Sustainable Development Report 2012
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Pantone 185C 0c 91m 90y 0k 230r 13g 46b #e60d2e About this report This sustainable development report covers the 2012 Links calendar year, which coincides with Richards Bay Minerals’ Stakeholders can download copies of this and previous financial year. reports from our website: www.rbm.co.za
Richards Bay Minerals (RBM) comprises the following Rio Tinto’s “The way we work” and other policy and privately held companies: guideline documents are available online at: • Richards Bay Mining Proprietary Limited www.riotinto.com/library
• Richards Bay Titanium Proprietary Limited Readers can find an index of the International Council on • Tisand Proprietary Limited Mining and Metals’ Ten Principles on page 50.
In this report, Richards Bay Minerals, RBM, “we” and “our” Readers can find our Global Reporting Initiative content refer to all three companies collectively. Where we mention and index on pages 51, 52 and the inside back cover. Rio Tinto or Blue Horizon, we refer to Rio Tinto International Holdings Limited and Blue Horizon Investments 41 Feedback Proprietary Limited respectively. We value your feedback. If you have any comments or queries regarding this report, please contact: Our report seeks to reflect the fact that we have been operating in a sustainable manner and will continue to Communications Department do so in the future. In it we share our successes and Richards Bay Minerals challenges, and offer a candid view of our performance and Richards Bay strategy going forward. South Africa PO Box 401 Our ownership structure has changed significantly in the 3900 past year, with Rio Tinto now holding a majority stake. We Tel.: +27 35 901 3111 have also taken this opportunity to restructure our report Fax: +27 35 901 3442 slightly and improve its quality, depth and comparability. E-mail: [email protected] Minor restatements compared to last year’s report are www.rbm.co.za noted where applicable.
This report conforms to Rio Tinto’s internal standards and has been compiled according to the following international reporting guidelines: • the International Council on Mining and Metals’ Ten Principles; • the Global Reporting Initiative’s reporting standards, and specifically the Mining and Metals Sector supplement (G3.1 MMSS); and • the King Code on Corporate Governance Principles for South Africa (King III).
Our reporting will continue to evolve. We are aware of proposed new reporting guidelines and will incorporate them as they come into effect.
We believe this report represents a Global Reporting Initiative (GRI) Application Level C Report. External assurance has been sought only for those elements requiring it by law. The RBM board has approved the content of the report and is satisfied that it fairly represents RBM’s 2012 sustainability performance.
1 RICHARDS BAY MINERALS SUSTAINABLE DEVELOPMENT REPORT 2012
About this report...... IFC Social well-being...... 22
Occupational health and safety...... 23 RBM highlights and recognition...... 2 Employer of choice...... 24 Company overview...... 4 Diversity and equal opportunity...... 29 Organic growth from Day One...... 4 Communities...... 32 Ownership and structure...... 5 Product responsibility...... 34 Board of directors...... 6
Geographic location...... 7 Environmental stewardship...... 36
Essential products...... 8 Biodiversity...... 37
Market dominance...... 9 Energy and greenhouse gas (GHG)
Production process...... 10 emissions...... 39
Mining rights and life of mine...... 11 Water...... 40 Air quality and emissions...... 42 Strategic intent...... 12 Waste management...... 42 Determining our material issues...... 12 Distribution network ...... 44 Sustainability governance...... 13
Business strategy...... 14 Governance...... 46
RBM’s board of directors ...... 48 Managing director’s report ...... 16 RBM board committees ...... 48 Economic prosperity...... 18 Board-level concerns ...... 49 Financial performance...... 19
Local spend...... 19 Appendices...... 50
Broad-based black economic Appendix 1: ICMM principles index...... 50 empowerment scorecards...... 20 Appendix 2: GRI content index...... 51
Pantone 298C 65c 0m 0y 0k 35r 196g 244b #23c4f4 Sustainable development report 2012
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Pantone 425C 0c 0m 0y 70k 110r 112g 114b #6e7072
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Pantone 185C 0c 91m 90y 0k 230r 13g 46b #e60d2e 2 RBM highlights and recognition 3 RICHARDS BAY MINERALS SUSTAINABLE DEVELOPMENT REPORT 2012
A significant economic contributor, both Leading the way in skills development and locally and nationally diversity • Largest mineral sands producer and beneficiation • Progressive leadership and cultural development company in South Africa programme • Directly and indirectly, contributed R5.8 billion • Historically disadvantaged South Africans represent (or 0.83 per cent) of government revenues over the 68 per cent of the workforce past five years • Women occupy 34 per cent of management and • Major employer and largest single tax payer in 10 per cent of core mining positions KwaZulu-Natal, representing 3.5 per cent of KwaZulu- • Bursaries, study grants and apprenticeships available Natal’s gross geographic product to previously disadvantaged individuals Sought-after production capabilities and Important community investor products • Productive union and community relations and forums • Capable of producing up to 2 million tonnes of product • Spent R61.3 million on corporate social investment annually (CSI) and local economic development (LED), primarily • One of the world’s lowest-cost titanium feedstock education and health programmes producers, supplying 14 per cent of the world market • Constructed two clinics in our host communities • Supplier of 25 per cent of the world’s high-purity pig • Committed R30 million to the Bambisanani Learning iron, and the second-largest zircon producer worldwide Community Programme and science centre Ongoing investment in the business • To date invested in excess of R1 billion in • Rio Tinto share of RBM increased to 74 per cent community projects • Successfully converted all mining rights World-class environmental management • Furnace 1 rebuild completed successfully • Best-practice dune forest rehabilitation programme • Investing in technology to maintain zircon and rutile • Improved water treatment capabilities allow us to reuse quality grades water up to 21 times • High-performance Organisation Programme • Implemented real-time emissions monitoring technology implemented to optimise our logistics • Re-use of waste gas (CO) from the smelter plant as an • Zulti South pre-feasibility study well under way to energy source in the production process allows us to sustain production past 2034 reduce our GHG emissions Zero-harm safety culture Not without our fair share of challenges • A Lost time injury frequency rate (LTIFR) of 0.26, our • Global demand remains subdued, while competing second-best safety performance ever supply streams have come online close to • OHSAS 18001, ISO 14001 and ISO 9001 certified lucrative markets • Critical control monitoring plans for material risks • Mined zircon and rutile quality on the decline developed and monitored • Host community growth and unemployment rates on the increase • Still seeking suitable solutions for managing radioactive tailings 4 Company overview scale mininginZultiSouth2017. Pre-feasibility studiesand stakeholder engagementactivitiesare currently under wayinpreparation forfull- zircon peryear. 2 million tonnes ofproduct annually, includingaround 100000tonnes ofrutileand250000tonnes We currently havefourplantsrunninginZultiNorthwiththecapacitytoproduce approximately increased to1milliontonnes, whilepigiron production rose to550000tonnesperyear. year. andminingplantwere Duringthe early1990safourthfurnace added,andourtitaniaslagcapacity wereIn 1986anadditionalminingplantandfurnace added,increasing outputto750000tonnesper producing approximately 400000tonnesoftitaniaslagayear. area in1977withonedredgeRBM startedoperationsintheTisand miningplantandtwofurnaces, Organic growth from DayOne of theKwaZulu-Natalseaboard around Richards Bay. Today we are anaward-winning organisationandcontinuetominebeneficiatethemineral-richsands Founded in1976,RBMthisyearcelebratedits37thofcommercial operationsinSouthAfrica. world, tothebenefitofallourstakeholders.” most reliableandsustainableindustrialmineralssupplierinthe “ ‘Responsiblebeyondmining.’Ourmissionistobethesafest, 5 RICHARDS BAY MINERALS SUSTAINABLE DEVELOPMENT REPORT 2012
Ownership and structure Rio Tinto International Holdings Rio Tinto’s Iron and Titanium (RTIT) division is the world leader in the provision of high-quality titanium dioxide feedstock. RBM forms part of RTIT’s stable of mining and 100% 100% beneficiation operations. Richards Bay Mining Richards Bay Titanium RBM is subdivided into two entities aligned with our main Holdings Holdings operations:
• Mining activities are carried out by Richards Bay Mining 74% 74% (Pty) Limited • Smelting and beneficiation are carried out by Richards Bay Titanium (Pty) Limited Blue Shareholder structure 0.1% Horison ESPS Trust Investment In February 2012 Rio Tinto exercised an option to acquire BHP Billiton’s 37 per cent shareholding in RBM, which resulted in Rio Tinto increasing its shareholding to 24% 2% 74 per cent. However, as Rio Tinto has been managing 2% 24% RBM since 2008, the change has had minimal operational impact, only strengthening RBM’s alignment with Rio Richards Bay Mining Richards Bay Titanium Tinto’s management practices.
The remaining 26 per cent shareholding in RBM remains 99.9% unchanged. Twenty-four per cent is held by Blue Horizon, our black economic empowerment equity partner, and the remaining 2 per cent share belongs to our Employee Share Tisand Participation Trust.
Blue Horizon is a consortium consisting of lead investors 85% 100% and our four host communities. This broad-based black economic empowerment (B-BBEE) component enables us to meet the compliance targets of the government’s Mining Nozalela Zululand Charter. It increases our board’s diversity, strengthening Mineral Titanium our ability to oversee risks and identify opportunities and Sands effectively engage with our host communities. Company overview (continued)
Board of directors
JF Turgeon JR Olsen MLD Marole EM Dipico (Chairman) Represents Rio Tinto Represents Rio Tinto Represents Rio Tinto Represents Blue Horizon United Kingdom United Kingdom South Africa South Africa
JB Magwaza B Mthethwa EJ Dorward-King
Represents Blue Horizon Represents Blue Horizon Managing Director South Africa South Africa South Africa
* KC Harper is also a board member. She is based in the United Kingdom and represents Rio Tinto.
6 7 RICHARDS BAY MINERALS SUSTAINABLE DEVELOPMENT REPORT 2012
Geographic location
We operate in the uThungulu District Municipality in the adjoin commercial forestry plantations, sugar cane fields north-eastern region of South Africa’s KwaZulu-Natal and farmland as well as human habitation. The area has province, with our lease areas falling within the uMfolozi good tourism and recreation potential, with some tourism and uMhlathuze local municipalities. We have four host infrastructure already in place. A number of high-profile communities: Mbonambi, Sokhulu, Mkhwanazi and Dube. nature reserves protect the area’s rich biodiversity.
Our head office is located at our smelter facility, Our mineral lease areas include 60 kilometres of coastal 25 kilometres north of Richards Bay. dunes. When mining began in 1975 the dunes comprised about 20 per cent grasslands and 20 per cent indigenous The area’s mineral-rich coastal dunes stretch for forest, the remaining 60 per cent having already been approximately 60 kilometres along the Indian Ocean and planted with commercial forestry.
Lake Nhlabane Zulti North
RBM headquarters and smelter
Tisand
Richards Bay
Richards Bay harbour
Zulti South
To Durban South Africa Company overview (continued)
Essential products
We mine heavy metals and turn them into a number of products.
