA lTd

The inaugural Mining Lekgotla, hosted at Gallagher Estate in Midrand in June, saw more than 700 leaders from the mining sector, labour and government come together in an

attempt to find solutions to the challenges currently facing our industry.Anglo American is a founding member of this event, and I believe it is the first step in the

right direction if we are to ensure the growth and sustainability of the sector. The Lekgotla has also highlighted the need for further and more in-depth meetings of a similar nature.

The value and importance of working in partnership and collaborating with key stakeholders cannot be underestimated, and the relationships that were established during this event will go a long way towards ensuring that we make this growth and sustainability happen.

I draw great encouragement from the achievements being reported in the industry, in particular the progress that is outlined in the latest report on the transformation of Anglo American’s business in South Africa.

A transformed business is indeed a more competitive one, and our 2011 Transformation Report offers examples of how commitment to change at all levels of operation can yield very tangible benefits.

The report touches on several issues and case studies that have been reported in A Magazine over the past few years. Most recently, this includes our groundbreaking R3.5 billion Lefa La Rona community trust scheme in Anglo American Platinum Limited – a scheme that will benefit both the communities around four of our operations and communities in key labour-sending areas, in an enduring partnership. Another example is that of our employee share ownership schemes, of which all our South African employees are now members.

In this edition of A Magazine you will find evidence of these and other transformation efforts. Also look out for the special insert called Our Difference, in which you will find some of the success stories that are emerging from structures such as Anglo American’s Chairman’s Fund, and Zimele, our enterprise development arm.

In the broader business context, transformation also refers to changing the way we think and operate. Working more innovatively is key to unlocking much of the value in our Group, and nowhere is this more evident than in our Asset Optimisation programme.

On page 23, you can read about product development changes at Kumba Iron Ore that have already added some $352 million in net present value to the Sishen base case. Another example is that of Thermal Coal’s Kleinkopje colliery (page 16), where an inventive human resources initiative has led to a 67% sustainable improvement in labour availability.

We also look at examples further afield, such as Drayton mine in New South Wales, Australia (page 18). Here, our Metallurgical Coal business has turned one of its most geologically challenging operations into a best practice case study in excavator use.

These and the other case studies in this edition are evidence of how, sometimes, relatively small changes in thinking and approach can lead to substantial and rapid changes to the bottom line.

It is this kind of innovation, coupled to a commitment to doing what we know is right, that will help to transform our industry into a more competitive, empowered and equitable one.

making more of our business

and our people

SIZWE MDIKANE New Vaal colliery

02 | JULY 2012

In thIs Issue

The A Magazine is a quarterly publication of Anglo American in

South Africa. For an electronic copy, please visit

www.angloamerican.co.za

Editorial enquiries: Rochelle de Paiva, tel +27 (0)11 638 2725

e-mail: rochelle.depaiva@angloamerican.com

The opinions expressed by contributors do not necessarily represent the views of Anglo American. Provided that permission is obtained from the editor and on condition that acknowledgment is made to the A Magazine, articles in this magazine can be reproduced in whole or in part.

NOTE: Please note that any rand/dollar conversions contained in this edition are based on the exchange rate on the day of going to print. All dollar amounts are US$.

04 facts, stats aND News iN a Nutshell

Awards and accolades; big ideas for small business – meet the

winners of the JCI Best Business Plan Competition; Platinum

appoints Lefa La Rona trustees; entrepreneur ‘bootcamp’ gets the

thumbs-up; safety workshops offer healthy advice; new moneyman

for Kumba Iron Ore; 2011 Transformation Report launched;

meeting of minds at the 2012 Mining Lekgotla.

14 Real MiNiNG

How asset optimisation is putting the Group at the forefront of

South African business improvement; the Asset Optimisation

Conference; ‘bums on seats’ at Kleinkopje colliery; Drayton mine

is ‘digging it’; Platinum tackles the sustainability challenge; how

Kumba Iron Ore stands out in a crowd; Thermal Coal’s Project

Khulisa game plan; Sishen develops skills for the future.

32 Real PeOPle

Zibulo comes on stream; Thabazimbi takes efficiency to new

heights; wellness clinic launched; electrifying community

development at Isibonelo; Thermal Coal gets to grips with dust,

noise and combustion control; MQA accreditation for Platinum;

first hydrogen fuel cell locomotive launched.

38 Real DiffeReNce

Kriel, Goedehoop and Vryheid Coronation fly the community flag

high; upping the environmental ante at Mafube, New Vaal and

Zibulo; tackling HIV/AIDS in the Eastern Cape; Fundi empowers

the unemployed.

A dragline at work at Zibulo colliery opencast operations. The mine has a life of some 15 years to provide both thermal and export coal. See article on page 32.

iPAD winner!

Congratulations to Ben Khanyi, security officer at Checkport South Africa, who

won the iPad2 in our reader survey in the last edition of A Magazine. well done Ben, your iPad

is on its way to you.

Thank you to all readers who responded to the survey – please keep an eye on future

editions as we implement some of the changes and article ideas that have

been suggested.– The editorial team

JULY 2012 | 03

anglo american is taking business improvement to a whole new level, having already surpassed its target

of delivering $1 billion in sustainable benefits through its group-wide

asset optimisation programme. This edition of a magazine finds out how.

Could we say iT beTTer?This awards season is proving to be a successful one for Anglo American in South Africa, with our communications teams once again being rewarded for their hard work during 2011. Accolades include one global and three local Gold Quill awards from the International Association of Business Communicators (IABC), and one Public Relations Institute of South Africa (PRISA) PRISM gold award.

The Gold Quill entries included the event management, communications and media engagement around the Local Procurement and Enterprise Development Trade Fair; the overall media engagement around Anglo American’s corporate social investment initiatives; and Kumba’s Kolomela Project internal communications campaign to improve safety. All three qualified as international Gold Quill finalists, while the Trade Fair entry won an Award of Excellence.

The Gold Quill awards have been running for over 40 years, and seek to rigorously test and reward the work conducted by business communicators worldwide. The PRISA PRISM awards recognise and celebrate excellence in public relations and event management. Platinum’s 2011 PlatAfrica Jewellery Design Awards took top honours at this year’s event, winning gold in the event management category. PLatinUm aPPoints

Lefa La Rona tRUsteesProject Alchemy – Lefa La Rona Trust is a R3.5 billion transaction that aims to ensure the long-term sustainable development of four host communities and key labour-sending areas that currently do not benefit from Platinum’s BEE programmes. Alchemy, which seeks to change the destiny of mining communities by giving them a legacy for the future, is making critical strides. It registered its first significant milestone with the finalisation of the Lefa La Rona Trust towards the end of 2011. The teams responsible are working hard to interface with mining communities and other role players, to ensure the necessary collaboration and that community needs are clearly understood. The trustees are: Bongani Nqwababa (financial director of Platinum), Mary-Jane Morifi (executive head of corporate affairs), Edmarie Pretorius (trustee), Moipone Magomola (chairperson) and Nozipho Bardill (trustee).

supporTing businesses

wiTh a planThree bright-minded entrepreneurs will make their mark on the world when

they launch the businesses that won them top honours at the 2012 JCI Best Business Plan Competition. Supported by Zimele, Anglo American’s enterprise development arm, the competition runs in partnership with the International Chamber of Commerce and invites people between 18 and 40 years to submit compelling business plans that address challenges in their communities.

The finalists receive more than just the cash prize of R60,000 – they are also given business resources, training, mentorship and networking opportunities. This year, the University of Johannesburg's social enterprise campus provided incubator services, and the National Youth Development Agency provided match funding. The winners were:l Paseka Lesolang – with a toilet cistern that has the potential to save at

least 288 billion litres of water annually.l Zandile Mabizela of MAG+ – which aims to sell back copies of reputable

rich-content magazines to students at an affordable flat price.l Simphiwe Motsene of Zondi Buy Back Centre – which has a mini

plastic recycling plant and hopes to create employment for 30 people and over 500 beneficiaries (suppliers of recyclable material).

R623 mfunding provided by

Zimele since 2008

1,116Companies supported

21,761People

employed

04 | JULY 2012

Ann Farndell, internal communications manager in South Africa and Pranill Ramchander, head of corporate communications in South Africa, with the coveted IABC Gold Quill Award of Excellence, supported by Anik Michaud, Group head of corporate communications and branding.

JULY 2012 | 05

FActs, stAts & news In A nutshell

“The workshop was particularly useful in assisting my business development,” says participant

Mampho Selokoma, who runs a personal protective equipment business called Bustque 244 (Pty) Limited. “For example, I discovered that I was focusing 90% of my business on distribution and 10% on manufacturing, when it should have been the other way around.”

Anglo American social performance specialist for government and social affairs, Geralda Wildschutt, adds that this feedback highlights the importance of continued and transparent dialogue and development interventions with suppliers and potential service providers.

This is the first time that Anglo American has partnered with Endeavor, a global organisation that

identifies and supports innovative, high-growth entrepreneurs in emerging markets. Based on the success of the training, the Group is considering running additional training sessions during 2012.

business ‘booTCamp’ geTs a big Thumbs up!

Hannah Schultz, social performance coordinator, and Geralda Wildschutt, social performance specialist, facilitated a focus group discussion with small and medium enterprise suppliers, beneficiaries of the Endeavor boot camp sponsored by Anglo American.

this is the word from the 18 entrepreneurs who participated in a four-day

‘bootcamp’ hosted by anglo american and non-profit organisation, endeavor.

the training covered topics such as marketing, finance and sme governance and

regulation, and proved popular in teaching participants how to think differently

about their business processes.

“Building the capacity and capability of our localised suppliers and those based in host communities close to our operations is a crucial element of Anglo American’s local procurement strategy.”LinDA weDDerBurn, Anglo American’s global sustainable responsible supply chain lead

06 | JULY 2012

01, 02 & 03 Delegates at the hazard identification workshop in May, hosted by the Tripartite Health and Safety Initiative.

04 Extracts from the workshop pocket guide.

05 Frikkie Kotzee, new chief financial officer at Kumba Iron Ore.

06 The 2011 Transformation Report on Anglo American’s business in South Africa.

iT’s noT whaT iT seems …

or is iT?Ever looked at a drawing, only to see an entirely different image at second glance? This was the message hammered home at a recent Tripartite Health and Safety Initiative workshop, where stakeholders were shown a series of optical illusions to demonstrate that things are not always as they first appear. The workshop linked this to the principles of hazard identification and the importance of involving colleagues and examining a situation thoroughly in order to indentify and manage risk more effectively.

“Hazard identification is a basic tool of operational safety risk management,” explains Butch Dudgeon, manager for safety leadership and engagement in the Safety and Sustainable Development unit. “By improving our hazard identification skills we can enhance the effectiveness of existing programmes such as the Safety and Health Risk Management Process, Stop, Look, Assess and Manage (SLAM) and Visible Felt Leadership.”

About 160 stakeholders attended the first workshop in May, including health and safety stewards and representatives, safety coordinator officers and managers, risk champions from across all three business units and representatives from the Tripartite Initiative.

