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Sishen Mine SEAT Report 2008 Table of Contents

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Sishen Mine SEAT Report 2008 Table of Contents Sishen Mine SEAT report 2008 table of contents 1 Introduction 2 Approach 3 Structure of the report 5 2 Overview of the mine 6 Key information 7 Ownership structure 8 Mine management 9 3 Commitments and leadership 10 Responsibilities 11 Strategic business goal 12 Compliance with corporate policy requirements 12 Partnerships 14 4 Overview of neighbouring communities 16 Northern Cape demographics 17 Age and gender structure 17 Education 18 Housing 18 Health 20 5 Sishen Mine’s socio-economic impact 22 Overview 23 Key facts 23 Education and training 24 Employment opportunities 25 Employment equity 27 Procurement from HSDA suppliers 28 6 Stakeholder engagement 30 Principles and strategy 31 Stakeholder forum 31 Outcome of the SEAT engagement process 34 7 Sishen Mine’s support for socio-economic development 36 Overview 37 Education 37 Enterprise development 39 Health and wellness 40 8 Management and monitoring plan 44 Overview 45 9 Management measures 46 10 The future 52 This report presents the findings of introduction the Socio-Economic Impact Toolbox (SEAT) assessment of Kumba Iron Ore’s Sishen Mine and its impacts on communities and other stakeholders in South Africa. This report presents the findings of the introduction Socio-Economic Impact Toolbox (SEAT) assessment of Kumba Iron Ore’s Sishen Mine and its impacts on communities and other stakeholders in South Africa. The SEAT process has been developed by Anglo American plc, Kumba’s parent company, to enable mines to identify and manage the socio-economic impact of their activities on local communities, and to provide guidance on how to improve performance on key social issues. Approach The approach used for the assessment is aligned with the seven steps outlined in the SEAT report (see table below). This process introduces a proactive approach into the management of social and economic development issues in communities and the greater stakeholder spectrum. The process also ushers in widespread participation in the setting and identifying of priorities whilst simultaneously facilitating a shift of focus in decision-making from a solely company-centred approach to a more participatory and inclusive approach to involving stakeholders in mine decisions. the seven steps of the SEAT process Step Step 1 Profile the Sishen Mine Step 2 Profile the mine’s neighbouring communities and stakeholder engagement to identify key issues Step 3 Evaluate social and economic impacts Step 4 Review site management systems Step 5 Develop community development initiatives in partnership with stakeholders Step 6 Prepare a managing and monitoring plan Step 7 Reporting to key stakeholders The objective of the SEAT process is to promote and identify any shortcomings and make enhance meaningful relationships between the mine and its improvements where appropriate neighbouring communities, as well as those in the labour • to assess if the operation is in line with best sending areas. The outcome of the process will enable practice requirements on social performance, Sishen Mine to evaluate the impact of its operations on and identify examples of best practices that can immediate communities and other stakeholders and to be shared address these. • to gather and collect data for corporate social reporting on indicators that are relevant to local The objectives of the process are: conditions • to identify and prioritise the key negative social • to provide a planning tool for the management and economic impacts the mine has that must of the mine’s social and economic impacts and be addressed • to involve stakeholders in the management • to assess the effectiveness and suitability of and monitoring of impacts through ongoing existing community development initiatives engagement and consultation. and stakeholder engagement processes, .3 introduction Sishen Mine engages with a number of stakeholders as part recommended by certain legislative requirements – in of its ongoing stakeholder engagement and consultation particular South Africa’s Mining Charter. The mine programme. Some of the mine’s stakeholder engagement also engages with stakeholders to keep them abreast activities are in the form of interviews or meetings of developments that may affect them, to discuss initiated by stakeholders seeking assistance from the environmental issues and to participate in local and regional company, or by the company seeking to engage with a forums.The mine’s key stakeholders, identified as per the particular stakeholder group to gain certain insights into SEAT stakeholder identification process, are as follows. possible joint ventures, activities or projects as stakeholder identification Stakeholder category Reason for consulting them