Titania slag Zircon Rutile Pig iron Titania slag is our core Zircon is used in the In its titanium metal form, Our high-purity pig iron, a product and is used production of ceramic tiles rutile is used extensively by-product of the smelting mainly in the production and sanitary ware. Refined in the aerospace industry operation, is used in the of titanium dioxide (white) into zirconia, it is used in where it is valued for production of ductile iron, pigment. We produce a wide range of advanced its lightness, strength, which is in turn used three types of titania slag heat-resistant ceramic and corrosion and heat extensively in safety-critical (chloride slag, sulphate products and in jewellery resistance. It is also automotive parts such as slag and fines) which vary and electronics. Zircon used in artificial joints brake calipers and steering in the size of their particles sand is also used in the and pacemakers and knuckles. and are tailored to different foundry industry. in advanced welding pigment manufacturing processes. processes. “Producing minerals and metals essential for modern life.”
Titanium dioxide (TiO2) pigment What is titanium dioxide used for? minerals, which RBM extracts from the mineral-rich dunes Over 90 per cent of the world’s titanium output is used in in Richards Bay. titanium dioxide pigment, which provides whiteness and These minerals are then processed to remove impurities opacity to products such as paints, paper and plastics. (see our production process diagram on page 10) and It is non-toxic and can be used in food colouring, produce a titanium dioxide-rich product called titania slag. cosmetics, toothpaste and medicine. It also absorbs The process also produces high-quality pig iron as a by- ultraviolet rays and is used in sunscreen and paint to slow product. down the sun’s weathering and fading action. RBM sells titania slag to pigment producers around How is it produced? the world. Our titania slag contains 85 per cent The production of titanium dioxide pigment starts with the titanium dioxide, while our rutile contains 94 per cent mining of a group of minerals collectively known as heavy titanium dioxide.
8 9 RICHARDS BAY MINERALS SUSTAINABLE DEVELOPMENT REPORT 2012
Market dominance
“At any one time, no fewer than 20 large ocean-going vessels are either on the high seas transporting our products to customers across the world or at anchor loading up or off.”
Thanks to Rio Tinto’s proprietary smelting technology and international marketing links, RBM is highly competitive in world markets.
We export 95 per cent of our product, yielding a world market share of about 25 per cent in titanium feedstock (titania slag and rutile), 33 per cent of the world’s zircon output and 25 per cent of the world’s high-purity pig iron.
Europe Korea Japan USA China Taiwan
South Africa Company overview (continued)
Production process
Process
RBM production efficiency analysis
December 2010 December 2011 December 2012 Mining activity Sand mined 78 107 950 75 151 547 73 004 352 MT HMC produced 3 207 245 3 218 466 2 932 536 MT Major input materials Energy 18 716 920.48 20 264 694.31 16 825 016.84 GJ Water 31 253 742.40 31 177 532.59 26 644 513.31 m3 Production output Total products 1 708 739 1 923 108 1 693 321 MT Total Titania slag 926 467 1 037 098 880 844 MT – Chloride slag 799 000 901 658 764 357 MT – Sulphate slag 98 908 106 489 91 911 MT – Fines 28 560 28 952 24 575 MT Zircon 221 987 264 076 263 673 MT Rutile 75 733 100 406 97 489 MT Pig Iron 484 551 521 527 451 316 MT Total mineral waste 1 498 506 1 295 358 1 239 215 MT
HMC = Heavy mineral concentrate MT = Metric tonnes GJ = Gigajoules
10 11 RICHARDS BAY MINERALS SUSTAINABLE DEVELOPMENT REPORT 2012
Mining rights and life of mine
RBM mineral lease areas in 2034. To sustain our slag production as Zulti North’s reserve diminishes over the next 21 years, we established Tisand 3 681.22 the Zulti South project to expand our mining operation to Zulti North 4 449.19 the Zulti South lease area. Mining of the Zulti South area is Zulti South 3 037.01 set to continue beyond 2034. Town board 28.00 Zulti South project Smelter site 227.24 Established in June 2012, the Zulti South project Servitudes 133.50 spearheads our plan to expand the mining operation to the Total 11 556.16 Zulti South lease area. Mining rights We expect that the pre-feasibility study and In February 2012 the Department of Minerals and environmental approval processes currently under way Resources confirmed, in terms of the Mineral and will be completed by June 2015 and production is set to Petroleum Resources Development Act 2002, the commence in 2017. conversion of RBM’s old order Tisand and Zulti South Rigorous engagement with our two host communities, mining rights and approved new order rights for Tisand and Dube and Mkhwanazi, resulted in a memorandum of Zululand Titanium. The mining rights came into force on understanding that covers pertinent social strategies such 9 May 2012 and will run until 8 May 2041. as skills and enterprise development, local employment, Life of mines and committee structures for transparent communication. RBM expects to complete the extraction of the high A relocation action plan is still under development by mineral content reserves of the Zulti North lease area means of a multi-stakeholder engagement process.
Estimated high mineral content (HMC) reserves (tonnes)
2013 – 2015 8 339 738 1 668
2016 – 2018 6 253 942 2 397 291
2019 – 2021 6 214 020 3 735 803
2022 – 2025 6 079 168 3 581 541
2026 – 2027 6 459 184 4 555 427
2028 – 2030 5 428 361 3 821 570
2031 – 2033 2 316 222 4 898 406
Zulti North Zulti South 12 Strategic intent role inthisprocess. androbustconcerns, stakeholderengagement,academicresearch andriskassessmentsplayacritical We continuallyreassess ourmaterialissuesaccording tochangingbusinessand stakeholders’needsand Theneedforeffective labour relations andcommunityengagement. • Theneedtomanageourenvironmental impactandrehabilitate previously minedland. • Theneedforaccurateforecasts regarding product prices,marketdemandandavailableresources in • We share withtheminingsectoringeneral,suchas: manyissuesandconcerns business andtheregion on aneconomic,environmental andsociallevel. the area wehavegainedover thislengthoftime,andtheissuesthathavepotentialtoaffect our communities for36years.Theissueswedeemmaterialhaveevolvedaccording totheunderstandingof Richards BayMineralshas beenminingintheRichards Bayarea andinteracting withthelocal Determining ourmaterialissues national, regional andlocalmedia. • departments(localand national);and municipalandgovernment • utilities,inparticularEskomand Transnet; • specialinterest groups (suchasNPOsandacademicinstitutions); • businesschambers; • serviceproviders andlocalentrepreneurs; • communitytrusts; • customers; • fourhostcommunities(Sokhulu,Mbonambi,DubeandMkhwanazi); • employeesandunions; • shareholders; • Our stakeholdersconsistof: potential risksandimpactsassociatedwiththem. engage ourmaterialstakeholders.We regularly assessthestateofourrelationships aswellthe We haveawell-established communicationandstakeholderrelations teamthatensures weproactively Stakeholder engagement order tomanagecapitaleffectively. authorities andothersaffected.” ongoing consultationwithourhostcommunities,public the mosteffectivemannerwecan.Inallcases,thisinvolves and workwithlocalcommunitiestohelptheirneedsin “We accessanduseland, rehabilitateunavoidableimpacts 13 RICHARDS BAY MINERALS SUSTAINABLE DEVELOPMENT REPORT 2012
Host community engagement Issues of material concern We have a multi-pronged engagement strategy, and We have grouped our material issues into six main themes commission socio-economic baseline, social impact and or strategic pillars which define our business strategy. heritage assessments of all mining areas. We are proud In line with the six strategic pillars we have established of our well-established manner of engaging communities specific performance measures and targets to assess our in preparation for mining, on operational issues during overall performance. mining and on post-mining planning. We also have a rigorous resettlement action plan process that involves all Issue of material concern Strategic pillar interested and affected stakeholders, with a special interest • Health and safety in the Care in those community members who will be directly affected workplace or resettled. • Employees’ health We further seek to support and strengthen traditional • Legal compliance councils’ capacity to effectively deliver on their mandate. • Cost-effective productivity Operational and The community empowerment trusts, as equity • Asset utilisation and stewardship financial delivery shareholder since the 2009 B-BBEE deal, also present • Good governance a platform for engagement and assist in the planning • Continuous improvement of Growth and and implementation of all socio-economic development processes innovation programmes. • Robust decision-making • Production process reliability We work closely and in partnership with local municipalities in the identification of local economic development (LED) • Resource optimisation projects. This is done through the integrated development • Strong employee relations People planning sessions held by the municipalities. Our five-year • High-performance culture integrated development planning (IDP) forms the basis of all • Skills acquisition, retention and our local economic development activities. development • Inspirational leadership Risk assessment • Sound environmental Environment, RBM recognises that risk is an integral and unavoidable management communities component of our business and is characterised by both • Environmental monitoring and and external threats and opportunities. We endeavour to foster a risk- management stakeholders aware corporate culture in all decision-making. • Good stakeholder relationships Our risk management processes follow Rio Tinto’s strict • Maintaining licence to operate standards. Every second year we carry out a major risk • Embedding sustainable and opportunity evaluation. This evaluation considers the development following internal and external factors: • Delivering on customer Customers and expectations markets Internal factors • Effective, fact-based marketing • Key organisational values and strategies • Efficient and effective logistics • Our current and forecast financial position • Significant operational risks • The expectations of stakeholders, including labour Sustainability governance • Critical enabling factors for success, such as our ability We maintain our business viability by actively embedding to innovate long-term concerns into our decision-making processes and business strategy. We have dedicated teams External factors overseeing stakeholder engagement, risk management, • The local and global economic outlook corporate governance, communication, human resources, • Sector-specific challenges production oversight and environmental management. • Stakeholders’ concerns • Relevant legislative and voluntary compliance standards In compliance with the new Companies Act, we • Recognised sustainability risks established a Social and Ethics committee in 2012, to oversee our sustainable development performance. The evaluation is scrutinised and updated annually, and any necessary adjustments are made to our rolling five-year In this report we cover our material business concerns and strategic plan. relevant GRI and internal performance indicators. Business strategy RBM’s strategic five-year plan details our aspirations and responses with regards to our material business concerns. We review and update our strategy annually, and are confident we are on track to meet our 2013 targets.
14 15 RICHARDS BAY MINERALS SUSTAINABLE DEVELOPMENT REPORT 2012
Maintain our status as a “Zero harm” organisation Be supplier of choice in our Our strategy is to create a safe place chosen markets of work for all our employees and Our strategy is to deliver on contractors. Two aspects are critical customer expectations through to our strategy, behavioural safety reliable supply of quality product and reducing the risk in our systems against agreed delivery schedules. and processes. Our strategy starts Collaboration with Rio Tinto with leadership development and is marketing is a key strategic driver. driven through management-worker health and safety committees.