Additional workshops focusing on dust and noise, as well as transport safety, have been scheduled throughout the year.

toP safetY tiPAs far as possible, work in a team. Remember, as individuals we will never find all of the hazards, but when we work in pairs or small teams, we are able to observe the situation more thoroughly.

STOP

LOOK

ASSESS

MANAGE

Light VehiclesInteraction with heavy vehicles

Surface Mobile EquipmentReversing

Hazardous MaterialsChemicals

Molten MaterialsWater/metal contact

Equipment SafeguardingDamaged guarding

IsolationStored energy & poor lock-out

Working at HeightsNo harnessHarness not attached

Lifting OperationsIncorrect equipment

Underground Ground ControlWorking under unsupported ground

Underground EquipmentPoor visibility and noise

Important Note:

• If people are in immediate danger of being

injured, stop the activity and make it safe.

• Discuss the unsafe practice and the correct way

of performing the task.

• Then and only then, continue with the hazard

identifi cation exercise.

1. BEHAVIOURS: What are people doing? 2. CONDITIONS: Is there something that can hurt you? 3. INTERACTIONS: Between people and/or machines?

Some hazards you can look out for:

LOOKLEFTTORIGHT,LOOKTOPTOBOTTOM Lookabove,belowandbehindyou,covering theforegroundandthebackground.

Istheresomethingthatcanhurtyou oranotherperson?

REMEMBERTOWORKINTEAMSOF2OR3PEOPLE

01 02 03

04

JULY 2012 | 07

FActs, stAts & news In A nutshell

“We have long recognised the business case for implementing

transformation in its broadest sense because it is the right thing to do,

and I believe this report captures the spirit of that commitment to change

and growth.”GoDfrey GoMwe, executive director of

Anglo American South Africa Ltd

“Kumba has high-quality resources, a strong link to China and its growth opportunities, and significant expansion opportunities. These are substantive tools with which to work ... I hope that I can contribute to ensuring that we continue to manage the company in a fiscally sound and socially responsible manner.”friKKie KoTzee, chief financial officer at Kumba iron ore

new moneymanfor kumba iron ore

As of 1 June, Frikkie Kotzee has taken over the role of chief

financial officer at Anglo American’s Iron Ore business, Kumba Iron Ore Limited. He replaces Vincent Uren, who resigned at the end of 2011.

Frikkie has worked for Platinum as head of business development and for Anglo American as general manager of corporate finance.

“We are delighted that Frikkie is joining Kumba,” says Chris Griffith, chief executive of Kumba Iron Ore. “His extensive knowledge and experience make him an ideal fit. With a track record of working across a broad range of sectors, he is a welcome addition to the team.”

What it takes to emPoWeR PeoPLe, CommUnities and bUsinessSome 46% of Anglo American’s local procurement spend in 2011 was with historically disadvantaged South Africans, and more than R509 million was spent by the Group’s South African business on various mine community development initiatives in the same year.

These are just two of the statistics to emerge from the 2011 Transformation Report on Anglo American’s business in South Africa, which was launched at the Mining Lekgotla in June.

The report covers all the locally operating business units and showcases the progress made during 2011 towards achieving meaningful transformation as measured against the pillars of the Mining Charter.

For copies of the report, please contact Lindiwe Zikhali, head of transformation and regulatory affairs, on lindiwe.zikhali@angloamerican.com.

05

06

08 | JULY 2012

a meeTingof mindsCommitment to south africa and the mining industry spurred anglo american’s participation in the recent 2012 mining Lekgotla.

01

JULY 2012 | 09

FActs, stAts & news In A nutshell

‘Lekgotla’ is a Sesotho word that means meeting, and this is exactly what the Mining Lekgotla 2012 was

all about. The first annual two-day Mining Lekgotla held in Midrand on 5 and 6 June provided more than 700 leaders of the mining industry, labour and government with the opportunity to address risks, competitiveness, social pressures and growth opportunities, and to shape a new model for the industry through collaboration and partnership.

The Chamber of Mines South Africa, in partnership with the National Union of Mineworkers and the Ministry of Mineral Resources, created this scenario-based platform to initiate strategic conversation among key stakeholders to ensure that South Africa remains a preferred mining destination, and to identify the best way to tackle the challenges facing the industry in what is currently perceived to be a somewhat stagnant phase. Another objective of the Lekgotla was to align with the Mining Industry Growth Development and Employment Task Team (MIGDETT) established in December 2008, the critical outcomes of which include managing the negative impacts of the global economic crisis and positioning the industry for growth and transformation in the medium to long term.

Partner of choice As a partner of choice in the mining industry and one of the Lekgotla’s12 founding members, Anglo American played a significant role in the event. Our involvement helped to entrench Anglo American as an iconic mining brand and provided us with a strategic platform to showcase our contribution to South Africa and the mining industry. It is believed that our sponsorship investment in the summit generated multiple benefits for the Group and its South African businesses. Through our significant participation and involvement in the conference, we were able to take advantage of many opportunities to show off our new brand and convey the messages of who we are, what we stand for and how we do business.

Our executives based in South Africa had the opportunity to participate actively in the conference programme through the chairing of selected conference sessions, as well as participation in certain panel discussions. Issues and themes discussed in these sessions included, among others, options for acid mine drainage, carbon taxes, safety challenges, infrastructure constraints, climate change and energy security, improving the regulatory framework, innovation, sustainable development, women in mining, and beneficiation opportunities.

01 & 02 Attendees at the 2012 Mining Lekgotla heard input from a range of industry leaders and experts, including Cynthia Carroll (above).

“At Anglo American we have a profound belief that it is both our responsibility and our privilege to partner with the people of South Africa. There can be no higher cause than to make a real difference to a country so important to our business and so close to our hearts.” CynThiA CArroLL, Anglo American chief executive

02

10 | JULY 2012

Godfrey sums up Godfrey Gomwe, executive director of Anglo American South Africa Ltd, wrapped up the two-day conference. “This is a significant occasion in the life of our mining industry. We firmly believe that meaningful partnerships between all stakeholders will ensure that we have a sustainable mining industry for the future,” he said.

He reflected on the fact that mining is an important contributor to African economies, with 40% of global mineral wealth residing in Africa, yet questioned why – despite this endowment – the South African mining industry is not growing. He highlighted the recurring

themes of partnership, collaboration and putting South Africa first, which had arisen during the conference.

For Godfrey, the Lekgotla highlighted the need for further and more in-depth meetings of perhaps a similar nature but on a smaller scale. He said: “Mining Lekgotla 2012 is a first step in the right direction if we are to ensure the growth and sustainability of our industry. The value and importance of working in partnership and collaborating with key stakeholders cannot be underestimated, and the relationships that were established during this event will go a long way to ensuring that we can make this happen.”

Feedback from stakeholders has indicated that a positive outcome of the Lekgotla was that certain state agencies such as Eskom and Transnet have undertaken to alleviate their infrastructure and capacity constraints on the industry. “I am convinced that over the next year or two, South African mining is destined to regain its competitiveness,” said Mineral Resources’ acting director general Joel Raphela.

“This is a significant occasion in the life of our mining industry. We firmly believe that meaningful partnerships between all stakeholders will ensure that we have a sustainable mining industry for the future.”GoDfrey GoMwe, executive director of Anglo American South Africa Ltd

01 Godfrey Gomwe, executive director of Anglo American South Africa Ltd.

02 Godfrey Gomwe with Chris Griffith, chief executive of Kumba Iron Ore, and Neville Nicolau, chief executive of Platinum.

03 & 04 Delegates at the 2012 Mining Lekgotla.

01 0403

02

JULY 2012 | 11

FActs, stAts & news In A nutshell

Leading the wayAnglo American was given the opportunity to show that we are a leading global mining company through our chief executive’s keynote address, entitled the ‘Path to prosperity’, at the gala dinner. Cynthia Carroll said that mining has been the engine room of the South African economy and, with resources estimated at $2.5 trillion, future opportunities are enormous.

“We are at a pivotal moment in the history of the South African mining industry,” said Cynthia. Following the publication of the State Intervention in the Minerals Sector (SIMS) study and on the eve of the African National Congress (ANC) Policy Conference, Cynthia added there was no better time for partners in the industry to get together in consultation about the future.

She warned delegates that the policy choices South Africa has to make in the near future will have a profound impact on the future of the mining industry. She reiterated her opposition to nationalisation and

commented that as a regulatory framework is already in place there is no need to create something new with the additional burdens of the ANC’s SIMS proposals. She also added that for the industry to develop to its full potential, adequate infrastructure requirements have to be met.

Cynthia said that she would be asking chief executives of other major mining companies in South Africa to join her in discussing the path forward and to making a Pledge for South Africa based on 10 key commitments, the first of which is safety and a drive to achieve zero harm in the mining industry.

She concluded: “At Anglo American we have a profound belief that it is both our responsibility and our privilege to partner with the people of South Africa. There can be no higher cause than to make a real difference to a country so important to our business and so close to our hearts.”

fAST fACTS

• South Africa’s mining industry creates about a million direct and indirect jobs.

• It accounts for 18% of gross domestic product.

• 92% of the value of local mining expenditure is effectively captured in South Africa.

• More than 30% of our liquid fuels are produced locally.

• Mining is a critical earner of foreign exchange (more than 50%).

• Mining accounts for R78 billion in wages and salaries.

• 94% of South Africa’s electricity is generated via coal-powered plants.

• Mining attracts significant foreign savings (R1.9 trillion/ 43% of value of JSE at end of 2010).

1 mthe number of direct

and indirect jobs created by mining

in south africa.

Efficiency in any industry is key in driving revenue, achieving operational excellence and delivering a

product or service at the right time, quality and price. Winning organisations are constantly trying to improve and evolve their end-to-end processes to achieve this. In the mining sector specifically, business improvement initiatives are being implemented to optimise technical and operational processes in order to impact the bottom line.

The biggest challenge, however, does not lie in our assets, says Pat Lowery, Anglo American’s Group head of asset optimisation.

“Rather, it lies in convincing the people who have put energy and enthusiasm into their work that there is still margin for improvement. If we are to optimise our assets, we need to be in a constant state of restlessness that results in ideas and possibilities for improving the status quo. Today’s optimisation becomes tomorrow’s status quo. This attitude requires determination, resilience and perseverance.”

Delivering the next level in business improvement was the theme of Anglo American’s second annual Asset Optimisation Conference, held in Chile earlier this

year, and it focused on encouraging the collaboration needed for Anglo American to reach new heights in asset optimisation during 2012 and beyond.

“By working together, sharing our learnings, ideas and best practice, we will optimise our assets better and faster,” says Pat.

“Our asset optimisation journey to date has had key focal areas: the early part saw us defining, implementing and refining our processes. As our understanding and maturity improves we continue to focus on embedding and consolidating our processes and driving programmes for new value growth.”

