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Message from the chief executive officer

Sustainable development is a cornerstone of the Exxaro group, embedded in our strategy and the first of our corporate values which states “empowered to grow and contribute”. To be truly effective, however, we believe empowerment must be a two-way process between Exxaro and our stakeholders.
   
During the year, as part of reviewing the structure and strategy of Exxaro, we streamlined certain divisions,
resulting in a safety and sustainable development (S&SD) division that incorporates all the elements of triple bottom line reporting: social, environmental and economic. The head of S&SD, a well-qualified and experienced senior executive, reports directly to me and to the board through a focused board sub-committee (page 66). By creating an integrated department, targets can be closely aligned with the group’s short- and long-term strategies, national priorities and expressed stakeholder needs.

In essence, our mission is to create unrivalled value for all stakeholders through our processes, thinking and passion. Breaking this down into measurable targets in the longer term means:
  • Sustainable returns to our shareholders – including our own people
  • An injury-free work environment – one where every employee has the freedom to grow and develop
  • A healthy workforce – with an appropriate balance between individual responsibility and healthy working
    conditions
  • Responsible use of our natural resources.
  • Maximising efficiencies in the current economic climate
  • Reducing the number of injuries
  • Managing our use of natural resources.
Managing a mining group in the 21st century, particularly the safety, health, environmental (SHE) and social aspects, requires an unprecedented level of statutory and non-statutory compliance. More importantly, we believe it requires a genuine desire to preserve at every level – in the skills of people, in the resources of our planet and in the prosperity of our communities. This requires a holistic view of the strategic issues that influence SHE. For Exxaro, these include:
   
  • Legislation in different territories
  • Corporate strategy:

    		•
    • Continually becoming more proactive
    • Finding the correct balance between generic policies, eg Exxaro’s I care rules, and the operational needs of each business unit
    • Commodity choices – the group risk environment where our current dominance in coal presents a high risk profile
    • Efficiency and cost management
  • International SHE issues (Namibia, Australia, China, etc)
  • Business unit strategy/needs and risk minimisation
  • Stakeholder perceptions.
    		•
     
    SHE services are statutory by nature; whatever is new or being discontinued depends on legislative changes or changes in risk profile. These, in turn, inform work volumes. Managing these volumes while meeting stakeholder needs is an ongoing challenge, and not specific to our group or industry.

    Performance
    Exxaro’s performance on the key elements of sustainable development – economic, social and environmental – during the year was mixed. On the positive side, we established a carbon footprint for the group and clarified our strategy on energy, revised our HIV/Aids strategy and initiated a major drive on water management. We also exceeded 2009 mining charter targets for employment equity at management level and for women in mining, and increased the number of registered mining learnerships by more than 60%.

    Areas where we missed our targets include our disappointing safety performance, which is being vigorously addressed (page 81). Exxaro operations without international health and safety (OHSAS 18001) and environmental standards (ISO 14001) in place are well advanced in their preparations and should achieve certification in 2009.

    We were pleasantly surprised to be judged the best newcomer – extractive industries in the 2007 Association
    of Chartered Certified Accountants (ACCA) sustainability reporting awards. Surprised, because as a new group formed from two established companies, we knew that much work was needed to standardise systems and ensure meaningful reporting. We said as much in our 2007 report. However, receiving this prestigious award has reinforced our resolve to report on sustainability issues as well as we do on financial aspects of our business. We believe today’s stakeholders deserve no less.

    In November 2008, the second annual report from South Africa’s Carbon Disclosure Project – part of a global
    initiative that tracks companies’ greenhouse gas emissions, targets and responses to climate change – was released. The local survey covers the top 100 companies on the JSE. Interestingly, in the carbon-intensive sector, Exxaro was ranked fifth against far more established companies in the metals and mining sector.

    In our quest to be a truly responsible business in all respects, Exxaro became a signatory of the United Nations Global Compact in 2007 – the world’s largest voluntary corporate citizenship initiative that outlines 10 universally accepted principles on human rights, labour, the environment and anti-corruption. This is another tangible illustration of the group’s commitment to sustainable development. Exxaro is already voluntarily working towards complying with various local and international sustainability protocols, including the Global Reporting Initiative (GRI) and the JSE’s Socially Responsible Investment (SRI) index.

    Today Exxaro is one of over 6 200 global compact signatories in 120 countries, and one of more than 1 000 organisations in nearly 60 countries using GRI guidelines. Responsible business practices are a long-term value
    proposition for Exxaro: it makes business sense for us to invest in creating a sound environment in which to operate, based on universal values, accountability and transparency. It’s also the right thing to do and we do it with passion.
     
     
     
     



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