CUSTOMERS AND CARE Be prime corporate citizen Add value through operations MARKETS and developer of choice Our strategy is to maximise Our aim is to build good working production at the right quality relationships with our host through the optimum utilisation of communities, government and RBM our assets. This requires that we ENVIRONMENT, OPERATIONAL manage the ore body responsibly external stakeholders, and SUSTAINABLE understand our impact on the COMMUNITIES AND FINANCIAL and apply leading technology DEVELOPMENT environment. Our strategy is to AND EXTERNAL DELIVERY and processes in response to FRAMEWORK develop sustainable communities STAKEHOLDERS market-driven production plans. and, as part of Rio Tinto's global Key to our strategy is tight financial commitment, we aim to achieve management of costs and a net positive impact on our working capital. Good corporate environment by closure. governance includes annual GROWTH AND PEOPLE risk assessments. INNOVATION
Grow value through industry- Be the employer of choice leading technologies Our strategy is to attract, retain and and products develop creative and innovative Our growth and innovation strategy employees. Through inspirational is aimed at building our capacity to leadership, effective employee expand operations, while doing so engagement, appropriate with increasing efficacy. We apply education and training and strong Rio Tinto’s business improvement teamwork, we will drive a culture (BI) process to evaluate projects, of performance. reduce bottlenecks and continuously improve processes. 16 Managing Director’s report safe –let’s keepitup!” employees andcontractorsforstaying end oftheday. Iwishtothankallour work in2012wenthomesafelyatthe whocameto I’m delightedeveryone priority. We hada successfulyearand “Safety remainsournumberone 17 RICHARDS BAY MINERALS SUSTAINABLE DEVELOPMENT REPORT 2012
RBM’s ownership structure changed in September 2012, water stewards and play a key role in managing demand with Rio Tinto’s shareholding increasing to 74 per cent as in both the short and long term. Water extraction from our a result of their acquisition of BHP Billiton’s 37 per cent three water sources is continuously monitored and suitable share. Rio Tinto is now the world’s largest producer of lake depth limits are in place to prevent our mining and various industrial minerals. This structural change has not smelter operation endangering the ecological balance of significantly impacted the way we operate, as Rio Tinto has Lake Nhlabane. been managing our operations since 2008. Our water usage and practices are based on sound Strained global economic conditions continued to affect the environmental research. A further independent ecological mining sector in 2012, and investors in general remained study to assess our water resources and management is cautious. Demand for raw materials, especially in the US scheduled for 2013, and its results will augment data from and Europe, fell in line with the dip in construction and past studies. vehicle manufacturing. We remained resilient however, and countered the weak European demand by growing our In September 2012 we played host to the Rio Tinto board Asian markets. of directors, giving us the opportunity to showcase both our Esibusisweni rural development centre and our post-mining We have maintained our reputation as a reliable, globally coastal dune forest rehabilitation programme. competitive producer of high-quality mineral products. Our strong financial performance has enabled us to reward our Conducted in partnership with the University of Pretoria, shareholders and benefit our host communities. the dune rehabilitation project continues to set standards worldwide and has resulted in 69 scientific publications over Maintaining our global competitiveness going forward will the last two decades. We remain committed to preserving involve addressing four key challenges: this unique and culturally significant environment through • the difficulty of attracting and retaining skilled individuals; scientific research-based practices. • the rising cost of electricity; Looking forward, we continue to work hard at maintaining • risks associated with political and social instability in both our capital assets and human resources – particularly our South Africa; and core skills – so that we are in a strong position to react quickly • the growing pressure on local water sources. to increased demand when the global economy recovers.
Our long-term success relies on having a diverse workforce The Zulti South mining pre-feasibility study will be finalised working safely at competitive productivity levels. We during the next financial year and mining there is set to begin continue to be inspired by our leadership development in 2016. Our application to convert our old order mining programme, which is the vehicle for workplace culture rights to new order rights has also been successful. Our new change at RBM and the driving force behind our strategy to rights came into force on 9 May 2012 and will remain valid develop a diverse workforce and nurture leadership potential until 8 May 2041. at all levels within the organisation. Being RBM’s Managing Director for the last two years has Safety remains our number one priority. I am delighted to been a privilege. I would like to welcome Mr Mpho Mothoa report we suffered no fatalities in the reporting period and we who will take over from me in 2013. I am confident that achieved our second-best safety performance yet. his experience as the Chief Operating Officer at Rössing Uranium in Namibia, and this 13 years with Rio Tinto, will be To tackle the challenge of our own carbon footprint and greatly valued at an already strong and resilient RBM. to address problems associated with energy supply in South Africa, we are exploring and implementing a number I thank all our employees for their hard work, our leaders of energy-saving initiatives. One of these initiatives includes for leading by example, and our stakeholders for their improving our energy efficiency by refurbishing a second valued input, advice and encouragement. Your efforts have smelter furnace, developing more economical compressed- been much appreciated. Special thanks go to our board of air management programmes and installing energy-efficient directors and executive team for their insightful leadership lighting and point-of-use power factor correction at and support and to our host communities and community other installations. leaders for helping us build a sustainable future in harmony with the local environment. RBM values good relations with its stakeholders and works hard at ensuring open and honest communication. We engage with our stakeholders extensively, especially around future plans and business strategy. As a result we remained, for the most part, unaffected by the serious unrest in the South African mining sector in the period under review. EJ Dorward-King Water is a vital resource, both for our operations and our Managing Director growing host communities. We have to be responsible Richard's Bay 18 Economic prosperity 19 RICHARDS BAY MINERALS SUSTAINABLE DEVELOPMENT REPORT 2012
RBM is the largest single tax payer and a major employer Local community spend in the KwaZulu-Natal province, representing 3.5 per cent Beyond the majority support we give to local suppliers, of KwaZulu-Natal’s gross geographic product. As such, we we also have a number of corporate social investment directly and indirectly accounted for $713 million (or 0.83%) (CSI) and local economic development (LED) projects. to government revenues over the past five years. More information about these projects can be found on Financial performance page 33.
Revenue/Cash generated from operations Community investment
2013 2012 fore- cast
2011
2012
2010
2011 2009
500 1 000 1 500 2 000 2 500 Millions US$ 2 4 6 8 10 12 14 Millions US$ Revenue Cash generated from operations CSI LED Local spend Local supplier spend We outsource non-core components of the business, such as security, IT maintenance, plumbing, overhauling, and others. This enables us to concentrate on our core business. It also creates a significant opportunity for service providers and contractors, thus impacting positively on the economy and the lives of thousands of families locally, provincially and nationally.
Overall we spent R3.6 billion on South African- based suppliers, representing 99 per cent of our total supplier spend.
Supplier spend
International: 1% Local community-based suppliers: 4%
National: 25%
KwaZulu-Natal: Richards Bay 19% area: 52% Broad-based black economic empowerment scorecards We seek meaningful transformation that empowers historically disadvantaged South Africans (HDSAs) while maintaining our ability to grow sustainably. Through our efforts we also hope to advance the social and economic welfare of host communities.
Our 2009 B-BBEE deal saw us become fully compliant with the Department of Mineral Resources’ (DMR) 26 per cent black economic empowerment (BEE) ownership target – five years before the 2014 deadline. Mining Charter For the Mining Charter Scorecard, we conducted our own assessment as follows:
Weight- Performance Targets ing 2011 2012 2012 2013 2014 Element Description (%) (%) (%) (%) (%) (%) 1 Ownership Minimum target for effective HDSA ownership 5 26 • 26 • 26 26 26 2 Procurement Procurement of capital goods 5 39 • 30 • 20 30 40 and enterprise Procurement of services 5 41 • 48 • 50 60 70 development Procurement of consumables 2 30 • 37 • 25 40 50 Multinational suppliers’ contribution to the social fund 3 • • 0.50 0.50 0.50 3 Employment Diversification of Top management 3 43 • 43 • 30 35 40 equity the workplace to Senior management 4 57 • 54 • 30 35 40 reflect the country’s Middle management 3 89 • 59 • 40 40 40 demographics to attain Junior management 1 56 • 80 • 40 40 40 competitiveness Core and critical skills 5 79 • 90 • 30 35 40 4 Human Development of requisite skills, including resource support for South African-based research development and development initiatives intended to develop solutions in exploration, mining, 25 21 • 16 • 4.0 4.5 5.0 processing, technology efficiency (energy and water use in mining), beneficiation as well as environmental conservation and rehabilitation 5 Mine Conduct ethnographic community 15 LED projects • LED projects • Implementation community consultative and collaborative processes accepted by accepted by of projects will development to delineate community needs analysis communities communities serve to enhance and munici- and munici- relationships palities, and palities, and amongst projects projects being stakeholders leading being implemented to communities implemented owing patronage to projects. 6 Sustainable Improvement of the industry’s 12 100% • 100% • Annual progress development environmental management compliant compliant achieved against and growth approved EMPs. Improvement of the industry’s mine health 12 100% • 100% • Annual progress and safety performance compliant compliant achieved against commitments in the tripartite action plan on health and safety.
20 21 RICHARDS BAY MINERALS SUSTAINABLE DEVELOPMENT REPORT 2012
This year we improved our score against employment equity and skills development. We appointed a black female in an executive position to improve our top management performance, while our Adult Education Training (AET) programme continues to expand and deliver results as part of our Social and Labour Plan.
During a recent site visit by the Mining Qualifications Authority (MQA), our AET programme received high praise and we are pleased that four learners successfully completed AET IEB level 4 in both numeracy and literacy for the first time in 2012.
Consistent performance for the procurement of services element remains challenging. To improve our performance we embarked on a supplier management initiative whereby all suppliers are required to be BEE compliant. We hope to achieve a procurement of services score of 60% (2012: 48%) in the next financial year. Broad-based black economic empowerment scorecard Our progress against the Department of Trade and Industry’s (dti) Generic B-BBEE Scorecard is presented below.
Unverified B-BBEE scorecard for 2012 Weighting Score Ownership 20 17.00 Management 10 6.75 Employment equity 15 10.32 Skills development 15 12.00 Affirmative procurement 20 16.00 Enterprise development 15 10.57 Socio-economic development 5 5.00 Broad-based BEE Score 77.64
Broad-based BEE Status Level 3
After the 2010 B-BBEE verification we realised that we had to improve our internal verification methodology. We therefore conducted transformation training and awareness sessions, as well as a BEE verification mapping process. We identified a number of gaps in our existing practices and therefore developed a data collation framework for verification purposes. NERA was subsequently appointed to externally verify our BEE credentials in 2013 for FY 2012.
Our efforts proved successful as we managed to improve our score in a number of areas. Our scorecard is now a better reflection of our progress towards transformation.
We did not seek external verification for our 2011 performance in 2012, however NERA will verify our 2012 performance in the second quarter of 2013. 22 Social well-being three years.” that wehadzerofatalitiesoverthepast ‘Zero Harm’andarepleasedtoreport “We remaincommittedtoourgoalof 23 RICHARDS BAY MINERALS SUSTAINABLE DEVELOPMENT REPORT 2012
Occupational health and safety by integrating occupational health and safety aspects into our leadership development programme and our employee Maintaining our status as a “zero-harm” organisation incentive schemes and wellness programmes. through the use of effective health and safety management systems and practices remains a key priority for RBM. Our entire workforce is represented in formal joint management-worker health and safety committees, and We believe safety is everyone’s responsibility. We therefore detailed health and safety agreements have been signed continuously reinforce our behaviour-based safety culture with union representatives.