Pat adds that several themes are driving a shift in areas of focus for the next phase of the journey: l Building operational excellence by improving Group

integration and creating a unified Group-wide framework that highlights key priorities in line with Anglo American’s strategy. This framework, aptly called the Operational Excellence Framework, will provide the platform for the business to springboard its Resource to Market (R2M) and benchmarking work streams.

aT The forefronT of

souTh afriCan busi ness improvemenTsince 2009, anglo american has been on a journey to improve the performance of our assets to match or exceed external benchmarks. today, the Group’s asset optimisation team has surpassed its target of delivering $1 billion in sustainable benefits from core businesses, and the portfolio of projects continues to develop and deliver.

“One of the biggest challenges facing our industry is that of delivering sustainable business value. Asset optimisation is a vital key to unlocking this value.”John MACKenzie, Ceo of the Group’s Copper business, host of the 2012 Asset optimisation Conference in Chile

12 | JULY 2012

Kumba Iron Ore’s Sishen mine, where a niche-product strategy is boosting both yield and net present value. See the full story on page 23.

JULY 2012 | 13

l Optimising improvement activities across the mining value chain from the resource stage through mining, beneficiation and ultimately to market.

l Working closely with the Information Management division on the Operational Information Delivery project, to meet the need for quality operational data.

l Embedding asset optimisation knowledge and principles within the business through advanced skills development and focused internal communications.

“Four years ago we started on the journey to optimise the value of our resources, equipment and people,” says Cynthia Carroll, Anglo American chief executive.

“Close collaboration with the business units has helped us to share best practice, technical innovation and operational know-how across the Group and create real sustainable value. We’ve come a long way and achieved a great deal.”

By the end of 2011, Anglo American had comfortably exceeded its target of delivering $1 billion in sustainable benefits. Cynthia points out, however, that this programme is about much more than delivering financial value to the bottom line.

“It is about changing our culture, mindset and approach to one of continuous improvement so that we are always striving to do more. We are one company with a clear ambition to become the leading global mining company. asset optimisation has a vital role to play in achieving that ambition. As the next stage of the journey begins, I know that by working together we can take this to a new level at Anglo American.”

Brian Beamish, Group director of mining and technology (M&T) at Anglo American, describes the work that has been done in this field as “one of the most exciting initiatives within the company and a tangible example of how working together effectively can deliver exceptional value to the business overall”.

“Asset optimisation in general and the operation reviews in particular have provided a vehicle for the technical and operational expertise within M&T to engage with the business units, with the goal of adding value across the Group,” he says. “The teams have been able to do this by identifying and spreading best practice, providing advice and assistance and identifying opportunities to enhance operational performance.

“Much of this learning has already been built into the Group Technical Standards, providing terms of reference for best practice and at the same time playing a vital role in the area of risk mitigation and management.

“The opportunities identified in the operation and project reviews and the resultant projects are testimony to the success of the processes that we have introduced. These are achievements of which all those involved can be proud.

“Over the last couple of years, the momentum has built to the point that the processes are now embedded in the way we think and work, and I have no doubt that asset optimisation will continue to evolve, deliver huge value and be seen as a competitive advantage for Anglo American.”

aT The forefronT of

souTh afriCan busi ness improvemenT

“Operational excellence is one of the cornerstones to achieving the Group’s ambition of becoming the leading global mining company, and it is particularly rewarding that the experienced team within M&T are able to play such a vital role in this journey.”BriAn BeAMiSh, Group director of mining and technology

14 | JULY 2012

Anglo American’s second Asset Optimisation Conference, themed ‘Delivering the next level

in business improvement’, was an opportunity for the Group Asset Optimisation community, colleagues in Mining and Technology (M&T) and counterparts in operations throughout the organisation, to meet and share their experiences of business improvement challenges and opportunities.

The aim of the conference was to offer an engaging experience while driving knowledge sharing and dialogue around asset optimisation. This was conducted through site visits, structured networking sessions, panel discussions, group work, parallel breakout sessions and an exhibition.

In an opening address via video link, chief executive Cynthia Carroll described one of the key strategic objectives of the conference as being to expand the business improvement agenda beyond the asset optimisation community, and she highlighted the vital role that the Group Asset Optimisation team plays in achieving that ambition.

“As the next stage of our journey begins I know that by working together we can take asset optimisation to

a new level at Anglo American,” she said.Since its launch in 2009, the Asset Optimisation

programme has seen the successful implementation of many high-value business improvement projects that have fundamentally changed the way that Anglo American’s teams work, think and manage, yielding a wealth of not only savings, but also skills and experience. Communicating this throughout the Group was the next logical step in ensuring that other business units and operations can share in these benefits.

“The knowledge that was shared at this conference will accelerate participation in the Asset Optimisation programme and renew the commitment to continual business improvement in the respective areas of expertise,” says John MacKenzie, CEO of the Group’s Copper business, which hosted the conference in Chile.

“Participants are now better equipped and enabled to facilitate the changes required to see Anglo American optimising its asset base, delivering sustainable value and becoming the leading global mining company.”

Vanessa Naicker, head of the operational excellence framework and skills development for asset optimisation at Anglo American, adds, “Being able to visit our operations in Chile and to share in the success stories from across the Group was of immense value. The engagements allowed me to gain a better appreciation of the level of optimisation maturity in the different business units, which will help to inform how we tailor our approach and support to the business units in our journey to operational excellence.”

“Our challenge now is to implement and embed these practices at each one of our operations to truly translate the value being identified to the bottom line and to changing our culture to one that is continuously focused on operational excellence.”PAT Lowery, Group head of asset optimisation

asseT opTimisaTion: how we are delivering The nexT level in business improvemenTmore than 170 delegates from anglo american’s operations across the globe gathered in santiago, Chile, earlier this year to share experiences, best practices and case studies on what has been described as one of the Group’s most exciting initiatives: asset optimisation.

JULY 2012 | 15

The expansion at Los Bronces copper and molybdenum mine in the Chilean Andes. The expansion is one of the largest mining projects in Chile today, and also one of the highest – at 3,200 m above sea level. Chile was the venue for this year’s Group Asset Optimisation Conference.

reAl mInIng

16 | JULY 2012

‘bums on seaTs’:

making The mosT of our people

management gurus are well versed in the statement: ‘Labour is our greatest asset.’ that may be true, but how many companies effectively and regularly measure the efficiency and availability of these assets to understand just how great – or otherwise – theirs actually is? kleinkopje colliery did just that with the aptly named ‘bums on seats’ project.

Mine: Kleinkopje collieryBusiness unit: Thermal Coal

ViTAL STATiSTiCS

Thando Zondi, standing on a dragline at Kleinkopje colliery, where the ‘bums on seats’ initiative has increased direct operating hours from 5.2 to 8 hours per shift.

JULY 2012 | 17

reAl mInIng

Tight labour management is potentially the biggest driver of production in the mining industry. Often we

hear our managers say, “I know where my people are and what they are doing on the mine”. Our senior management at Anglo American’s Thermal Coal business used to believe this – until we implemented the ‘bums on seats’ project at Kleinkopje colliery.

In 2009, we embarked on an asset optimisation strategy at Kleinkopje colliery with the aim of improving its bottleneck operation, namely the hauling fleet operation. This impacts the overall operational efficiency of the mine because it is in charge of hauling pre-strip material and coal for the operation.

On deeper analysis using various asset optimisation tools, downtime due to no operator (DONO) was seen as the biggest problem due to high absenteeism, wrong labour deployment and insufficient labour. The upshot was that DONO was costing the entire mine more than 4,000 production hours per month – or a whopping 35% loss in productivity and efficiency.

Behind DONOThere were a number of potential reasons behind the DONO issue:l absent without permission (AWOP)l poor or incorrect deployment or allocation of labour l the quality of foremen/supervisors vs electronic systems l incorrect allocation of labour owing to lapsed truck

licencesl insufficient labour. But because this downtime was normally registered as ‘no description’ rather than ‘no operator’, we could not confirm the exact cause.

The ‘bums on seats’ project changed all that. We conducted a rigorous review of our labour management system – from operator level to the colliery’s senior management. Out of this, we implemented a number of systems to measure and improve our greatest asset’s availability and productivity, and so address our increasing production demands. These included:l single source data, fixing labour reporting and data

capturing processes and systems, resulting in a single source of data and single version of the truth

l AWOP parades – closing the gap on AWOPl a centrally co-ordinated leave databasel labour allocation systemsl a lapsed licences management systeml operator deploymentl labour gap management.

The AWOP issue is being tackled as follows: together with their supervisors, absent employees are stopped at the gate on the day of their return to explain their absence. This information gives HR a clear understanding of the situation. HR uses this opportunity to either educate the supervisor and the employees about the company policy, or to start the disciplinary hearing procedure, if necessary.

Each department, from foreman level to head of the department, has a weekly waterfall graph stating the number of people who were absent, the reason for each absenteeism and the action taken against the deviation. This information is then rolled up through the labour management system all the way to the heads of departments and general manager production meeting.

Lessons learnedAs is often the case, there was no one single problem, but rather a combination of various factors. Key lessons learned include:l tight labour management is potentially the biggest

driver of productionl do not assume the basics are in place and workingl correct details lead to fact-based conversations.

Sustainability‘Bums on seats’ is currently sustained through various systems, including structured labour management meetings by the employee relations department, training, mining and asset optimisation. Further and ongoing training is needed to meet the skills required to sustain these improvements, including:l monitoring training overrunsl lapsed licence managementl supervisory skills trainingl critical skills training.As part of our benchmarking practice within Thermal Coal, all our successes achieved through the project have been rolled out to four other coal mines, and serve as a benchmark for operations like Platinum’s Mogalakwena mine and several other mining houses.

The ‘bottom’ lineWe learned much from the project and have benefited from real achievements with tangible results. But of all lessons learned, two fundamental points stand out for us: data integrity is vital; and accountability lies with the frontline supervisors, not computer systems.

fAST fACTS

Through the success of ‘bums on seats’ between 2008 and 2011, Kleinkopje colliery achieved:• Data capturing

accuracy improvement of more than 80% ‘single source data’.

• An improvement of more than 30% on hauling fleet direct operating hours.

• An improvement from 5.2 direct operating hours (DOH) to 8 DOH per shift.

• Overall mine ‘downtime no description’ reduced from 5,000 hours to just under 1,000 hours per month.

67%the improvement

on labour availability achieved at

kleinkopje colliery.

18 | JULY 2012

digging iT:exCellenCe in exCavaTor opTimisaTion

Open pit operations at Drayton coal mine, Australia, which is today recognised in open cut mines as having the best practice in the use of excavators.

JULY 2012 | 19

Drayton mine is an open cut coal operation in the Hunter Valley, New South Wales, Australia,

producing an export thermal product since 1983. It is one of Anglo American’s most geologically challenging metallurgical coal operations, with up to 20 metre (m) faults, a multitude of smaller faults that crisscross the operations, prominent thrusting, and coal seam dips that reach up to 18% in places.

Today, Drayton is recognised in open cut mines as having the best practice in the use of excavators. Each of the mine’s two EX5500 excavators have historically delivered more than 10 million bank m3 of overburden annually; and the mine currently produces around 5 Mt of thermal coal each year for export and domestic (Australian) markets.

This remarkable turnaround has been achieved through a comprehensive business improvement focus tackling a number of key production initiatives simultaneously.