Represented by Affected Parties Neighbouring communities Stakeholders that are affected by the mine due to their close proximity to operations Dingleton, Deben, Sesheng, Kathu / Mapoteng Interested parties Community-based and Stakeholders, though not directly Local police forum, church organisa- non-governmental organisations affected, but have an interest in the tions, Gamagara Environmental Forum, (CBOs and NGOs) operations Gamagara Development Forum, Gamagara Crisis Centre, Community Wellness Forum, Gamagara Sports Council, Gamagara Youth Council Local businesses and associations Local businesses in close proximity to Dingleton Emerging Business Forum, the operation that provide services to Gamagara Chamber of Commerce, the mine Small Enterprise Development Agency (SEDA), Khula Enterprise Development Agency Authorities Provincial, local and traditional Responsible for policy making, Department of Water Affairs & Forestry authorities regulation and oversight (DWAF), Department of Minerals & Energy (DME), Department of Environ- mental Affairs & Tourism (DEAT) SEAT assessments are undertaken every three years - the next report will therefore be published in 2010. Ongoing engagement and community support will of course continue in the interim. 4. introduction Structure of the report • Section 5 discusses the mine’s socio-economic impact The report provides a summary of Sishen Mine’s • Section 6 discusses the mine’s stakeholder socio-economic activities for 2007. engagement processes and the results thereof • Section 7 describes the mine’s support for The rest of this report is structured as follows: socio-economic development within the region • Section 2 describes the mine and its operation • Sections 8 & 9 describe the social • Section 3 describes the corporate policy management systems, including monitoring requirements on the basis of which the SEAT systems and timeframes, as well as the responses process is undertaken to the issues raised by stakeholders during the • Section 4 provides an overview of the SEAT process. neighbouring communities including demographics and socio-economic issues .5 Kumba Iron Ore owns 74% of Sishen overview of Iron Ore Company, itself a subsidiary the mine of Anglo American plc, one of the world’s foremost mining companies. overview of the mine Key information Kumba Iron Ore owns 74% of Sishen Iron Ore Company (SIOC). Sishen Mine, owned by SIOC, falls within the Gamagara Local Municipality which is part of the Kgalagadi District Municipality. The mine is located just south of the town of Kathu. The mine was established in 1954, primarily providing ore for consumption at domestic steel mills. Further exploration programmes led to a significant increase in the resource base, increased production resulting in the creation of the world’s fourth largest supplier of sea-borne iron ore. Sishen Mine now exports 73% of its production. In 2007, Sishen produced 29.7Mt of final product, which is 92% of Kumba Iron Ore’s total production. The Sishen Expansion Project (SEP) will extend the mine’s life by a further ten years. The proposed Sishen South Project – a new mine south of Kathu and close to Postmas- burg – will be operated as an independent mine. geographic locations Northern Cape Sishen Mine 27°44’02”S, 23°00’69”E Sishen South Limpopo Gauteng Mpumalanga Free State Eastern Cape Western Cape Saldanha Port Operations North West KwaZulu-Natal The mine achieved an all time high output of 28.7 Mt in 2006 and 29.7 Mt in 2007 due to continuous improvement projects implemented during that period. The SEP has increased employment figures from levels greater than 7 700 in 2006 to 9 900 at the end of 2007, including 5 040 contractors. The majority of the mine’s employees come from the neighbouring settlements of Kathu, Sesheng, Mapoteng, Dingleton and also further afield from places such as Kuruman, Vryburg and Upington. Sishen Mine has a policy of employing local people, although, where necessary, expertise may be sourced from outside the Northern Cape Province. .7 overview of the mine Ownership structure Kumba Iron Ore owns 74% of Sishen Iron Ore Company which was born out the unbundling of Kumba Resources in 2006. The SIOC Community Development Trust and SIOC Employee Share Participation Scheme are initiatives designed to allow employees and local communities to own shares in Kumba Iron Ore. ownership structure Industrial Development Anglo American plc group* Minorities Corporation 13.1% 63.4% 23.5% Kumba Iron Ore* 74% Sishen Iron Ore Company (SIOC) 20% Exxaro* 3% SIOC Community Development Trust 26% BEE ownership 3% SIOC Employee Share Participation Scheme Operations Projects Sishen Mine SEP1 Thabazimbi Mine SEP2 Sishen South Rest of pipeline *Listed on the JSE 8. overview of the mine Mine management The following figure shows the 2007 management structure at the mine.
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