Rates of Injury, Occupational Diseases, Lost Days, Absenteeism and Fatalities 2012 target (where 2009 2010 2011 2012 applicable) Fatalities 1 0 0 0 0 Lost time injuries 19 7 12 11 Medical treatment cases 11 18 11 8 First aid cases (minor injuries) 71 78 55 67 Occupational diseases 0 0 0 0 0 All injury frequency rate (AIFR) 0.69 0.50 0.54 0.44 0.51 Lost time injury frequency rate (LTIFR) 0.44 0.14 0.28 0.26 Occupational disease frequency rate (ODFR) 0 0 0 0 0
Safety Health This year we achieved our second-best safety record of all RBM has a well-established employee wellness time. While we are proud of our accomplishment, we still programme, and with KwaZulu-Natal suffering from high had 11 lost time injuries and 67 minor injuries – figures on HIV/Aids and tuberculosis (TB) prevalence rates, voluntary which we are determined to improve. counselling and testing (VCT) for HIV, TB and other chronic illnesses forms a major part of it. Our goal is for 90 per cent Our approach to safety is guided by the Chamber of Mines’ of employees to know their HIV status and 70 per cent “Road to Zero Harm” campaign and Rio Tinto’s internal their overall wellness status by the end of 2013. standards. We also comply with both the Occupational Health and Safety and the Mine Health and Safety Acts of To achieve this goal, wellness examinations have been South Africa. incorporated into the regular occupational health medical examinations conducted at our on-site health-care facility. We identified various risk-reduction opportunities through VCT services are also offered to all employees visiting the a wide-reaching safety risk assessment conducted facility. We hold regular VCT and wellness days to raise in 2011 and in 2012 focused on implementing these awareness and urge all employees to get tested. recommendations. We focus on a variety of preventative measures to mitigate In continuing efforts to improve our safety systems, we have the risk of employees developing health-related problems. developed several critical control monitoring plans (CCMPs), These include enforcing the use of personal protective which allow us to assess the effectiveness of the various equipment (PPE) to prevent injury and noise-induced safety control systems used throughout our operations. We hearing loss, conducting regular employee hearing tests, also improved our reporting and investigation of significant performing blood screening, offering inoculations or potential incidents (SPIs) to lower the number of near-injuries. vaccinations for Hepatitis A and Hepatitis B, and making condoms readily available throughout our facilities. To improve the efficacy of all our elected health and safety executive (HSE) members we have updated our In 2012 we identified fatigue as a significant risk to the training modules and will continue to monitor adherence safety of our employees. During the year we developed to these new guidelines via internal and external audits a fatigue management programme which includes and inspections. training and screening to minimise the impact of fatigue, especially in our transport team. We plan to implement the In 2013 we will continue to stress the importance of programme fully in 2013. HSE representatives in the workplace and expand their responsibilities to include a wider range of health and safety- related issues. Social well-being (continued)
Employer of choice Leadership development programme RBM’s leadership development programme (LDP) is a We aspire to be an employer of choice and attract, retain flagship programme that drives cultural transformation and develop creative and innovative employees. We throughout the business. Championed by senior recognise our employees as central to our organisation’s leadership, the programme’s goal is to: success and believe in providing inspirational leadership, clear direction, strong teamwork processes and a culture of • increase and sustain employee participation and performance underpinned by relevant and dynamic training engagement; programmes. • improve interpersonal and team relationships; • improve communication; We continually investigate and implement initiatives to improve employee performance, review processes and • improve safety; and structure, attract and retain talent, and align our business • increase overall productivity. function with our strategy. Established in 2009, the programme continues to deliver This year the number of employees grew by 3.25 per cent, good results. We have seen a positive change in our while the average number of hours worked per employee employee engagement as well as our safety record. decreased marginally by 2.1 per cent. External contractors provide a large proportion of our During the year we reviewed some of our key business labour requirement and this poses a significant challenge processes and structures and identified various cost-saving to our aspirations to improve the company’s culture. In and efficiency-improvement opportunities. Implementing response we have embarked on an initiative to partner these proposed changes will continue in 2013. with these companies and together develop a leadership framework in their respective organisations. In 2012 we conducted our first contractor engagement session.
24 25 RICHARDS BAY MINERALS SUSTAINABLE DEVELOPMENT REPORT 2012
Employment numbers
2009 2010 2011 2012 Number of employees (permanent and contract) 4 582 5 076 4 549 4 697 Total hours worked 8 693 593 9 938 393 8 525 923 8 618 795 Hours per employee 1 897 1 958 1 874 1 835
Leadership development programme activities
Audience Activity Achievements and future plans Senior Convene engagement forums with RBMs Established forum and held four meetings during the year. management leadership to share LDP programme One session scheduled for 2013. successes and examine its business value and potential. Employees Establish a Leadership Connexions (LC) Completed the programme and presented LC training to a training programme, based on leadership total of 400 employees in 37 sessions. development principles. The programme connects individuals across the business to improve their team-working capabilities. Conduct Team Connexion (TC) Successfully piloted the programme and held a total of sessions with our unskilled/ semi-skilled 103 sessions. This programme is set to reach a total of employees. 130 employees. We will continue the roll out of the TC to the outstanding 27 teams in 2013. Conduct regular Organisational Culture Eighty per cent of our employees participated in the 2012 Index (OCI) surveys. OCI survey. The results were shared with all employees. It highlighted some opportunities for improvement. Going forward we will address key items raised by the OCI through our talent management processes and via the LC and TC sessions. We also plan to conduct the next OCI in September 2013. Conduct one-day leadership orientation Training material finalised. sessions with all new employees. Conducted a total of 20 LDP sessions: – Six one-day sessions – Eight adapted sessions for frontline employees – Six expanded two-day sessions for Shop Stewards In 2013 we plan to conduct three one-day sessions. Hold divisional feedback sessions to Seven divisional feedback sessions completed. analyse the outcomes of the 360 degree Our General manager will review and implement remedial internal assessment of senior leadership actions based on the team assessment report. impact (SI) and LC programmes. Hold debriefs with all individuals that Held LSI debrief with 72 individuals, and 13 MI debriefs. took part in the 360 degree internal Going forward we will hold debrief sessions with the management impact (MI) and the outstanding 84 delegates. lifestyles inventory (LSI) assessments, and discuss opportunities for personal development. Contractors Conduct contractor training. This is the Programme planning completed. five-day LDP specifically aimed at RBM In 2013 we plan to convene a contractor engagement forum; contractors. conduct a needs assessment; develop tailored proposals; pilot Condense the programme and tailor the LDP with the leadership of our contractors; and role out the content to a two- to three-day course. programme to all our contractors. Social well-being (continued)
Remuneration and incentive schemes Part of our “employer of choice” strategy is to attract and retain key skills by remunerating our employees at wage levels above local industry standards. We also incentivise our employees by providing performance-linked bonuses and dividend pay-outs from the employee share participation scheme.
Production bonus pay-outs
2011 2012 Quarter Number of employees Total amount paid Number of employees Total amount paid Q1 – – 1 146 3 316 858.86 Q2 1 175 4 053 365.77 0* 0.00 Q3 1 191 4 046 265.57 0* 0.00 Q4 1 199 3 339 574.57 0* 0.00 Total 11 439 205.91 3 316 858.86
* Targets not met.
Production bonus scheme Introduced in April 2011, our production bonus scheme is linked to both individual and company-wide targets.
The scheme’s core criteria are safety, productivity, teamwork and cost management indicators, while factors such as absenteeism and unpaid leave are also factored in. Bonuses are not awarded to employees who fail to report an injury, are absent without leave or partake in industrial action.
The scheme applies to all permanent bargaining unit employees employed at the date of payment. Payments are made quarterly in arrears and are limited to 8 per cent of retirement funding income.
With more stringent targets in place this year a total of R3.3 million (2011: R11.4 million) was paid out in bonuses.
Employee share participation scheme Our employee share participation scheme (ESPS) was established in 2009. Through the scheme, permanent employees who have been with us for more than six months collectively own 2 per cent of the business and are entitled to a share of its profits.
All ESPS shares are held in a trust and dividends are paid out biannually to employees. Dividends are based on 0.67 per cent of RBM’s earnings before interest and tax (EBIT) and all employees receive the same amount.
In 2012 the scheme paid out a total of R30.4 million (2011: R14.2 million) or R15 663 (2011: R8 135) per employee.
Individuals remain beneficiaries of the scheme until the following dividend pay-out should their employment be discontinued due to death, retrenchment, disability or ill health. Where employment is terminated for other reasons (e.g. resignation, dismissal, etc.) all ESPS benefits are forfeited immediately.
Dividends* paid to employees
Number of Amount Total amount paid Year Month employees (R) (R million) 2010 April 1 646 2 366.67 3.9 2010 September 1 647 2 365.67 3.9 2011 March 1 731 4 776.97 8.3 2011 September 1 757 5 340.24 9.4 2012 March 1 804 5 968.24 10.8 2012 September 1 843 8 577.11 15.8 Total 8 671 52.0
* Dividends refer to after tax payment figures.
26 27 RICHARDS BAY MINERALS SUSTAINABLE DEVELOPMENT REPORT 2012
Training and education all age groups, a sign that we are making an investment for South Africa’s chronic shortage of critical skills continues the future. to influence our business. We have seen a significant We provide accredited training in engineering, mineral reduction in the number of professionally qualified, extraction, metallurgy and mineral processing, as well as experienced specialists and middle management Adult Basic Education and Training (ABET) Level 1 – 4 in employees. collaboration with external skills development providers. In our social and labour plan (SLP) we have identified These training programmes comply with the Skills “hard-to-fill-vacancies” and committed ourselves to provide Development Act and are fully accredited by the Mining training support and career development opportunities to Qualification Authority. all employees with the ability and desire to obtain these critical skills. Our partnership with NEPAD enables us to nominate employees with high potential to participate in the Tutu In this regard the accompanying graph shows a significant Leadership Development Programme. During the year one increase in employment of semi-skilled employees across of our managers completed the programme.
Training hours per employee
2009 2010 2011 2012 Total hours per employee 64 051 80 749 101 826 177 712
Average hours of training per level
2009 2010 2011 2012 Top management 4.5 38.6 10.4 36.1 Senior management 17.6 55.0 27.3 51.9 Professionally qualified, experienced specialists and mid- management 41.1 65.4 59.4 67.2 Skilled technical and academically qualified workers, junior management, supervisors, foremen, and superintendents 38.8 47.8 64.3 68.1 Semi-skilled and discretionary decision-making 25.3 29.4 40.6 82.3 Unskilled 32.8 42.4 51.8 75.0 Social well-being (continued)
Speak-OUT Union representation (permanent employees) Employees can use our own grievance procedure or the Rio Tinto Speak-OUT system to anonymously report any 2012 60.2% fraud, unacceptable behaviour by employees, or human 2011 62.3% rights violations. No such employee-related incidents were reported during the year. 2010 60.4%
More information on Speak-OUT is available on page 49. 2009 60.3% Union representation and labour unrest Union representation remained stable at around 60.2 per Union membership in 2012 cent (2011: 62.3 per cent) throughout the year, with 71 per cent (2011: 67 per cent) of our 1 355 unionised Solidarity: 4 employees represented by the National Union of Mineworkers. We regularly engage the National Union UASA: 209 NUM: 964 of Mineworkers, as well as the other unions, on matters related to our employees.