Key production initiativesPart of maximising the utilisation of the equipment was fully understanding the situation, including contributing problems, and then targeting opportunities to decrease the pinpointed delays and related inefficiencies. Through this we aimed to achieve our internal target of 90% utilisation (excluding weather-driven delays).

the issue of production inefficiency is hardly unique to mining, but improving the task of excavating hundreds of feet underground, with people’s lives as a key consideration, brings with it some pretty distinctive challenges. it stands to reason then that a complex and multi-faceted problem requires a holistic and comprehensive business improvement solution. having designed just that, going down is now looking up at drayton mine.

A number of key production initiatives were identified and actioned as part of the business improvement focus. Importantly, this involved various stakeholders across the business, including managers, supervisors and operators.

1. Minimising shift handover timesHot seat changeovers (how long it takes for one operator to come off the shift and the next to start) for 2009 averaged 23 minutes, bucket to bucket. We are currently running at an 18-minute average. We aim to reduce this to 12 minutes and sustain this effective handover going forward. With examples of 10-minute handovers, we believe our continuous improvement approach will deliver this goal. The process that is in place clearly works, and has been achieved by: Supervisors: Observing and managing the handover in the pit, including auxiliary equipment; counselling and coaching where necessary for non-compliance; and feeding back handover results to operators.Dispatchers: Calling last trucks from diggers and tips about the changeover (audible on radio); setting up the changeover whiteboard to indicate truck location (tip or digger) for the ongoing crew; allocating manhauls for transport; calling ‘light vehicles away’ as the light vehicles leave the go line; monitoring compliance of the crew regarding truck park-up, and noting any non-compliance; and monitoring radio protocol compliance.Off-going operators: Maintaining radio protocols around shift changes for ten minutes before and after the hour, limiting transmissions to essential correspondence only; continuing operations, including tipping and loading, until

digging iT:exCellenCe in exCavaTor opTimisaTion

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Mine: Drayton mine, AustraliaBusiness unit: Metallurgical Coal

ViTAL STATiSTiCS

20 | JULY 2012

All this can be achieved by fitting in a number of set passes in a dig area and working to relative levels using the dozer GPS.

This change does not come without its concerns, however. These include material being placed into trucks from a greater height; the excavator needing to sit away from the edge of the dig as the front edge may collapse; and the truck operators potentially being unable to see the excavator for spotting. Naturally, these issues need to be addressed before heights are changed.

Loading at present is to a height of 4.5 m.

Proposed bench heights are:

Benchmarking performanceDrayton’s excavator fleet now delivers benchmark performance within the Metallurgial Coal business, with the major key performance indicator being operational equipment efficiency – EXC306 and 307 are ranked first and second in their category.

Going forwardThere is always room for improvement and a number of challenges remain. These include maintaining a consistent workforce, blasted inventory, material fragmentation and the work areas, particularly the set up and area of a dig. A new Hitachi 5600 Excavator (EXC309) has been commissioned and the same initiative has been applied to this unit.

The team is also trialling the use of 'double benching' in selected areas. The information will be analysed to ascertain the benefits of this mining method.

fAST fACTS

Key production initiatives: • Minimising shift

handover times, including hot seat changeovers and shift address.

• Working through crib times.

• Fuelling strategy.• Establish and

maintain working teams for each excavator.

• Selection of the best excavator operators.

• Designated truck teams for each unit.

• Optimum bench heights.

Dig fragmentation and the minimum work area size are also important when maximising excavator rates.

First pass (heave)

Unconsolidated material

4 m to 4.5 m

Soft (clay/loose)

Unconsolidated material

4 m to 4.5 m

Main or mid passes

Consolidated material (trucks have compacted it)

5 m

Last pass Consolidated material topside loading of coal

2 m to 3.5 mTry not to plan greater than 3.5 m

the last trucks from the tip and digger park-up; staying

with the machines until the last truck arrives; having a

handover discussion with the oncoming operator; and

parking light vehicles in the nominated park-up bays.

On-coming operators: Checking the whiteboard for

vehicle allocation after the tool box talk; observing the

‘dispatch no-go zone’ around shift changes for ten

minutes before and after the hour; only using vehicles

allocated to equipment; not overtaking trucks during the

handover period; parking-up light vehicles safely at work

area until the last truck parks-up; having a handover

discussion with the oncoming operator; not operating until

light vehicles leave the area; undertaking a walk around

inspection; and not parking-up on the go line unless

directed by dispatch.

2. Fuelling strategy

Previously, fuelling was carried out during each shift,

which meant the excavators lost extra time for stopping –

anything up to around 20 to 25 minutes. By incorporating

the fuelling procedure into the shift handover, this

separate stopping delay has been reduced. A key asset

(the equipment) is therefore being utilised more efficiently.

3. Excavator teams

Supervisor involvement is critical within excavator teams

and requires them to maintain reports on operator rates,

have regular and ongoing discussion with operators, and

monitor performance, time in the seat and best operator-

to-operator first and third (owing to breaks the shift is

split into three parts. Supervisors try to ensure maximum

productivity during these two parts of the shift).

There is also a visual board for operators to identify

which unit they are on, the location of equipment and what

tasks are required during their shift, while dispatch has a

manning sheet to work from that is a reminder of where

operators sit in their designated teams. This board must be

maintained.

4.Optimum bench heights

There are a number of benefits in increasing some bench

height passes. Foremost is the increase in productivity.

However, improving the bucket fill factor (materials fall

into the bucket without lifting the bucket higher) and

decreasing both the amount of excavator movement

(less walking the excavator on the bench) as well as the

amount of floor preparation (fewer passes over a large dig

area), are also upsides.

There are about 41 correlated plies over an interval of approximately 120-140 m. Coal thickness ranges from <0.2 m to >6.0 m, with the current mined coal thickness averaging 1.4 m.

drayTon geology

12minutes is the

target time for shift handovers.

JULY 2012 | 21

geT resulTs and keep Them:The susTainabiliTy Challenge

the rules of engagement in business have changed radically in the last few years. darwin’s theory has adapted from survival to sustainability of the fittest. but sustainability is not just about environmentalism, as is often thought. it is a fundamental strategy that aims to create lasting value rather than piling up short-term transactional wins, thus improving the competitiveness and long-term survival of any organisation. so, to get sustainably fit, Platinum’s mogalakwena mine had to step up its improvement regime.

Mine: Mogalakwena mine Business unit: Platinum

The global economic climate has necessitated that all industries across the board tighten their belts;

ours is no exception. With ever more pressure being applied to perform in a fiercely competitive market, and as Anglo American’s flagship platinum operation, it was up to Mogalakwena mine to take the lead in the business improvement arena, with sustainable results.

Mogalakwena is situated 30km north of the town of Mokopane in Limpopo Province. We operate under a mining right covering a total area of 137 km2. The current infrastructure consists of four open pits, namely Sandsloot, Zwartfontein South, Mogalakwena Central and Mogalakwena North.

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ViTAL STATiSTiCS

Risk officer Randall Groenewald looks out over the Mogalakwena platinum mine.

22 | JULY 2012

Defining sustainabilitySetting out to create sustainable change is all well and good, but how exactly do we define sustainability? To try and answer this question we started by considering the contemporary theories on achieving change and sustainable results.

From these ‘recipes’ for sustainability we created a set of combined themes. We then compared these with what we experienced as the key success factors for achieving sustainable results. Our objective was to arrive at a set of simple, practical factors to ensure that any improvement or development projects deliver these desired sustainable results.

From experience, there are five real key success (or failure) factors and enablers that facilitate change on a site and which, if not addressed, can torpedo any improvement project. The following are some of the practical experiences that we gained through our journey of dust, sweat and tears.

“Sustainable change, by definition, means one that lasts for a significant period of time and one that sticks – not the type of change that you practise for a few weeks only to then fall back into old, less valuable patterns of behaviour.”SCoTT MArTineAu, Ceo of Consciousone.com

1 Real buy-in: To ensure real buy-in, the general manager must be visible and on-hand at all times, consistently conveying the message of urgency and leading by example – ‘not saying, doing’.

2 Communication: Communication about sustainability and affiliated projects must be all-prevalent, all the time, everywhere, almost to the point of saturation.

3 Project leader: While we cannot all have the natural leadership skills of Mandela or Gandhi, it is vital that the nominated project leader is passionate and focused on sustainability as a whole, and their projects in particular. This person must have the power and character to motivate others to reach the desired goals and objectives, as well as the skills to create formalised commitment and planned recognition for his/her project.

4 Positive reinforcement: This comes from exposure to action, not just words. In addition, you need clear targets and encouragement to achieve these targets.

5 Over and over and over: It is important for goals to be anchored firmly in our strategies and policies, with no option to turn back, and for messages to be repeated again and again so that eventually they – and their associated actions – become part of ‘the way we do things’, and part of our inherent DNA.

While we knew that developing projects that provide trackable sustainable results was the way forward, one of the biggest challenges was gaining buy-in to implement and deliver these projects. But while getting results is hard work, keeping the results going is even harder!

The answer? See point number 5.

DiD you Know?

From the theories, there are a number of combined themes that together facilitate sustainability:

SuSTAINABILITy 4 urgency 4 Vision 4 Buy-in 4 Actions 4 Successes 4 Embedding

5the number of key

factors that can make or break the long-term effectiveness

of any improvement project.

keY sUCCess faCtoRs

Positive reinforcement

Project leaderCommunicationReal buy-inOver and over

and over

SuSTAINABILITy – THEORy

SuccessesActionsBuy-inVisionurgency Embedding

SuSTAINABILITy – DuST, SWEAT AND TEARS

JULY 2012 | 23

sTanding ouT in a CrowdWith so many products vying for attention – and the dominant position – in any one market, companies are always looking to make theirs stand out. this differentiation involves a product having special qualities that set it apart from the competition. kumba iron ore used its products’ own unique physical properties to do just that.

Kumba Iron Ore has a unique South African iron ore footprint in that it comprises three mines situated

throughout South Africa: Sishen and Kolomela mines in Northern Cape Province, and Thabazimbi in Limpopo Province. These mines are operated by the Sishen Iron Ore Company, which is 74% owned by Kumba Iron Ore. Sishen mine is one of the largest open-pit iron ore mines in the world. Yielding very high quality lump ore,

it produced 41.3 million tonnes per annum (Mtpa) of beneficiated product in 2011.

Kolomela mine is Kumba Iron Ore’s growth story. Commissioned five months ahead of schedule, production commenced in the fourth quarter 2011. At full capacity the mine will deliver 9 Mtpa of high quality seaborne iron ore (lump and fine ore) and is expected to operate in the lower half of the cost curve.

Established in 1931, Thabazimbi mine produces for the domestic market. Ore reserves are at 10.4 Mtpa, with an annual production capacity of 2 Mtpa. The life of the mine extends to 2016, after which the Phoenix project will replace current production.

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Mines: Sishen, Kolomela, ThabazimbiBusiness unit: Kumba Iron Ore

ViTAL STATiSTiCS

Changing Kumba Iron Ore’s lump cut point is yielding some 2.5 Mt of additional lump ore per annum.