We are pleased to report that we continue to have positive relationships with all the represented unions and for more RBEU: 178 than two years there has been no labour unrest.
Labour unrest
Number of Reason for Year strikes Date Duration Location unrest Response 2009 1 9 July 1 day RBM head Recruitment An agreement was reached offices with NUM to ensure qualified candidates were hired as contractors 2010 1 27 August – 4 days RBM head Company An agreement was reached at 1 September offices conditions the CCMA when revised three- year offer was accepted by NUM 2011 None 2012 None
28 29 RICHARDS BAY MINERALS SUSTAINABLE DEVELOPMENT REPORT 2012
Diversity and equal opportunity Employees by age We have set out specific human resource development 2009 2010 2011 2012 targets in our social and labour plan (SLP). Notably, we Under 30 279 341 338 501 aspire to have a 40 per cent female employee complement 30 – 50 1 080 1 082 1 118 1 277 by 2013 as part our drive to increase the number of historically disadvantaged women in mining and exceed Over 50 368 406 423 560 the goals set out by the South African Mining Charter. Total 1 727 1 829 1 879 2 338
Employees by sex The proportion of employees below 30 years of age continues to rise, while the number of employees aged 2009 2010 2011 2012 between 30 and 50 has declined by 7.9 per cent over the Male 1 522 1 582 1 598 1 975 past four years. Female 205 247 281 363 Eight-five per cent (2011: 87.4 per cent) of our workforce is Total 1 727 1 829 1 879 2 338 made up of skilled and semi-skilled employees.
Although still far from achieving our 40 per cent goal (2012: People living with disabilities are proportionally under- 15.5 per cent), we have seen average growth of 1 per cent represented at RBM, without any significant movement per annum over the last four years. overall in this area. In 2011 0.2 per cent of the workforce included people living with disabilities, a reduction from Employees by race 0.3 per cent in the previous two years. 2009 2010 2011 2012 The proportion of foreign nationals working at RBM has African 1 207 1 279 1 311 1 673 remained unchanged for the last four years at 0.1 per cent Coloured 29 33 38 48 of the total workforce. Indian 148 164 172 211 White 343 353 358 406 Total 1 727 1 829 1 879 2 338
There has been no significant movement overall in our race demographics. We are on track in terms of the Mining Charter Scorecard, but with opportunities for improvement in terms of the DTI’s generic scorecard in terms of employment equity.
Employees per level*
2009 2010 2011 2012 Top management 12 11 8 6 Senior management 25 24 31 41 Professionally qualified, experienced specialists and mid- management 258 279 197 216 Skilled technical and academically qualified workers, junior management, supervisors, foremen, and superintendents 681 712 757 837 Semi-skilled and discretionary decision-making 751 803 886 1 150 Unskilled 0 0 0 0 Temporary employees 0 0 0 88 Total 1 727 1 829 1 879 2 338
* Applies only to employees on our payroll and excludes contract labour. Social well-being (continued)
30 31 RICHARDS BAY MINERALS SUSTAINABLE DEVELOPMENT REPORT 2012
Case study: Women in Mining Forum
We are challenging the notion that “women don’t work We have established a Women’s Forum, with women in mines”, with an increase in female employees from representing all levels and divisions within the company. 11.9 per cent in 2009 to 15 per cent in 2011. The Women’s Forum creates a platform for raising women’s issues within the company and the sector, for We are proud to have exceeded the Mining Charter’s target devising strategies for promoting mining as a career option of 10 per cent by 2014, but we are aware that equity, for women and providing opportunities for women in especially in this context, requires special consideration the sector. of what kind of working conditions help women excel. Further, the employee body as a whole needs to develop The first Women in Mining Workshop was held in an appreciation for the unique contribution women make in October 2011, fittingly opened by our first female our industry. managing director, Elaine Dorward-King. Social well-being (continued)
Communities RBM enjoys stable and mutually beneficial relationships with its host communities. Formal engagement is overseen by our host communities’ traditional councils, but our engagement extends further to include youth structures, job-seekers’ committees, women forums, and environmental and SMME forums. These relationships were enhanced when our host communities became “Our host community shareholders in 2009. engagement has improved Managing community concerns Resettlements over the past four decades. Resettlement is a major disruption and we work closely Our current engagement with host communities to ensure that households affected by our mining activities are not materially disadvantaged. in preparation for mining in
We follow the International Finance Corporation and Zulti South, for example, Rio Tinto resettlement guides, and all households affected is far more robust than by physical or economic displacement are eligible for compensation and resettlement assistance. Although original engagements in no resettlements took place during 2012, we upgraded preparation for mining in the houses of five households previously relocated in the Mbonambi community, Tisand area. Tisand.”
Our planned mine expansion programme in Zulti South is expected to impact both the Dube and Mkhwanazi communities. A Resettlement Action Plan conducted in 2010 to 2012 revealed that the project might affect 135 ancestral burial sites, 35 living heritage sites, 79 homesteads, and total of 586 occupiers of fields for livelihood.
32 33 RICHARDS BAY MINERALS SUSTAINABLE DEVELOPMENT REPORT 2012
Disputes to apply our resources. In doing so we have developed a RBM has a formal grievance and compensation procedure, multi-pronged approach to improve the quality of education which we communicate regularly to our communities, in our host communities. and any community member is able to submit a matter Our rural infrastructure development programme builds, for consideration. Fairness is assured through the use of renovates and upgrades schools and specialised independent structures to lodge complaints. classrooms such as science laboratories, computer Our community complaints register tracks all community rooms and libraries. During 2012 we built one new school complaints, outcomes and compensation records. We building, two science laboratories, and eight multi-purpose handled 46 complaints in 2012, of which 43 were resolved, classrooms and renovated two schools at a cost of while three were still under investigation at year-end. R5.4 million.
Community investment Beyond improving local educational facilities themselves, Our community investment is guided by Rio Tinto’s local students with the potential to excel are offered stringent community engagement standards, and our after-school tutoring to prepare them for tertiary studies, community development plans (CDPs) and activities are while our teacher development programme helps local based on independent community baseline studies and teachers improve their tutoring skills. Twenty-one heads project-specific evaluations. and managers of local schools also attained leadership development certificates. We continue to channel our community investment into education, health, agriculture, and business development programmes within our communities. Breakdown of community spend
We have also realised that we can improve the outcome Rm 2011 2012 of our internal staff-related programmes by engaging our Education 28.2 18.0 host communities, and RBM safety, HIV/Aids and skills Health and HIV/Aids 6.3 4.8 training now form part of some of our community-based Business development 1.2 3.7 programmes. Sport and recreation 1.3 1.2 Education Agriculture 1.1 5.5 We work in partnership with the KwaZulu-Natal Transport – 8.6 Department of Education, traditional councils, NGOs and schools to assess local needs and determine how best Other* 12.7 9.4 Project management 8.9 10.1 Total 59.8 61.3
* This item refers to our collective spend on accommodation and environmental and cultural heritage projects within our local communities.
Total community spend (Rm) Breakdown of community spend (Rm)
44.1 17.2 2012 61.3 Project management
45.3 14.5 Education 2011 59.8
Other* 12.5 6.0 2010 18.5
Health and HIV/Aids 18.2 70.0 2009 88.2 Transport Business development Agriculture CSI LED* Total Sports and recreation Social well-being (continued)
Health and wellness development (LED) activities. Financially we only consider Our community HIV/Aids and TB programme is now in its projects listed in our SLP as LED. From a management 14th year of operation. perspective, however, these projects are no different from our other community investment work and therefore many The awareness aspect of the programme is run by local LED projects have already been discussed elsewhere in women and empowers primary school learners to deal the report. with HIV/Aids in an informed manner. It currently runs in 13 schools, with a further 23 schools scheduled to join the Further LED projects included the construction of a road programme during the next financial year, reaching over linking Mbonambi with Richards Bay, the enrolling of 35 000 learners annually. 20 young adults in driver’s licence training, and improving the employability of 800 job-seekers through our work Our community health and wellness support programme, readiness initiative (WRI). conducted in partnership with local government and other stakeholders, now supports nine community clinics. Two Our two-year SMME training and mentorship programme new clinics were built and donated during the year, making is currently helping 11 small businesses improve their treatment for HIV/Aids, TB, and chronic and communicable business and financial performance. In addition, we help diseases more readily available to local community rural subsistence farmers with food safety standard and members. agricultural training, and host a bimonthly food market where they can sell their produce. We have built three sports fields in Zulti South and use sports tournaments as a platform for promoting active Product responsibility lifestyles and healthy diet as essential components in Product and service labelling maintaining good health. Our products are stable, non-corrosive and carry low Local economic development and rural health risks. Material safety data sheets (MSDS) for our advancement (LED and RA) products are available on request and attached to all As required by law, a formal social and labour plan (SLP) product shipments. Each MSDS provides the following has been drawn up to guide the ongoing local economic information:
Material safety data sheet information
Included Comment The sourcing of components of the product or service No Not applicable Content, particularly with regard to substances that might Yes produce an environmental or social impact Safe use of the product or service Yes Disposal of the product and environmental/social impacts Yes Other No No supplementary information needed
34 35 RICHARDS BAY MINERALS SUSTAINABLE DEVELOPMENT REPORT 2012 36 Environmental stewardship (NPI) onbiodiversity bymineclosure.” strategy throughwhich weaimtoachieve‘netpositiveimpact’ management planincorporatesamulti-stakeholder biodiversity long-term integratedviewonlandstewardship. Ourlanduse sustainable development.We conductourbusinesswitha “Respect fortheenvironmentiscentral toourapproach 37 RICHARDS BAY MINERALS SUSTAINABLE DEVELOPMENT REPORT 2012
RBM’s success depends on our sensitivity to and ability to Mine rehabilitation manage our impact. We minimise harm to the environment The need for ecological restoration of land affected by by designing, operating and closing all of our operations economic development is universally recognised. in an environmentally responsible manner. To this end we RBM’s rehabilitation programme is based on land use and incorporated Rio Tinto’s ten environmental standards into land cover prior to mining. We therefore aim to restore our environmental management plan. These relate to land one-third of the land affected by our mining operation use, biodiversity, water, mine closure, non-mineral and to indigenous vegetation typical of the region, while mineral waste, air quality and hazardous substances. commercial forestry is re-established on the remainder of the land which is then gradually returned to local host Biodiversity communities as an economic asset through a partnership RBM mines in an area that is globally recognised for its with the Department of Forestry. biodiversity, with more than 4 000 hectares of the land in The forestry component is run in conjunction with the our care lying within ten kilometres of a nature reserve and Department of Agriculture, Fisheries and Forestry (DAFF), world heritage site. and returns approximately 55 hectares in Kwambonambi and 25 hectares in Sokhulu of forested land to host The maintenance of environmental quality in areas where communities annually. An RBM-sponsored skills transfer we operate and the rehabilitation of land affected by our programme supports sustainable and continuing profitable operations are thus central to RBM’s social “licence to land use. operate” and its continuing ability to obtain access to land RBM’s rehabilitation programme is unique and kick- and resources. starts ecological processes that restore coastal dune We therefore proactively minimise the footprint of our vegetation typical of the region. Long-term independent mining activities through concurrent rehabilitation. In studies conducted by the University of Pretoria show that regenerating areas are likely to regain the biodiversity addition, we are investigating ways to protect and preserve of comparable undisturbed coastal dune forests within the area's biodiversity for future generations. Through our 70 years, whilst many forest-dwelling small mammals, birds biodiversity action plan we therefore aim to achieve net and invertebrates can already be found in rehabilitated positive impact on biodiversity by mine closure. areas as young as 17 years.