24 | JULY 2012

Product differentiationThanks to the unique physical characteristics of our ore we were able to introduce exciting product differentiation. Around this differentiation we created a niche product strategy with the potential to add value to Kumba Iron Ore and our customers.

We developed two strategic initiatives: l Maximising lump ore into 20 mm and 27 mm lump

products.l Maximising the lump:fine ratio.First we developed two niche products, based on optimised particle size distribution, by sizing the high-grade lump ore. This then produced:l Enhanced reducibility properties (20 mm lump ore) to

decrease the fuel rate and improve productivity in the blast furnace process.

l Superior undersize properties (27 mm lump ore) to introduce a handling resistant lump ore to improve the lump yield to customers.

We also realised that increasing the volume of the niche lump products from around 2-3 Mtpa to about 12 Mtpa could be achieved through a fairly simple capacity expansion process.

The second strategic initiative was introduced after considering the major competitor lump ores available in the market. It was realised that changing our lump cut point from 8 mm to 6.3 mm, in line with the competitor ores, would yield some 2.5 Mt of additional lump ore per annum.

Keen knowledge of our organisation and our competition, together with a creative approach, were essential to our product differentiation:l Resource knowledge – size, grade and variability.l Product characteristics – physical, chemical and

pyro-metallurgical.l Beneficiation capabilities – sizing or screening, and

reduction of impurity levels.l Logistical constraints – inbound and outbound logistics.l Market knowledge – customers and competitors.

fAST fACTS

Kumba’s iron ore has superior pyro-metallurgical, chemical and physical properties:• High tumble index – breaks down less during handling and transportation.• Low abrasion index – creates less dust.• High decrepitating index – excellent thermal shock resistance.• Low reduction disintegration index – breaks down less during reduction in the

top part of the blast furnace and direct reduction shaft furnace.

Price vs qualityIn the end it comes down to perceived value. Specifically, what is the maximum price a steel processing plant is prepared to pay for a replacement material without negatively affecting its economic results?

We also need to consider how to extract maximum sustainable value through knowledge and understanding of the value-in-use benefit through the entire production process. Value-in-use calculates the maximum price a customer would be prepared to pay after:l The value-in-use of other available competition ores

has been determined.l Consideration is given to the full value chain in the

calculations.l Cost/benefit implications, relative to a base blend,

have been calculated for chemical, physical and metallurgical properties.

Key successesChanging the Sishen lump cut point from 8 mm to 6.3 mm, in line with our major competitors, has the potential to add substantial value to Sishen mine alone, when implemented in the third quarter of this year. Converting all (12 Mtpa) export dense-media separation lump ore production to niche products has already added significant material value to the Sishen base case.

Key value drivers While customers, markets, competitors, resources, plant capability, products, beneficiation technologies, product differentiation and industry knowledge allowed us to develop and implement this niche product strategy, our key value drivers were niche product volume, lump ore premium and the lump:fine ratio.

Key lessonsBusiness improvement is a never-ending, continuous process and its development should be based on sound industry knowledge and committed teamwork. When products are developed to address specific customer requirements they invariably add value, and adding value to our customers adds value to Kumba Iron Ore and therefore the Anglo American Group as a whole.

Keen knowledge of our organisation and our competition, together with a creative approach, were essential to our product differentiation.

projeCT khulisa:

Thermal Coal’sgame plan

our strategic target for thermal Coal is to grow our business value by 50% by 2020. asset optimisation’s contribution towards this was set at $700 million by the end of 2012. however, these targets raised the following questions: What is the potential (size of the prize) of each of the mines? and how should thermal Coal set about achieving this potential?

JULY 2012 | 25

This focus informed the asset optimisation game plan for 2011, with the dual focus of how to deliver the

strategy and drive ownership of the game plan at mine level by the general manager and the team.

The formulation and development of the asset optimisation game plan took place in the first quarter of 2011, with the input and full support of the Thermal Coal ExCo. We began implementing the plan in the second quarter of 2011, with a pilot diagnostic conducted at Goedehoop colliery. Project Khulisa was born.

ObjectivesKhulisa is an Nguni word (Matabele, Pedi, Zulu and Xhosa language group) that means ‘to grow to full potential’. It has a rich and pertinent meaning as it is applied

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Mines: All South African minesBusiness unit: Thermal Coal

ViTAL STATiSTiCS

0101

26 | JULY 2012

fAST fACTS

Key ongoing questions:• What are we trying

to achieve?• What metric key

performance indicators are we trying to fix?

• What problem will this solution fix?

• What is the scope of the problem?

particularly to developing a child to help him/her attain his/her full potential as an adult.

The aim of the Khulisa pilot at Goedehoop was to:l Define the art of the possible, or the ‘size of the prize’

along four key metrics: production (tonnes); cost (rand per tonne); productivity (tonnes per full-time employee during a fixed period); and net present value (NPV).

l Define a road map of how to achieve this, including a defined timeline.

l Develop a methodology that could be replicated across all 10 mines in South Africa.

Implementation We engaged management consultants McKinsey & Company to assist with the Khulisa diagnostic, as well as to provide credible international benchmarks to define the ‘size of the prize’. At the end of the Khulisa pilot we had identified initiatives that would deliver the potential of the mine by 2015.

As well as focusing on the ‘hard issues’ of equipment and key performance indicators, the Khulisa pilot diagnostic

also investigated the ‘soft issues’ of people skills, mindsets and behaviours that underpin overall performance.

The Khulisa pilot built on the foundation of the Best Value Option (BVO) analysis we conducted at the mine during 2010. This involved restructuring the operation to reduce our footprint from 13 underground sections, three shafts and two beneficiation plants, to 11 underground sections, two shafts and two beneficiation plants, resulting in a significantly improved NPV of the operation.

Following a detailed tender process we then rolled out Khulisa phases 2, 3 and 4, covering the remaining mines.

Phase 2 commenced in the third quarter of 2011 and covered four mines, all commencing simultaneously. While phase 3 was due to start thereafter to cover an additional three mines in a similar manner, phase 2 created such a severe draw-down on asset optimisation resources that subsequent implementations were rescheduled with a staggered start date later in the year to lessen the load.

Phase 4 was added to the process to cover the remaining two mines. It started during the fourth quarter of 2011 at Landau colliery. As this site had undergone an

01 Overleaf – employees shovelling coal at the Goedehoop colliery plant. The Khulisa pilot project that was run at Goedehoop has resulted in 89 improvement initiatives that will be implemented at mines throughout Thermal Coal.

02 Goedehoop colliery employees viewing a section of the plant.

02

JULY 2012 | 27

operation review from May to July 2011, we conducted a Khulisa ‘Lite’ diagnostic, focusing largely on the soft issues, and completing it in December 2011.

The roll-out to the final mine, Kleinkopje, was delayed to early 2012 due to a restructuring from a four-dragline, four-pit operation to a two-dragline, two-pit operation.

Rigorous adherence to the 20-step DMAIC (define, measure, assess, implement and control) process – incorporating appropriate stage gate reviews – encourages project governance, line ownership and accountability, and formalisation of project tracking. It also ensures that the best solution is achieved.

Key successesThe results of Project Khulisa to date are 89 initiatives that will be implemented across the mines, adding an additional five million saleable tonnes per annum, reducing unit costs by R19/tonne (2011) and improving productivity by 1,400 run-of-mine tonnes per annum by 2015.

Integral to the implementation of Project Khulisa was the development of a tracking and controlling tool

– the Khulisa ‘cockpit’ dashboard. Developed in Excel, the Khulisa cockpit tracks progress across the four dimensions of production, costs, productivity and value, as well as the underlying key performance indicators that support these projects.

Backed up by detailed implementation plans per initiative, the cockpit gives ExCo an aggregated view of Khulisa, allowing the implementation progress to be tracked, and giving an individual mine view with which each general manager can track the progress at their site at a glance.

SustainabilityThe asset optimisation game plan for 2012 is entitled ‘The year of implementation’. All Thermal Coal asset optimisation practitioners received additional training in the first quarter of the year to equip them with the necessary skills and tools to implement and track the project, and to accelerate the delivery of Project Khulisa value. To date, some 83 of the 89 projects are in various stages of implementation.

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5 Madditional tonnes

created by Project khulisa.

developing skills To ‘sTarT The fuTure’

28 | JULY 2012

Mine: Sishen mineBusiness unit: Kumba Iron Ore

ViTAL STATiSTiCS

‘start of bokamoso’ (sob), which means ‘start of the future’, was the inspiration and name for the sob Lean management

workshop that was implemented at sishen mine. besides changing mindsets, it aims to build employees’ understanding of the tactical

implementation plan (tiP) review process at this operation.

01

JULY 2012 | 29

developing skills To ‘sTarT The fuTure’A TIP review is a live interactive discussion and

feedback session aimed at stimulating challenging dialogue around improvement drive implementation plans, while the SOB workshop is specifically aimed at equipping employees with the procedures and tools to effectively manage an improvement initiative on almost any process in the work environment.

Based on the asset optimisation principles adopted by Anglo American, the SOB Lean workshop developed and enhanced asset optimisation skills, knowledge and preparation for any employee involved in the TIP review.

The ‘lean’ in lean management is about preserving value while working more efficient and effectively, and the long-term goal of the workshop is to empower employees

30 | JULY 2012

PAnIc AttAcK – FIve whYs AnD the IceBergA ‘panic attack’ manifests in visible behaviour.

1. WHy do you have a ‘panic attack’?

2. WHy do your thoughts cause you to behave in this way?

3. WHy are you feeling this way?

4. WHy are your beliefs/values causing these feelings/thoughts?

5. WHy do you not address your unmet needs?

Einstein once said that problems cannot be solved at the level they occur.

The same applies to behaviour.

Behaviour

Thinking and feeling

Values, priorities and beliefs

Needs: met and unmet

to apply the SOB process, giving them the opportunity to use the prescribed templates and prepare them for a TIP review.

Each workshop consists of ten modules:Module 1: An overview of why management has implemented the SOB process, and an interactive exercise through which participants share what they know about the process. Safety and the aim of zero harm are also discussed.Module 2: During this module, participants discuss the seven megatrends that could affect our business, and start to understand why asset optimisation is vital for moving Sishen mine from being ‘good’ to being ‘great’. Module 3: The SOB process is explained in terms of the concepts of diagnostics, capability building, intensive week, implementation, mindsets and behaviour.Module 4: This covers the process of bottom-up, continuous improvement that employees can follow to register an improvement idea in their immediate work environment, as well as a simplified version of the SOB process.Module 5: The relevance of ‘waste’ and ‘lean management’ in the mining environment is touched on, and concepts such as the eight common types of waste in a production system, overall equipment effectiveness, and enemies of ‘lean’ are covered. Various lean management tools are introduced and real-life examples provided. Course participants get an opportunity later in the workshop to apply these concepts to an improvement idea that they have identified. Module 6: This explains three key SOB templates, namely: A3 (which summarises the current condition, root causes, target condition and proposal of what will be done); TIP (which describes actions needed, the order of execution, responsible persons, the support needed,

and whether the existing standard operating procedure may change); key performance indicators against which the success is measured; and the issue resolution sheet (which summarises the ‘issues’ that hinder progress and what is needed to solve the problem, by whom and when).Module 7: In this module participants get the opportunity to integrate ‘lean’ concepts and apply the SOB process and tools on an actual improvement idea.Module 8: This module is rated as ‘excellent’ by most course participants since it is a simulation of an actual TIP review and the most experiential part of the workshop. Participants present their TIP and receive immediate feedback. Part one includes a TIP review without structured dialogue and feedback, while part two is a TIP review with structured dialogue and feedback. Module 9: An important part of the SOB process is to change blocking mindsets, and this module addresses questions such as why people are scared to present their TIPs. The ‘5 WHYs’ (see diagram below) is a tool to guide participants to better understand their behaviour, thoughts, feelings and underlying met/unmet needs during a TIP review. Module 10: The workshop ends with a motivational ‘what’s next’ module to explain to participants what is expected from them in terms of asset optimisation.

During the past two years, certain essential findings have become evident in the asset optimisation/SOB process:l The asset optimisation/SOB process is nothing new

to most participants. What is new is the passion and energy with which the workshop and process is driven and implemented.

l Debriefing each module in order to link one to another is vital in strengthening any experiential learning experience.

01 Overleaf – overlooking the separation tanks at Kumba Iron Ore's Sishen mine, where the 'Start of Bokamoso' workshops are helping to apply the asset optimisation process.

02-05 Kumba Iron Ore employees during a TIP review.

the ‘lean’ in lean management is

about preserving value while working more efficient and

effectively.

JULY 2012 | 31

DiD you Know?

Adult learning is a specialised field that is best approached with stimulating, innovative and fun learning techniques. In the SOB workshops, participants are asked to draw a big, free-flowing infinity sign lying horizontally on its side with a horizontal line through the point where the sign crosses itself.• If their ‘eight’ is bigger

at the top it means they are more visual, learn best through seeing, and prefer talking face to face.

• If their eight is wider or fills the page to the sides, it means that they learn best by listening and remember what they have heard. The ‘what’ and the ‘how’ is important to them, and they may prefer discussion (auditory).

• If their ‘eight’ is bigger at the bottom it means they are more inclined to be tactile (prefer touch), emotional and to talk to themselves. They learn best by hands-on experience, not by being told or shown how.

l The greater the degree to which employees relate moments of personal insight (those ‘aha’ moments) with the course content – however technical – the better their application is of what they have learned.

Key learnings from these workshops include:l Have a common generic thread (SOB process) woven

through the different modules to spark the innovative thought process.

l Ensure freedom of problem selection. Having the option to choose from a range of equally relevant problems that need solving, contributes to higher creativity and impact.

l Create equal participation. When all participants contribute equally and take turns in leading discussions, with no reference to job title, grading or

position, there is a greater sense of ownership, and more substantive and creative input.

l Incentivise participation. When participants are able to envision the positive impact that the content of the workshop will have on their working environment, it results in more energy and creativity. This is in line with adult learning principles, which suggest that people are willing to devote energy to learning things that they believe will help them perform a task or solve a problem.

l Interdisciplinary workshops are a powerful potential source of radically innovative ideas, if conducted properly, and as long as they centre on a problem that is of significant interest to all, and include an optimal mix of experts who can help to understand the problem.

02

03

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05

32 | JULY 2012

MIne On A MISSIOnThe people at Thabazimbi mine, part of Anglo American’s Iron Ore business, have a new view on company strategy thanks to the Mission Directed Work (MDW) teams programme.

MDW is an innovation-driven project in which outputs are measured against sets of objectives to determine efficiency levels. The aim is to help teams to align their targets to support Kumba Iron Ore’s company strategy, and to empower them to take charge of their daily performance. The project was implemented at Thabazimbi during March 2011. The first multi-level meeting and MDW progress report was presented just less than a year later.

“Our goal is to ensure company strategy and other vital communication is filtered in a simple form right from management level through to the operator in the pit,” says Cornelia Holtzhausen, general manager of Thabazimbi mine.

The MDW teams are encouraged to know more about their mine and the iron ore business as a whole in order to help them to align the broader strategy to their day-to-day work.

And so far, it’s working: since implementation there has been a significant improvement in safety behaviour. On the back of this success, the Thabazimbi team sent a representative to the recent Asset Optimisation Conference in Chile to share this best practice.

Built at a cost of R4.2 billion in the midst of a crippling global recession, the new Zibulo colliery is proof of Anglo American’s conviction that true

partnerships last beyond good times. So said Norman Mbazima, Thermal Coal CEO and chairman of the AAIC board, speaking at the official opening of the mine in earlier this year.

“This development is a shining beacon to our country’s future and symbolises our inherent strength and resourcefulness as a nation.”

In the short time since its commissioning, Zibulo has invested more than R50.5 million into the nearby Phola township, and this figure will grow by a further R10 million before the end of the year. In addition, the operation employs 1,097 people, most of whom reside in Phola.

“I congratulate Anglo American and Inyosi Coal for the successful commissioning of this mine,” said Minister of Mineral Resources Susan Shabangu, expressing her satisfaction at the fact that women have been placed at the helm of the transaction and work, not only at board level but also at the coalface.

“Not many people realise that Anglo American was in fact a catalyst in the transformation of the mining industry in South Africa.”

Speaking on behalf of the Inyosi partners (Lithemba Consortium, Pamodzi Coal, WDB Investment Holdings and a community trust), Inyosi Coal chairperson Yoli Balfour said, “Today is an important day for empowerment in South Africa, and particularly for women and the communities that reside in and around our operations.”

Zibulo deClaredoffiCially openanglo american has pressed the ‘start button’ for the first major project in our flagship empowerment venture, anglo american inyosi Coal (aaiC), to come on stream.

fAST fACT

Zibulo will be followed by New Largo colliery, with construction set to commence in 2013.

01

8 Mtonnes that will be produced by Zibulo

once it ramps up to full production

later this year.

JULY 2012 | 33

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01 Minister of Mineral Resources Susan Shabangu presses the ‘start button’ at the official launch of Zibulo colliery. Godfrey Gomwe, executive director of Anglo American South Africa Ltd, Inyosi Coal chairperson yoli Balfour and Thermal Coal CEO Norman Mbazima look on.

02 Seen with staff at the launch of the new wellness clinic in Thabazimbi are representatives from Kumba Iron Ore, the local municipality and government.

iT's True: healThy employees are produCTive employeesWorkplace behaviour is potentially influenced by many factors outside the work environment, which is why, at Anglo American, every employee’s health and well-being is considered and managed holistically. A new wellness clinic at Thabazimbi, funded by Anglo American’s Iron Ore business, Kumba Iron Ore, is an example of this belief in practice.

The centre was officially opened by Dikeledi Magadzi, Limpopo’s MEC for Health and Social Development, on 11 February this year. The state-of-the-art, fully equipped clinic will benefit both the mining community and Thabazimbi’s residents.

“We are grateful that Kumba’s Thabazimbi mine has seen the need to invest in the health of its workers and

the surrounding community,” said Magadzi at the wellness centre’s opening.

“Working together with the private sector to improve services was the way to go. We believe that by working with like-minded businesses of Thabazimbi mine’s calibre, we will deliver more services to our communities.”

“The opening of the wellness centre is an exciting development,” said Cornelia Holtzhausen, general manager of Thabazimbi mine. “This means we can look forward to a healthy community who will be able to get essential information on HIV counselling and testing.”

The centre will embark on an extensive community outreach programme that will target schools and families, aiming to promote a healthy lifestyle and prevent diseases.

02

isibonelo gives power To The peopleBy far the largest community development project undertaken by Thermal Coal’s Isibonelo colliery to date, is its significant contribution to the upgrading of the medium voltage network in Bethal, Mpumalanga.

The network upgrade project intervention came about through the mine’s participation in the integrated development planning process of Bethal’s local municipality. Until recently, one of the region’s major challenges had been irregular electricity supply to residents of Bethal and the neighbouring Emzinoni township. The situation had reached the point where power was unavailable for extended periods and, at times, days on end.

“Cables were failing on a daily basis, rendering the situation untenable,” says community development superintendent Nkosinomusa Motsoeneng, adding that the mine invested R10 million into the project as one of its social and labour plan commitments.

Provincial government and the municipal authority commissioned a full field survey of all existing reticulation to formulate a sustainable solution, and the findings instigated a multi-million rand project to upgrade the medium voltage network. Owing to its size and complexity, this was carried out in three separate phases, starting with the upgrading or replacement of electrical substations and switchgear, the repair and replacement of local transformers and miniature substations as well as the replacement and upgrading of 11kV and primary low voltage cables. The final stage saw the upgrading of street lighting in residential and industrial areas.

As a result of this project, all consumers within the distribution area now have regular and reliable electrical power.

34 | JULY 2012

fAST fACTS

• A wireless link will be added to the E-Sampler that will transmit readings to its main offices more than 10 km away.

• Additional features include the ability to provide temperature readings. This will be of special use under extreme conditions in winter and summer, as it will indicate the need to take extra precautions such as the issuing of thermal clothing or the use of fans.

done and dusTed!new Vaal colliery has achieved a major advance in the vital area of dust control with the installation of an e-sampler aerosol monitor in its run of mine primary tip.

According to ventilation and occupational hygiene engineering officer Jan de Jager, the monitor represents a major advance over the colliery’s

existing personal direct reading instrument as it provides real-time dust readings on a round-the-clock basis.

“The E-Sampler, which is positioned between the tip’s two processing streams, is interlocked with the tip’s feeders and stops them immediately if ambient dust readings exceed the legal limit of 2 mg/m³,” he says. “Should this occur, the tip will remain on stop until the cause has been identified and eliminated. Tip personnel are alerted to the potential danger of overexposure through strobe lights automatically activated by the device, and will vacate the area until dust levels fall back to acceptable levels.”

The E-Sampler represents a further positive gain in New Vaal’s efforts to contain dust emissions, which have seen considerable success over the past few years. It will also help the colliery to reach the Department of Mineral Resources’ 2013 occupational health milestone pertaining to dust.

New Vaal colliery has installed an advanced dust monitoring system in its run of mine primary tip.

JULY 2012 | 35

making sound sense of hearing proTeCTionGoedehoop colliery is beating the risks associated with noise by introducing custom-made hearing protection as well as one-on-one employee sessions with ‘hearing coaches’.

The programme started with the identification of noise sources and a detailed examination into which occupations are most likely to be affected. So far, more than 400 employees have undergone a detailed hearing assessment by a qualified audiologist.

One of the initiative’s priorities has been to debunk a number of popular misconceptions during personal interviews, such as the notion that ear protection eliminates all forms of noise, making communication impossible. Another myth is that noise-induced hearing loss (NIHL) has mild consequences, and that people can simply buy a hearing aid and hear as they always did. Although glasses can, in most cases, correct vision to nearly normal, hearing aids cannot do likewise for NIHL.