Impact on land held as at December 2012 This international best-practice rehabilitation effort showcases our long-term commitment to ecological Hectares restoration and the power of its local science partnerships. Total land holdings 11 556 Our programme has been the subject of over 30 postgraduate theses and resulted in over 35 scientific In use (current operational area) 4 141 papers in peer-reviewed journals. Our more accessible Land affected by mining and production 2012 booklet about the restoration programme continues activities 4 141 to be in demand worldwide. Rehabilitated area 2 954 RBM believes in engaging fully and frankly with its local – Indigenous coastal dune forest 996 partners and stakeholders. A May 2012 workshop shared – Commercial forestry 1 958 our biodiversity action plan procedures and achievements Land returned to host communities 244 with local stakeholders. Stakeholders’ concerns were aired and ideas regarding the eco-tourism potential of the area Balance of land not yet affected 7 415 developed. A follow-up workshop is planned for 2014.
Land disturbed and rehabilitated
Hectares 2009 2010 2011 2012 Land disturbed 138.2 131.5 156.8 172.7 Existing vegetation 105.9 110.5 112.9 144.3 Rehabilitated land redisturbed 32.3 21.0 44.0 12.6 Rehabilitated area 147.2 150.5 159.8 131.1 Cumulative operational area at year-end 746.1 739.0 772.0 809.0 Restoring indigenous coastal dune forests
Following mining, the dunes are restacked to mimic the pre-mining topographic profile; topsoil is spread and sown with a cover crop that includes indigenous grass seeds and additional seeds of the naturally occurring pioneer species, Sweet-thorn (Acacia karroo). Thereafter, shade-netting is erected and this acts as a drift fence to prevent wind erosion. Within three years A. karroo has grown to form a dense shrubland that gradually thins as the plants grow and mature to form a woodland within 10 years. By 20 years, forest tree species have begun to replace these pioneer species and undergrowth begins to develop. By 30 years many of the A. karroo trees have died and patch dynamics take over as the woodland becomes more and more like coastal dune forest.
38 39 RICHARDS BAY MINERALS SUSTAINABLE DEVELOPMENT REPORT 2012
Energy and greenhouse gas cleaned and used for preheating and drying mineral ore in other plants. Other energy efficiency measures are being (GHG) emissions implemented and include staff energy awareness initiatives. Mining and smelting require large amounts of energy. Our primary source of energy is electricity supplied Overall, we managed to improve our energy efficiency by by Eskom, which accounts for about 70% of our total 7.2 per cent per tonne of final product over the reporting period. CO2e GHG emission. This is followed by anthracite at 25 per cent, with sundry other sources making up Our greenhouse gas emissions are calculated following the balance. Eskom’s recommended conversion factor, while all other In 2012 RBM used 16.8 million GJ (2011: 22.3 million GJ) sources use conversion factors agreed upon between of energy – a reduction of about 17 per cent on 2011. RBM and Rio Tinto. The reduction resulted from Smelter furnace and Slag In 2012 RBM secured a 17 per cent reduction in CO e Plants Aero Fall Mill shutdown due to refurbishment and 2 emissions, in line with our reduced electricity usage. Our maintenance respectively. 1.82 CO2e per tonne of final product figure continues to Reducing energy consumption is an ongoing challenge. be well within RBM and Rio Tinto’s target. We furthermore Our smelter refurbishment programme continues to roll out. estimate that around 4 per cent of our emissions are either Excess carbon monoxide from the Smelter is captured, reabsorbed or off-set by rehabilitation work.
Energy efficiency (GJ/tFP) GHG emission efficiency (tCO2e/tFP)
2012 9.74 2012 1.82
2011 10.42 2011 1.92
2010 10.83 2010 2.07
2009 9.82 2009 1.88
Target efficiency: 10.85 Target efficiency: 1.97
Greenhouse gas emissions (tCO e) 2 Our approach to managing GHGs: Sources of GHG emissions
Other: 149 659.08 Energy Data management reduction system for accurate initiatives data analysis
Sustained Re- Anthracite (coal): Electricity: management 896 720.96 2 496 636.94 vegetation Climate of GHGs of mined change risk area as assessment carbon sink
Furnace rebuild to improve efficiency
The numbers above represents an annual average of data analysed over a four- year period (2009 – 2012). “Other” consists of carbide, diesel, electrodes, land cleared, paraffin and petrol. Environmental stewardship (continued)
Water We use three water sources: Lake Nhlabane, the uMfolozi River and Lake Nsese. The use of these water sources Water is a vital resource for the communities in which we is based on permitted abstraction limits, reliability, cost operate. It is also required at every stage of our operation and quality. from exploration, mining, processing, smelting and refining and drinking. Operating in an area that is classified as RBM is committed to reducing fresh water abstraction and “water scarce”, the threat posed by climate change improving both water recycling and efficiency. We have a necessitates us strategically manage water security in and stringent and coherent water supply management plan in around our operations. place to achieve these goals.
Specifically, we manage the amount of water extracted The reduction seen in our total water usage/loss and from all available fresh water sources, the quality of water fresh water extraction is largely due to the refurbishment required, surplus storm water and groundwater as well as work conducted on Furnace 1 of our smelter and the our discharge. We work closely with local stakeholders to replacement of old infrastructure during the year. Our manage our impact. increased on-site water storage capacity has improved our water recycling capabilities and thereby improved our fresh water efficiency figure.
Average fresh water consumed per tonne Fresh water withdrawn per source (m3) of final product (m3/tFP)
2012 9.10 3 271 629.00
2011 12.80 2012 11 374 345.60 1 622 263.00 2010 13.29
2009 16.52 13 128 339.00 2011 3 766 791.10
8 202 473.91
12 010 263.00 Total water consumed per operation (m3) 2010 5 234 234.90 2012 26 644 513.31 8 505 195.00
2011 31 177 532.59 10 406 067.00 2010 31 253 742.40 2009 8 863 420.00 uMfolozi River 2009 29 106 450.38 7 803 057.56 Lake Nhlabane Lake Nsese
The uMfolozi River is a preferred water source for the mining operations and it is a seasonal source hence the mining operations are also supplied from Lake Nhlabane.
Lake Nhlabane is the preferred water source for our smelting and processing operations. However, the lake is an important local ecosystem and RBM carefully alternate between water sources to maintain supply without damaging the lake’s ecology.
Lake Nsese (also known as Nseleni River or Mposa) water is supplied by Mhlathuze Water Board and serves as backup to cover shortfalls in other sources. It is also RBMs least preferred source as it is a communal source.
40 41 RICHARDS BAY MINERALS SUSTAINABLE DEVELOPMENT REPORT 2012
Reusing and recycling water Water quality monitoring and resource A significant portion of the water used in our smelting management and processing operations is recycled and reused at the RBM has approximately 75 water quality sampling mining operations. points covering all areas of its operations. Sampling is continuously monitored to maintain accuracy and Some of the process water including rainwater and run-off relevance. from our smelting and processing facilities is captured and pumped to the water treatment plant for treatment Sustainability studies for the uMfolozi River and Lake and reuse up to five times per plant. Nhlabane have been conducted. The uMfolozi River study indicated that we could safely increase extraction We capture and recycle approximately 7 million cubic during favourable conditions when the river level exceeds metres of water every year. 1.8 metres above sea level. We therefore upgraded our uMfolozi pumping station during the year to capitalise on these sporadic opportunities.
Plans for 2013 include improving our storm and process- water capturing, increasing our water treatment plant capacity, addressing the water efficiency of tails stacking Smelting and processing water reused in the operations at the mining plants and recommissioning the mining operation (m3) ageing Nhlabane study next year to inform and update our management approach. 2012 6 888 578.00
2011 7 338 392.58
2010 5 504 728.50
2009 5 695 174.82
Average water level of water sources (meters above sea level)
0.95* 2.27 2.18 1.78 3.55 3.06 2.72 2.74
uMfolozi River level Lake Nhlabane level 2012 2011 2010 2009 2012 2011 2010 2009
* During 2012 uMfolozi Lake levels were low and no pumping from this source took place. During this time RBM upgraded the pump station at the river. The main water source during this period was Lake Nhlabane. Environmental stewardship (continued)
Air quality and emissions A review of plant wide total emissions is envisaged in 2013. This review will focus on the efficiency and availability of air Accurate air quality monitoring and assessment is essential quality abatement equipment such as baghouse, scrubber for effective air quality management. and cyclone systems. The aim is to benchmark our current The main air emissions from our operations are particulates technology against the latest technology in order identify (fine and course dust). Sulphur dioxide (SO2), Nitrogen possible further improvement areas. Oxides (NO2) and volatile organic compounds (VOCs) are emitted in limited quantities. Waste management Our operation inevitably generates waste. We categorise Air quality monitoring our waste, which is subject to comprehensive recording Our approach to managing air quality emissions is and tracking, as mineral or non-mineral. We are among the governed by recommended best practice prescribed by first companies in the mining sector to have registered with Rio Tinto’s environmental standards and South Africa’s the government’s South African Waste Information System national legislation. (SAWIS) industry waste management database. Ambient air quality monitoring enables us to estimate Mineral Waste and manage potential impacts to the surrounding areas. Our main focus in recent years has been reducing the While we have a well-established established dust fall- financial and environmental cost of mineral waste and out monitoring and control programme in place, we have increasing the recovery of previously lost minerals. recognised the need to expand on our ambient air emission programme and therefore will be installing one permanent Our tailings treatment plant (TTP) extracts residual minerals and one mobile ambient air quality station in 2013. from tailings. Since the start of its operations in March 2011 the plant has treated 3.3 mega-tonnes of tailings. All Point source monitoring allows for the accurate measuring minerals separation plant (MSP) tailings now go straight of emissions generated by individual stacks. Frequent tests to the TTP, and we expect to process an estimated show that our stack emissions and air cleaning equipment 10.5 million tonnes of stockpiled historical tailings over the availability are within statutory limits. However, to improve next ten years. our monitoring, reduce our emissions and meet expected future compliance requirements, our current annual Research indicates that our Smelter clarifier waste contains isokinetic sampling will be augmented by a system capable a substantial amount of recoverable mineral product. Various of continuously monitoring emissions. options to recover this are being evaluated. We hope thereby to increase our overall extraction efficiency and eliminate the need for the current smelter waste disposal site. Ambient air emissions by type (tonnes) Our mineral waste is stockpiled in controlled areas within the mining lease.
353.61 Mineral waste radiation 2012 737.70 The mineral-rich dunes we mine contain naturally
1 206.75 occurring radioactive materials (NORM), or radio-nuclides. These naturally occurring radio-nuclides are carried through 355.37 our mining and beneficiation processes.