A major benefit of the programme is that hearing loss can now be detected at an early stage, whether it be caused by noise, exposure to chemicals or chronic disease. This enables the mine to put the necessary measures in place to prevent further deterioration.

The programme will be implemented across Thermal Coal in 2012.

Sponcom, which is caused by coal coming into contact with oxygen, creates numerous problems, especially

at opencast mines where old underground workings are present.

Apart from its risks to health, safety and the environment, problems associated with sponcom include the deterioration of high walls and slopes, fire damage to vehicles and equipment, and a substantial loss of an operation’s most valuable asset – coal. In addition, hot coal and ash damage plant conveyors and equipment.

“We recently acquired a camera that records thermal and optical images simultaneously, and the information generated by these is communicated in an immediate ‘sponcom flash’ to facilitate speedy reaction times in dealing with this risk,” says geologist Ester Dhege.

Sponcom is often not visible to the naked eye, even though temperatures may be in excess of 900ºC. However, with the use of this technology, employees identified as many as six affected areas every week during the initial stages of the programme.

Apart from ensuring that sponcom is promptly dealt with, the initiative has built up a very real awareness among employees as to the disadvantages of this threat and the real risks it poses to the mine and its staff.

“By accurately detailing locations, pit staff have been able to take rapid remedial action, and people are really taking ownership of the problem,” addes Ester. “In addition, the incidence of new areas affected by sponcom has been significantly reduced.”

CombusTion CaughT (and ConTained) on Camera ...thermal Coal is turning up the heat in its drive to locate and control spontaneous combustion (sponcom) through the use of thermal imaging.

reAl PeoPle

So far, more than 400

employees have

undergone a detailed hearing

assessment by a qualified audiologist.

fAST fACTS

Sponcom is a problem inherent to the coal mining industry, and to mitigate its impacts, our opencast mines have adapted standard mining practices. These include:• using water sprays

to cool down affected areas.

• Smothering hot spots and cladding high walls.

• Sealing affected areas to prevent exposure to oxygen.

• Loading out coal quickly and efficiently, thereby removing the source of fuel.

36 | JULY 2012

iT’s offiCial:

plaTinum’s proCess operaTions are up To sCraTCh!For a company to provide its employees with adequate opportunities to obtain national qualifications, it has to be suitably accredited.

For Platinum, this means ensuring that all its operations comply with the four pillars of the Mining Qualifications Authority (MQA) that is, implementing and managing a quality management system, a learning delivery system, a strong assessment system and a moderation system to complement the assessment process.

For some time the different operations have been working as a collaborative team to obtain their individual ISO certifications, before registering qualified assessors and moderators, compiling portfolios of evidence and undergoing the audit process.

Internal competency assessments earlier this year indicated that the newly designed systems were up to scratch, and subsequently all Platinum’s process sites, concentrators, smelters and refineries have successfully obtained their MQA accreditation.

This is no mean feat. Since news of the accreditation has spread, several other mining houses have visited Platinum’s operations to benchmark their human resource development systems and processes.

Platinum’s new system will now form the basis of all career development within its process division.

The mining locomotives used in Anglo American’s Platinum business present an ideal opportunity for implementing hydrogen fuel cell technology. Not only do fuel

cells offer superior energy efficiency and productivity, but when used to power the locomotives they also provide a more economical, environmentally friendly and safer means of underground transportation.

Platinum has now unveiled a platinum-based fuel cell-powered mine locomotive prototype, with plans to build and test five more in the next six months.

A fuel cell is essentially a gas battery that produces electricity as long as it is fed with hydrogen gas. Current locomotives are powered by batteries that are charged using electricity from the grid. They typically lose power towards the end of the shift, potentially impacting on production. The fuel cell, on the other hand, will produce power

hydrogen fuel Cell projeCT is righT on TraCkhundreds of metres below the surface, electrically charged mine locomotives hum forwards and backwards moving ore in south africa’s busiest platinum mines. thanks to pioneering work by anglo american, these locomotives could soon be replaced with hydrogen-powered alternatives – a move described as “one of the most exciting opportunities for south africa in the green economy”.

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hydrogen fuel Cell projeCT is righT on TraCkat full capacity as long as it has a source of hydrogen gas, meaning that the required output is maintained and there is no need to change or recharge it. And because the locomotives draw power from a clean energy source, they do not emit noxious gases.

Neville Nicolau, Platinum CEO, explains that the project is being delivered in collaboration with Vehicle Projects, Trident South Africa and Battery Electric.

“We know that the challenges we face around climate change cannot be tackled in isolation, and partnership is critical in order to create practical, long-term solutions,” he says. “We are confident that we have developed a viable technology as a result of our collaboration.”

Surface testing of the locomotives will start in the third quarter, and the extended pilot at the end of this year. Initial tests will take place on a half-level in a mine to prove the concept, followed by a move towards full-scale commercial production. Potentially all of Platinum’s mines could convert to fuel cell-powered locomotives.

The locomotives will continue to be manufactured in South Africa. Initially, the fuel cell stacks and some of the associated engine components will be imported; however, Platinum’s strategy seeks to promote the local manufacturing of components, in line with government’s beneficiation drive.

Platinum is collaborating with the South African government and technology partners to further explore prospects of fuel cells as an integral part of the energy sources that help to reduce the country’s carbon footprint. Platinum has also established the Platinum Group Metals Development Fund (PGMDF), to increase the use and application of PGM metals by investing in entities that support PGM development or use PGM technology in their products or processes. The fund has already invested in fuel cell technology.

Fuel cell technology is seen as a strategic and emerging industry that is aligned with the vision and purpose of both the PGMDF as well as that of the Department of Science and Technology. Platinum’s partnership with government seeks to understand and enable the key drivers to develop a globally competitive fuel cell industry.

“At Anglo American, we believe that with platinum at its heart, a South African fuel cell industry would support the country’s drive for jobs and help to meet its energy challenges.”CynThiA CArroLL, Anglo American chief executive and chairman of Anglo American Platinum Limited

DiD you Know?

The new locomotive has a metal hydride fuel tank in which the hydrogen gets absorbed at a low pressure. The release from the metal hydride is slow (matching the consumption), and the risk is very low. Hydrogen is also, by its nature, a relatively safe gas in that it will rise very rapidly (at 22 m/second). Therefore any leaked gas is vented very quickly.

01 Platinum’s new hydrogen fuel cell-powered locomotive.

02 Seen at the launch of the fuel cell locomotive in May are Godfrey Gomwe, executive director of Anglo American South Africa Ltd, Cassel Mathale, Limpopo Premier, Susan Shabangu, Minister of Mineral Resources, Cynthia Carroll, Anglo American chief executive, Neville Nickolau, chief executive of Platinum, and Rudi Rudolph, general manager of Komanani mine.

03 Susan Shabangu at the wheel of the new locomotive.

03

38 | JULY 2012

kriel Turns operaTional Challenge inTo lifesTyle opporTuniTy

anglo american inyosi Coal’s (aaiC) kriel colliery recently handed over 20 houses to families who have been relocated to the thubelihle township outside kriel. this R11 million project follows extensive engagement with stakeholders and will see a significant improvement in the quality of life of its beneficiaries.

According to the head of AAIC Themba Masondo, residents previously lived within 500 m of the mine’s

blasting radius, and needed to be relocated to a more suitable and sustainable residential environment.

“Kriel colliery has proactively turned a challenge into an opportunity and residents now find themselves in significantly better circumstances than in the past,” he says.

Speaking at the handover ceremony, the mine’s acting general manager Luambo Musie said that Anglo American was dedicated to minimising impacts arising from its

operations. “We are committed to working with all our stakeholders, including government, the companies we do business with and our host communities, and this ceremony is a demonstration of this.”

Residents formerly lived in mud huts and basic brick structures, with no electricity, sanitation or direct water supply. Five, four, three and two-bedroom houses with running water and pre-paid electricity meters were built, and each household has been provided with start-up vouchers to assist with the transition.

“You have improved our quality of life and we are excited about this transformation.” reGinALD KuBheKA, residents’ working Group member

01 & 02 Proud new homeowners from Thubelihle township outside Kriel take residence in their new houses.

01 02

JULY 2012 | 39

leaving a lasTing, posiTive legaCy

reAl DIFFerence

Thermal Coal aims to leave a positive legacy once its mines come to the end of their lives, and is doing just this outside its closed Vryheid Coronation colliery in Kwazulu-Natal.

The colliery operated between 1916 and 1993, and reopened briefly from 1997 to early 1999. After operations ceased, more than 2,000 hectares of land previously belonging to the mine were donated to local communities.

Social investment continues, and the area’s Shongololo Combined School was recently equipped with four new classrooms while roofs, ceilings and floors in the remainder of the school’s buildings are currently being renovated. This amounts to an investment of R1.2 million.

In 2012, a second school will benefit from the introduction of a mobile science and computer laboratory, and it is anticipated that local learners showing potential may soon benefit from Thermal Coal’s bursary assistance scheme.

“As a responsible mining company, we have a duty to ensure that we create lasting benefits for the communities in which we

operate. These projects form part of this commitment, together with our ongoing effort to promote socio-economic development post mine closure,” says Thermal Coal community development manager Mokhine Makgalamele.

As part of the project, vegetable gardens in two communities have been fenced off, while a tractor belonging to the mine has been handed over to a community trust.

“We have also fenced off a cattle dip and have supplied it with a water pipeline, and are currently in the process of providing irrigation through the drilling of a borehole and erection of a windmill in Vrede,” says mine closure manager Johan van der Walt.

He explains that Thermal Coal is investigating an improved and more sustainable solution to the area’s water challenges, and is engaging with the local municipality on possible improvements to the existing drinking water scheme.

People in the area currently utilise central drinking points, while a water truck does rounds in the area.

flying The CommuniTy flag highflagship eduCaTion projeCT voTed besT CommuniTy projeCT in sa Coal seCTorGoedehoop colliery’s work in the field of education has been recognised by its peers in the South African coal mining industry, who voted it the best in the community development section of the CoalSafe Awards in March. The project was voted first out of 137 entries submitted by competing mines.

“The selection process was stringent, with judges spending time in the field to interview stakeholders associated with each entry,” says community development superintendent David Netshieneulu. “In our case, these included learners, teachers, parents and the local Department of Education.”

“At Goedehoop we are glad to invest time and money into initiatives like this one, as education is one of the keys that unlock true

potential in all people,” adds mine general manager Erik Becht.

Now in its third year, the Flagship Education Project has expanded from 11 schools in 2011 to 38 going forward. These belong to all three educational circuits in the region, and include farm schools in remote areas. The programme involves supplementary classes in technical and English-language subjects, and last year saw the average matric pass rate of participating schools rise from 53% in 2010 to 78%. In addition, 32 distinctions were achieved.

In addition to its supplementary school, Goedehoop has embarked on a series of Saturday career guidance and life skills programmes for the benefit of local learners and teachers.

“Much of this project’s success stems from the efforts of my colleagues and community development coordinators Oupa Mogane and Musa Mboshane, who have driven the day-to-day running of the programme since its inception. Their involvement goes far beyond normal working hours, and they are passionate about education.”

DAViD neTShieneuLu, community development superintendent at Goedehoop

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mafube Turns liabiliTy inTo valuable fuelJust over three years ago, mafube colliery started a project to remove an environmental liability by converting its fines into coal briquettes. thirty-six months down the track, it has achieved this and more.

Now, the colliery will eradicate the need to dispose of

millions of tonnes of discard thoughout its working

life, while also developing a sellable product line.

According to metallurgical manager Hannes

Esterhuizen, the programme – jointly financed by

co-owners Anglo American and Exxaro – is poised to

become a large-scale commercial reality.

“Coal in the form of briquettes is widely used to fuel

power stations in Europe and China, however, there are

many other industrial and domestic users of this type of

energy source,” he says.

Following intensive research, the colliery designed

and built its own plant, which was commissioned in

December 2011. Recognised as being the largest and

most technically advanced in use today, it cost in the

region of R63 million. The expected payback, however, is

impressive. Based on a conservative output of 50 tonnes

per hour and current market prices, it will have paid for

itself within 18 months.

The strength of the project lies in its sustainability.

The demand for coal as a commodity has reached new

heights, as indeed have commodity prices. Consequently

there is a vast requirement for alternative coal-based

heating products. Local commodity traders have

confirmed that Mafube’s briquettes are a highly attractive

proposition in terms of price as well as ease of handling,

packaging, storage and transportation.

“We have entered into a short-term marketing

agreement with a local commodity dealer, which is likely

to take up our entire production for the next six months,”

says Esterhuizen.

“Our customer has no shortage of ready markets for

the product, which includes domestic users and those in

the ceramics and agricultural industries. They are also

seriously examining the possibility of exporting to Asia

and the Far East and we can’t rule out the possibility of

supplying briquettes to Eskom at a later stage.”

Equally exciting is that by serving these markets,

Mafube is divesting itself of its fines liability and making

money at the same time. Latest estimates suggest that

by the time the mine is due to cease operations in 2027,

existing fines as well as contingent production stocks will

be nearly exhausted, dramatically reducing the colliery’s

post-closure liabilities.

“There is nothing unique about our

situation. every colliery has this

challenge and by converting fines

into briquettes Anglo American

and exxaro are not only removing an

environmental risk but also converting it into a viable fuel

source.”hAnneS eSTerhuizen, metallurgical manager at

Mafube colliery

01

JULY 2012 | 41

reAl DIFFerence

a rehabiliTaTion revoluTionThe rehabilitation process at New Vaal colliery has accelerated dramatically, thanks to changes in techniques that have sped up the final land restoration process by 300%.

“These gains are owing to a number of interdependent factors,” says rehabilitation and biodiversity officer Gareth Corbett. “However, the intervention really got underway when we closed out on a project to extend the effective seeding window by six months per annum.”

The seeding phase in the rehabilitation process traditionally occurs from September to November. Nevertheless, through trial and error, New Vaal developed a sustainable means to extend this period from three to nine months by seeding during the winter months.

“The silver bullet was the eradication of three costly and time-consuming processes that were previously undertaken to prepare the ground for seeding,” adds Corbett. The team decided that there had to be an easier way and found an agricultural equipment manufacturer in Holland that produces a product that performs all three functions in one single operation.

“Bought at a cost of R300,000, the machine has paid for itself 13 times over in less than a year,” he says. Soil at the colliery poses some unique challenges, as the greater part is river sand that has been broken down by mining operations. “Because of its structure, there is a danger that after the first rains a crust will form on the surface, literally asphyxiating the organisms

beneath. We have ordered a second piece of equipment that will gently turn the soil so that organic material can breathe,” Corbett explains, adding that cattle will also be put out to pasture on rehabilitated sites to stimulate natural nutrient and water cycles.

wasTe noT, wanT lessZibulo colliery has launched an innovative waste management project aimed at uplifting the quality of life of people living in the Phola community, while at the same time helping the local municipality to deliver improved services to the area.

Situated just outside Ogies, Phola township faces a number of serious challenges, including a lack of basic services and ageing infrastructure. Until recently, this included a complete absence of garbage collection and removal services owing to transport constraints within the local authority.

The rapidly growing community had no option but to discard waste at illegal dumping grounds, posing a significant health risk to residents, including mine employees.

Zibulo set about solving this problem, initiating discussions with the local municipality and other stakeholders. It first cleared more than 20 informal dumpsites, before purchasing 21 skips that have been placed at various sites across the township. The next step was to provide a sustainable solution to the municipality’s transport constraints, and involved the purchasing of two waste collection trucks at a cost of R3 million. In addition, 12 people from the community have been employed and are responsible for the collection and clearing of refuse as well as street

sweeping and grass cutting activities.“Only one truck operated in the area, and this was

out of service for long periods owing to frequent breakdowns. You have made our work much easier,” said Meleli Shongwe of the municipal manager’s office, speaking at the official launch of the programme earlier this year.

“This represents a triumph of the private and public sectors coming together for the greater good,” added executive mayor Salome Sithole. “The eMalahleni local municipality is proud to be associated with Anglo American. This is a donation towards a better, cleaner environment and a healthier community.”

Before handing over the trucks at the launch, Thermal Coal head of operations Dave Haselau outlined how in return for extracting minerals from the ground, mining companies must deliver social and economic improvements for the people in its host communities.

“Zibulo colliery is the first Anglo American Inyosi Coal project to come on stream and local people are already enjoying the fruits of its endeavours,” he said.

In the short time it has been in operation, Zibulo has invested millions into upgrading the area’s critically stressed sewerage network and has established a small enterprise development hub to alleviate poverty and boost employment creation in the area.

01 Thermal Coal’s Mafube colliery.

02 & 03 Members of the community now enjoy the dignity of employment thanks to Zibulo colliery’s waste management initiative in Phola township.

02

03

42 | JULY 2012

Founded in the United Kingdom in 2003 and in South African in 2006, the DWF aims to eradicate poverty

through health, education, community development and heritage. The foundation’s programmes include HIV, TB, orphans and vulnerable children (OVC), home-based care (HBC) and a schools programme.

The DWF’s partnership with the Eastern Cape Department of Health in the Madwaleni HIV Programme through Madwaleni District Hospital, is one of the most successful rural integrated HIV programmes in the country. The initiative tests over 1,000 people per month while aiming to expand comprehensive treatment and care for HIV/AIDS-affected adults and children in the Xhora-Madwaleni part of the Mbashe sub-district.

The programme’s HIV/AIDS Counselling and Testing (HCT) team works in widespread rural communities to reach the area’s population of approximately 125,000, which includes migrant workers who use the services periodically and attendees from outside the district boundaries. The programme provides both treatment and support for those suffering from the disease.

The wellness programme run by the DWF was determined as the key mechanism to increase the reach of the Madwaleni HIV programme. Increasing HCT is paramount to the expansion of the programme in order to provide access to those who need treatment and care and to prevent new infections.

Supported by the Chairman’s Fund, the Madwaleni HIV programme model of care was recently implemented at Zithulele Hospital situated in the neighbouring OR Tambo District. The hospital is the most recent site to have the programme implemented and is supported by a committed team from the DWF.

“The grant has enabled us to improve access to and the quality of care for people living with HIV in the Zithulele community,” says Ben Gaunt, Zithulele Hospital clinical manager. “Over the past 18 months our programme has expanded from being largely hospito-centric with a few outreach efforts to the point where patients test for HIV, engage in wellness groups and prepare for and start highly active anti-retroviral therapy (HAART), all at their local health clinic. Put simply, the support of Anglo American and the DWF makes the difference between life and death for literally thousands of people.”

through its various community programmes, the donald Woods foundation (dWf)

tackles poverty with an integrated approach to ensure sustainability – yet another

initiative supported by anglo american’s Chairman’s fund, which strives for the

sustained uplifting of underdeveloped south african communities.

fAST fACTS

• The Madwaleni HIV programme currently has over 3,000 people receiving anti-retroviral treatment (excluding those who have died, defaulted or transferred out of the programme).

• It delivers between 35 to 57 babies from HIV-positive mothers per month, all of whom receive some kind of prevention of mother to child transmission (PMTCT) treatment, the majority of whom have been started on HAART.

• The programme tested 14,000 people during 2011.

l Rising monthly figures of PMTCT.l A 100% growth in the number of children on the programme.l The teaming up of the DWF and the anti-retroviral roll-out team at Madwaleni Hospital to

support the expansion of HIV/AIDS treatment and care to clinic level.l Acceptance of Madwaleni Hospital as a training partner with Walter Sisulu University,

which will profile the programme and will bring opportunities to medical professionals.l Exceeding its goals in its major focus areas.

PrOGrAMMe hIGhlIGhTS

up wiTh CommuniTy supporT,down wiTh posiTive TesTing

JULY 2012 | 43

reAl DIFFerence

The Madwaleni HIV programme’s counselling and testing team works in widespread rural communities to reach the area’s population of approximately 125,000.

44 | JULY 2012

The Fundi team at work in Johannesburg,

Initially formed as ‘Men on the Side of the Road’ in Cape Town in 2003, the Fundi organisation’s mandate is to formalise the unemployed by providing skilled and semi-skilled workers with access to existing job networks and

opportunities that they would otherwise not have access to. It has grown considerably from assisting mainly men who had no work, since Fundi now runs programmes that are suited to both men and women, and which enable the provision of skilled labour that is reliable and trustworthy.

Its new name, which reflects its new focus, is derived from the Nguni and Swahili words meaning ‘a person of skill’ or ‘to teach’.

Today, Fundi operates in Cape Town, Johannesburg and George. It has members registered around the country and has, over the past three years, provided members with more than R25 million in wages.

To enable job placement (its main function) the organisation registers members and gets to know their skills and work ethic. New members complete an induction programme where the work model is explained. Information such as personal data, level of education, basic skills, experience and previous training is collected and verified. Fundi is a brand known for introducing reliable people with verified skills to employers.

In line with its goal to bring credibility and dignity to the casual work sector, this non-governmental organisation (NGO) offers skills training and access to job networks and employment opportunities. It also provides soft skills training (worker readiness) to strengthen members’ employability.

Anglo American’s Chairman’s Fund has provided regular funding to the MSR/Fundi initiative since 2010. “It is always good to build long-term funding relationships because it allows NGOs like Fundi to plan with increased confidence,” explains Peter Krantz, Fundi director.

“We thank Anglo American for their support and see every rand invested in our programme as a vote of confidence in our objectives, goals and – most importantly – our members.”

empowering The unemployedsince its launch nine years ago, fundi has been striving to bridge the gap between our country’s growing economy and the unemployed. today, with the support of anglo american’s Chairman’s fund, this project empowers hundreds of south africans through job creation.

fAST fACTS

• During 2011, Fundi trained 1,350 people through its employability programme.

• It worked with more than 4,500 people altogether, of whom 1,000 were placed into casual work and 65 were placed into full-time employment positions.

• It added R4.2 million in total value through the placement programme. (Value add is calculated as the difference between the wages created for members and the costs Fundi incurred in its placement programme.)

Cover: Sishen mine, part of Anglo American’s Kumba Iron Ore business.