2011 748.58 The National Nuclear Regulator (NNR) has very strict
1 248.00 standards according to which any radioactive waste, even if it is minor, must be maintained, and strictly licenses 273.10 and monitors any mining operation that has traces of radioactivity. The NNR regulates all NORM-related 2010 602.00 activities and RBM adheres to its standards. We also 1 192.55 possess a Certificate of Registration issued by the NNR in this regard. 297.98
2009 561.00 Sulphure Dioxide (SO2)
Nitrogen Dioxide (NO2) 1 182.00 Dust (PM10)
42 43 RICHARDS BAY MINERALS SUSTAINABLE DEVELOPMENT REPORT 2012
Accordingly, the mineral waste or tailings from our mineral The increase in hazardous waste to 644.85 tonnes separation plant and roaster plant are stockpiled in a (2011: 515.3 tonnes) is attributable to increased vehicle licensed and restricted area on the Tisand lease area, also fleet and maintenance activities. known as Stockpile H. Recycling non-mineral waste These tailings, which were historically stockpiled are now Waste minimisation starts with waste segregation. Five being re-processed in Tailings Treatment Plant, which major waste streams were identified at RBM, and we have started in 2011 when we commissioned our TTP. Following initiated an in-house recycling programme. This strategy reprocessing, the reprocessed mineral tailings are has already improved operational control and helped returned to the licensed stockpile area. Alternative ways of prevent the mixing of hazardous and non-hazardous waste. managing the tailings are being investigated to mitigate the Scrap metal is currently collected and sold. To ensure impact these tailings might have post mine closure. compliance against the requirement of the NEMA: Waste Act, 59 of 2008, RBM applied for a waste licence for its Non-mineral waste salvage yard operations. The licence is expected in Q1 Non-mineral waste is divided into hazardous and non- of 2013. hazardous. Hazardous waste is handled by registered hazardous waste service providers who provide RBM with Improving our efforts towards the recycling of non-mineral certificates of safe disposal. waste will remain a primary key focus area for 2013.
Mineral tailings and non-mineral waste
2012 Type Source of tailings 2009 2010 2011 (metric tonnes) Mineral Minerals separation plant 966 535.00 654 030.56 974 553.48 907 943.33 Mineral Roaster plant 222 442.00 285 378.00 334 651.00 273 495.00 Mineral Smelter clarifier 28 347.00 27 914.00 28 846.00 24 226.00 Mineral Historical tailings (fed to TTP)* – – (415 034.47) (992 060.51) Mineral Tailings from MSP (fed to TTP)* – – (730 654.01) (916 065.16) Mineral Tailings treatment plant* – – 828 261.56 1 540 697.53 Mineral Other** 12 058.00 16 177.00 17 702.00 13 881.00 Total mineral waste 1 231 391.00 985 509.56 1 040 336.56 854 129.19
Non-mineral Highly hazardous waste *** 26.71 26.00 35.00 27.00 Non-mineral Low hazardous waste*** * 395.21+ 255.45+ 480.30 617.85 Non-mineral Non-hazardous waste*** ** 1 540.80 1 423.00 1 465.53 1 417.98 Total non-mineral waste 1 962.72 1 674.45 1 980.83 2 062.83
* The TTP (tailings treatment plant) was commissioned in March 2011, since when both stockpiled and currently arising tailings from the MSP are fed into it for further mineral extraction. ** Other mineral waste consists of baghouse dust from the roaster plant. *** Highly-hazardous waste consists of tetrabromoethane-contaminated waste, fluorescent tubes and clinic waste. *** * Low-hazardous waste consists of rubber-based waste, asbestos, paint and hydrocarbon-contaminated waste, sewerage sludge, and grease and oil drums. *** ** Non-hazardous waste includes general municipal waste and salvageable waste such as scrap metal, non-compressible waste such as wood and building rubble. + We restated the low hazardous waste values for 2009 and 2010 as the values in our 2011 report were incorrect. Environmental stewardship (continued)
Distribution network Most of our product is exported and travels the 27 kilometres to the Richards Bay harbour by rail. The combination of rail and the harbour’s multipurpose, bulk handling plant minimises the environmental impact associated with road transport and provides a cost-effective way to distribute millions of tonnes of product worldwide.
Our fully computerised 26-kilometre-long on-site conveyor belt network also has negligible environmental cost.
Radiological impact study
Measurements of external radiological dose rate at a number of random locations around operational areas and in town indicate that the external dose to members of the public exceeds 0.25 mSv.a-1 in most locations tested. Occupational dose values in the same area are all lower than 1 mSv.a-1 and the area may be classified as uncontrolled in terms of worker exposure.
A human behavioural and impact analysis revealed that humans in the vicinity of proposed deposition and RBM’s greater operational areas will not be exposed (individually or combined through ingestion and external exposure routes) to a radiological dosage that exceeds the maximum recommended dose criteria used for the assessment.
44 45 RICHARDS BAY MINERALS SUSTAINABLE DEVELOPMENT REPORT 2012 46 Governance 47 RICHARDS BAY MINERALS SUSTAINABLE DEVELOPMENT REPORT 2012
RBM board of directors Non-executive Executive Rio Tinto Blue Horizon RBM JF Turgeon (chairman) B Mthethwa EJ Dorward-King JR Olsen EM Dipico KC Harper* JB Magwaza MLD Marole
RBM board committees Audit Social and ethics Marketing Technical review Directors EJ Dorward-King (MD) EJ Dorward-King (MD) EM Dipico – JB Magwaza JB Magwaza JR Olsen (chair) JR Olsen JF Turgeon KC Harper KC Harper (chair) MLD Marole (chair)
Other members Chief financial officer Chief financial officer Didier Arseguel (Chair) Internal audit manager Internal audit manager Jared Osborne Legal and admin services Legal and admin services manager Euan Harvey manager General manager: Corporate and community relations Ward Selby Finance manager General manager: Human resource Tony Eltringham Auditor (external) General manager: Technical Martin Meyer Sibongile Mthembu Johan Jacobs (Secretary) * Ms KC Harper took over Mr CM Bateman’s responsibilities after he stepped down as RBM director and transferred elsewhere within Rio Tinto.
RBM consists of two operating companies, Richards RTIT is therefore mandated to execute RBM’s approved Bay Mining Proprietary Limited and Richards Bay budget and act upon all matters, as specified in the Titanium Proprietary Limited. The two companies’ agreement, which pertain to RBM’s ordinary course of common shareholders have appointed one board of business. RTIT has delegated certain obligations under directors to oversee both companies’ governance and the agreement to the managing director and to the chief business operations. financial officer of RBM.
RBM’s shareholders entered into an agreement on The board has applied its mind to RBM’s material 11 December 2008, which prescribes how the shareholders issues, risks and opportunities. The board’s efficacy will manage their governance responsibilities over the in mapping out a suitable strategic response and two operating companies. In terms of the agreement overseeing its implementation is evident throughout this Rio Tinto Iron and Titanium Limited (RTIT) is responsible for sustainability report. running RBM’s operations on a day-to-day basis. Governance (continued)
RBM’s board of directors the RBM board audit committee charter. RBM’s company Audit Forum supports the committee in executing its The departure of BHP Billiton as a shareholder in mandate. September 2012 necessitated a restructure of RBM’s board of directors. The four BHP Billiton directors stepped The committee consists of four directors – two appointed down, reducing RBM’s board from 12 to eight. Since by Rio Tinto, one by Blue Horizon, and RBM’s managing September four non-executive representatives from Director, plus other persons as decided by the board. Rio Tinto, three from Blue Horizon and RBM’s executive managing director now make up RBM’s board of directors. Social and ethics committee Rio Tinto is charged with appointing our chairman of the Established during the period under review, RBM’s social Board. No independent directors serve on the board. and ethics committee is responsible for overseeing RBM’s social and economic development programmes, corporate Although RBM’s board has shrunk, the business is citizenship, human rights standards, anti-corruption benefiting from greater access to Rio Tinto’s technical measures, environmental concerns, health and public expertise, support and business networks as a world safety, product stewardship, and labour and employment leader in the mining and smelting industry. The smaller practices. board has enhanced our leadership’s efficacy and focus on our material issues, risks and opportunities, and The committee meets at least twice a year and consists of strategic planning. four directors – two appointed by Rio Tinto, one by Blue Horizon, and RBM’s managing director, plus other persons The board meets on a quarterly basis and is supported as decided by the board. by a number of standing committees established to advise and assist the board in fulfilling their oversight Marketing committee responsibilities. The marketing committee meets quarterly to discuss RBM’s marketing strategy, the mandate of RBM’s RBM board committees marketing agent in relation to annual price negotiations and other material marketing decisions, and make RBM has four board committees, the latest of which is recommendations to the board. the social and ethics committee established in 2012 as required by South Africa’s Companies Act of 2008. Rio Tinto Iron and Titanium (RTIT) has been appointed marketing agent to sell RBM’s products under the terms of No changes were made to the number or structure a sales agency agreement. of the board committees as a result of the change of shareholding. The Rio Tinto directors filled all committee The committee comprises three members – two appointed vacancies caused by the departure of BHP Billiton. by Rio Tinto and one by Blue Horizon. Rio Tinto is also charged with appointing all committee chairmen, while the board elects all other committee Technical review committee members. The technical review committee discusses and exchanges ideas in relation to technical and operating issues which Audit committee may arise. The committee acts in an advisory capacity to The audit committee meets at least twice a year and the board regarding technical and operating matters. assists the board in fulfilling its oversight responsibilities with regards to RBM’s financial reporting process, The committee comprises ten members who are system of internal control, audit process, and compliance generally not members of the board of directors but have monitoring against relevant laws and regulations. The audit appropriate technical experience. The committee meets committee abides by its code of conduct as prescribed by twice a year.
48 49 RICHARDS BAY MINERALS SUSTAINABLE DEVELOPMENT REPORT 2012
Board-level concerns Regulatory compliance The Audit Forum also oversees RBM’s business Guiding policies and processes compliance programme. The forum reports to the RBM subscribes to the following Rio Tinto Standards on audit committee on any significant matters related business integrity and compliance: to compliance, risk management, internal control environment, insurance risk management and The way we work information systems. www.riotinto.com/library/3608_policies.asp RBM’s Legal and Administrative Services department Business integrity (anti-corruption) standard continually monitors RBM’s legislative and regulatory compliance.riotinto.org/anticorruption.asp environment. The department advises all business divisions Business integrity (conflicts of interest) standard on relevant new and potential regulatory amendments compliance.riotinto.org/coi.asp that might materially impact RBM. The department forms Anti-bribery due diligence standard part of RBM’s financial division, but also reports to RBM’s compliance.riotinto.org/res_agentvet.asp Audit Forum. In specialised areas, external advisers and specialists are consulted to assist with compliance The standards are communicated to the business, together concerns and the implementation of new legislation. with any guidance and support that may be necessary. RBM also offers training on the respective standard to both Speak-OUT employees and contractors. RBM vendors and contractors In line with our guiding policies, all employees and are expected to uphold the governance principles contractors have access to Rio Tinto’s confidential and prescribed by these standards. independent Speak-OUT service. Speak-OUT can be used to report any concerns, issues or ideas individuals might Risk management have. The facility is widely advertised and actively used. RBM is committed to managing risk in a proactive and Speak-OUTs are investigated internally and reported to our effective manner. This requires quality risk analysis to inform human resources general manager for action. Summary management decisions at all levels within the organisation. reports are submitted to RBM’s audit committee for review.
To support this commitment, risk analysis is applied across Speak-OUT reports typically involve safety concerns, the business following the principles set out in RBM’s Risk criminal conduct, potential efficiency improvements Standard. Our board of directors is responsible for the and community issues, along with cases of wrongful risk management process. The audit committee has laid termination, discrimination, harassment, violence and down our risk management policy and ensures ongoing substance abuse. compliance. Fraud and theft Our Audit Forum oversees compliance during the execution Our internal control committee reviews all reported of our risk management programme and monitors the instances of theft or fraud. The committee meets monthly progress made with regards to all close-out actions and reports to RBM’s Audit Forum. identified in RBM’s compliance and strategic risk registers. The forum is also charged with compiling regular high-level risk reports for the audit committee. 50 Appendices Principle 10 Principle 9 Principle 8 Principle 7 Principle 6 Principle 5 Principle 4 Principle 3 Principle 2 Principle 1 Principle Ten PrinciplesIndex indicators legallyrequired bylawareassured, externally suchasourB-BBEEScorecard. verificationformostofoursustainabilityfigures.have yettoseekexternal Currently onlythose auditstructuresWhile wehavevariousinternal inplacetoensure thatourdataisaccurate,we mining forward inasustainablematter. In thisreport westrivetoprovide aholisticandintegrated representation ofourefforts todrive reported againsteachofthetenICMMprinciples. Interested readers canuseourICMMTen PrinciplesIndexbelowtofindoutwhere inthisreport we ICMM andasasubsidiaryweare committedtoICMM’s SustainableDevelopmentFramework. development performanceintheminingandmetalsindustry. isafoundingmemberofthe RioTinto outoftheGlobalMiningInitiative,ICMMwasestablishedin2001toimproveBorn sustainable CouncilonMiningandMetals(ICMM) International APPENDIX 1:ICMMPrinciplesIndex reporting arrangementswithourstakeholders. communication andindependentlyverified Implement effective andtransparent engagement, operate. development ofthecommunitiesinwhichwe Contribute tothesocial,economicandinstitutional products. design, use,reuse, recycling anddisposalofour Facilitate andencourageresponsible product integrated approaches to landuseplanning. Contribute toconservationofbiodiversityand performance. Seek continualimprovement ofourenvironmental safety performance. Seek continualimprovement ofourhealthand valid dataandsoundscience. Implement riskmanagementstrategiesbasedon activities. employees andotherswhoare affected byour cultures, customsandvalues indealingswith Uphold fundamentalhumanrightsandrespect within thecorporatedecision-makingprocess. Integrate sustainabledevelopmentconsiderations and soundsystemsofcorporategovernance. Implement andmaintainethicalbusinesspractices Description About thisreport Economic prosperity Environmental stewardship Social well-being, Environmental stewardship Environmental stewardship Social well-being Strategic intent Governance Social well-being, Strategic intent Governance answer Page reference/direct 51 RICHARDS BAY MINERALS SUSTAINABLE DEVELOPMENT REPORT 2012
APPENDIX 2: GRI CONTENT INDEX Global reporting initiative (GRI) We continue to follow the GRI G3.1 guidelines, and more specifically the Mining and Metals Sector Supplement (MMSS), in preparing this sustainable development report. Our GRI Content Index below will direct readers to the applicable sections where we reported on the various GRI indicators.
Our GRI content index Profile Disclosure Description Page reference/direct answer STANDARD DISCLOSURES PART I: Profile Disclosures 1. Strategy and Analysis 1.1 Statement from the most senior decision-maker of the organisation. MD’s report 2. Organisational Profile 2.1 Name of the organisation. Front cover 2.2 Primary brands, products and/or services. Company overview – Essential products 2.3 Operational structure of the organisation, including main divisions, operating Company overview – Ownership and companies, subsidiaries, and joint ventures. structure 2.4 Location of organisation’s headquarters. Company overview – Geographic location 2.5 Number of countries where the organisation operates, and names of countries Company overview – Geographic location with either major operations or that are specifically relevant to the sustainability issues covered in the report. 2.6 Nature of ownership and legal form. Company overview – Ownership and structure 2.7 Markets served (including geographic breakdown, sectors served and types of Company overview – Market dominance customers/beneficiaries). 2.8 Scale of the reporting organisation. RBM Highlights and recognition, Company overview, Social well-being – Employer of choice 2.9 Significant changes during the reporting period regarding size, structure or About this report, MD’s report ownership. 2.10 Awards received in the reporting period. RBM Highlights and recognition 3. Report Parameters 3.1 Reporting period (e.g. fiscal/calendar year) for information provided. Calendar year 3.2 Date of most recent previous report (if any). 2011 3.3 Reporting cycle (annual, biennial, etc.) Annual 3.4 Contact point for questions. About this report 3.5 Process for defining report content. About this report 3.6 Boundary of the report (e.g. countries, divisions, subsidiaries, leased facilities, About this report joint ventures, suppliers). See GRI Boundary Protocol for further guidance. 3.7 State any specific limitations on the scope or boundary of the report (see About this report completeness principle for explanation of scope). 3.8 Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced About this report operations and other entities that can significantly affect comparability from period to period and/or between organisations. 3.10 Explanation of the effect of any restatements of information provided in earlier Minor restatement noted and explained reports, and the reasons for such restatement. where applicable 3.11 Significant changes from previous reporting periods in the scope, boundary, or No such changes we made measurement methods applied in the report. 3.12 Table identifying the location of the Standard Disclosures in the report. GRI index Profile Disclosure Description Page reference/direct answer 4. Governance, Commitments and Engagement 4.1 Governance structure of the organisation, including committees under the highest Governance report governance body responsible for specific tasks, such as setting strategy or organisational oversight. 4.2 Indicate whether the chair of the highest governance body is also an executive Governance report officer. 4.3 For organisations that have a unitary board structure, state the number and Company overview – Board of directors, gender of members of the highest governance body that are independent and/or Governance non-executive members. 4.4 Mechanisms for shareholders and employees to provide recommendations or Our board of directors consists of direction to the highest governance body. Rio Tinto and other shareholder representatives. Employees report via management and various committees supporting the executive team 4.14 List of stakeholder groups engaged by the organisation. Strategic intent – Stakeholder engagement 4.15 Basis for identification and selection of stakeholders with whom to engage. Not reported STANDARD DISCLOSURES PART III: Performance Indicators Economic Economic performance EC2 Financial implications and other risks and opportunities for the organisation’s Strategic intent, Environmental activities due to climate change. stewardship EC4 Significant financial assistance received from government. We did not receive any financial assistance Market presence EC6 Policy, practices and proportion of spending on locally-based suppliers at Economic prosperity – Local supplier significant locations of operation. spend EC7 Procedures for local hiring and proportion of senior management and workforce Economic prosperity – Broad-based hired from the local community at significant locations of operation. economic empowerment scorecards Indirect economic impacts EC8 Development and impact of infrastructure investments and services provided Social well-being – Communities primarily for public benefit through commercial, in-kind or pro bono engagement. EC9 Understanding and describing significant indirect economic impacts, including the Economic prosperity extent of impacts. Environmental Materials EN1 Materials used by weight or volume. Company overview – Production process EN2 Percentage of materials used that are recycled input materials. Environmental stewardship – Water Energy EN3 Direct energy consumption by primary energy source. Environmental stewardship – Energy and greenhouse gas emissions EN4 Indirect energy consumption by primary source. Environmental stewardship – Energy and greenhouse gas emissions EN7 Initiatives to reduce indirect energy consumption and reductions achieved. Environmental stewardship – Energy and greenhouse gas emissions Water EN8 Total water withdrawal by source. Environmental stewardship – Water EN9 Water sources significantly affected by withdrawal of water. Environmental stewardship – Water EN10 Percentage and total volume of water recycled and reused. Environmental stewardship – Water Biodiversity EN11 Location and size of land owned, leased, managed, in or adjacent to, protected Environmental stewardship – Biodiversity areas and areas of high biodiversity value outside protected areas. EN12 Description of significant impacts of activities, products, and services on Environmental stewardship – Biodiversity biodiversity in protected areas and areas of high biodiversity value outside protected areas.
52 Profile Disclosure Description Page reference/direct answer MM1 Amount of land (owned or leased, and managed for production activities or Environmental stewardship – Biodiversity extractive use) disturbed or rehabilitated. EN13 Habitats protected or restored. Environmental stewardship – Biodiversity EN14 Strategies, current actions, and future plans for managing impacts on biodiversity. Environmental stewardship – Biodiversity Emissions, effluents and waste EN16 Total direct and indirect greenhouse gas emissions by weight. Environmental stewardship – Energy and greenhouse gas emissions EN17 Other relevant indirect greenhouse gas emissions by weight. Environmental stewardship – Energy and greenhouse gas emissions EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved. Environmental stewardship – Energy and greenhouse gas emissions EN20 NOx, SOx, and other significant air emissions by type and weight. Environmental stewardship – Air quality and emissions EN22 Total weight of waste by type and disposal method. Environmental stewardship – Waste management MM3 Total amounts of overburden, rock, tailings and sludges and their associated Company overview – Production process, risks. Environmental stewardship – Waste management Social: Labour Practices and Decent Work Employment LA1 Total workforce by employment type, employment contract and region, broken Social well-being – Diversity and equal down by gender. opportunity Labour/management relations LA4 Percentage of employees covered by collective bargaining agreements. Social well-being – Employer of choice MM4 Number of strikes and lockouts exceeding one week’s duration, by country. Social well-being – Employer of choice Occupational health and safety LA6 Percentage of total workforce represented in formal joint management-worker Social well-being – Occupational health health and safety committees that help monitor and advise on occupational and safety health and safety programmes. LA7 Rates of injury, occupational diseases, lost days, and absenteeism, and number Social well-being – Occupational health of work-related fatalities by region and by gender. and safety Training and education LA10 Average hours of training per year per employee by gender and by employee Social well-being – Training and education category. Social: Society Local Communities MM6 Number and description of significant disputes relating to land use, customary Social well-being – Communities rights of local communities and indigenous peoples. MM7 The extent to which grievance mechanisms were used to resolve disputes relating Social well-being – Communities to land use, customary rights of local communities and indigenous peoples, and the outcomes. SO9 Operations with significant potential or actual negative impacts on local Social well-being – Communities communities. SO10 Prevention and mitigation measures implemented in operations with significant Social well-being – Communities potential or actual negative impacts on local communities. Resettlement MM9 Sites where resettlements took place, the number of households resettled in each Social well-being – Communities and how their livelihoods were affected in the process. Social: Product responsibility Product and service labelling PR3 Type of product and service information required by procedures, and percentage Social well-being – Product responsibility of significant products and services subject to such information requirements.
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