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Environment

Disclosure on management approach
Exxaro’s core focus is on conserving natural resources and reducing the burden of pollutants on the environment by:

Minimising the use of natural resources
Complying with all statutory environmental requirements as a minimum and actively participating in all non-statutory environmental compliance requirements such as the Carbon Disclosure Project and its new water disclosure initiative, among others. Our aim is to exceed statutory compliance
Developing innovative policies and programmes for addressing environmental impacts and use of natural resources.

All Exxaro’s South African operations have environmental management programmes (EMPs) as required under the Mineral and Petroleum Resources Development Act (MPRDA) and the National Environmental Management Act (NEMA). While a record number of integrated water use licences were approved in the review period, the Department of Water Affairs directed the Arnot Mooifontein open-cast operation to cease using a haul road constructed over a water course. The Department of Mineral Resources directed North Block Complex’s Glisa operation to update and submit its EMPR. Both directives have been fully complied with. North Block Complex’s EMP is being updated to align all activities with environmental management plan reporting requirements, while the EMP amendment to Arnot’s Mooifontein operation is being considered by the authorities. All EMPs are key indicators in ensuring that Exxaro remains a sustainable business. Exxaro also adopts the precautionary principle entrenched in NEMA in evaluating all the environmental impacts of business opportunities.

To enhance implementation of these legal requirements and the sustainable use of natural resources, group standards for air quality management, water management, biodiversity management, rehabilitation and mine closure management, and incident management were implemented in 2010.

A strategic review of key environmental risks from Exxaro’s mining activities in 2009 highlighted:

Air quality management, water quality management, water security and surface disturbance
Cost of, and provision for, environmental liabilities
Lead time for securing environmental authorisations
Increasing statutory and non-statutory environmental requirements.

Exxaro believes conservation is becoming increasingly important, given the enormous value of biodiversity and tourism to the South African economy. Accordingly, Exxaro intends to be a mining company that leads by example in protecting, enhancing and conserving the country’s biodiversity and demonstrating that mining activities can co-exist with world-class biodiversity conservation initiatives. That way, we ensure the right of future generations to a healthy, complete and rich environment.

Under this policy, various conservation measures are being implemented that underscore Exxaro’s commitment to entrench duty-of-care principles.

Exxaro’s green timeline

2011	Continue to develop cleaner energy initiatives encompassing a combination of co-generation, carbon credit trading, renewable energy, coal-bed methane development and coal base load projects.
2010	Exxaro participated in the inaugural CDP water project Record number of integrated water use licences approved Major water management programme introduced Sophisticated fume-extraction system installed at Namakwa Sands, with noticeable reduction of visible fumes Final feasibility study under way on using furnace offgas to co-generate electricity Developing renewable energy projects Exxaro pays R912 million for electricity Group budget for energy and carbon management programme is R9 million - programme broadened to focus on climate change and associated risks Exxaro involved in industry engagement on future policies.
2009	Exxaro pays over R600 million for electricity Energy and carbon strategy framework approved Exxaro participates in SA Research Centre for Carbon Capture and Storage with local and international partners Exxaro score in CDP leadership index improves 9 percentage points Comprehensive response developed to energy, carbon and climate change management to enable and achieve the group’s vision.
2008	South Africa realises the extent of its energy crisis Energy efficiency forum established, champions at each business unit Exxaro places fifth in South Africa’s CDP leadership index chapter for the energy-intensive sector Exxaro sponsors Unisa Chair in Business and Climate Change for three years Exxaro spends R460 million on electricity.
2007	Carbon emissions reported for the first time (1,9 million tonnes of CO₂e) Exxaro spends R358 million on electricity.
2006	Electricity highlighted as a major cost to the group Exxaro adopts Energy Efficiency Accord.

Feature case study - Grootegeluk expansion illustrates Exxaro’s approach to environmental impact

The energy-efficiency goals set by the Department of Mineral Resources were analysed and incorporated into the housing plans. One of the key points to consider was that, wherever possible, the efficient use of renewable energy (such as solar water heating, solar architecture, and energy-efficient appliances) had to be used. The houses were carefully planned with the following features:

Units face north-east, between trees for better temperature regulation and efficient lighting
Houses have insulation for better temperature regulation to save on energy costs
Grey-water recycling - recycled water used for toilets, gardens and washing cars, etc
House built with overhanging roofs to capture rainwater that can be used for cooking, washing and gardening
Solar systems to heat water, save electricity and reduce greenhouse emissions.

Green housing
The purpose of the project was to build eco-friendly houses that did not rely on electricity supplies as their main sources of energy, guided by the following objectives:

Construct 797 housing/flat units of mixed architectural design, combining eco-friendly, renewable energy and ordinary building techniques to satisfy Exxaro’s housing needs.
Create a specific mix of housing types and location to ensure affordability across the range of income groups in the group.
Complete the project within the time, cost and quality constraints determined by Exxaro.
Ensure housing units meet the energy-efficiency goals set by the Department of Mineral Resources. These goals include energy savings for buildings.
Housing units should comply to all relevant legislation.
Endeavour to use local resources to promote economic growth and skills development: 50-70% local labour to be trained in key construction skills by the end of the project.
The project was governed by Exxaro’s BEE policies: contract awards had to comply with strict broad-based black economic empowerment codes.

Prior to embarking on the Lephalale housing project, Exxaro piloted five eco-friendly houses in nearby Marapong. Sustainability aspects addressed included piloting environmentally friendly building materials and appliances, such as eco-friendly bricks, zinc-fuel battery systems to power lights and small electrical appliances, to prove their cost-effectiveness for future Exxaro housing projects and the provincial housing department.

In addition, to meet housing demand in the area, Exxaro initiated the Lephalale Development Forum in conjunction with Eskom, Sasol, all levels of government and local stakeholders. The forum concentrates on infrastructure, housing, education, health and welfare services, sport and recreation facilities.

A compliance certificate was submitted with building plans for approval from the Lephalale Municipality.

This project cuts across all sustainable development areas. In the social arena, it offers mixed and affordable housing types; environmentally there is reduced requirement for energy and water; while economically it has provided skills training and small enterprise development.

In maximising the impact of a R590 million budget, the project also provided a number of benefits to the community and Exxaro employees:

In Marapong, 24 direct jobs were created in constructing the eco-friendly houses and there were 101 indirect beneficiaries
In Lephalale, 1 124 employees were housed in mixed-use houses and flats
Green alternatives were incorporated in building these houses and flats. Energy savings are estimated at 2 334MWh per annum, at 2 400 tonnes CO₂e
Of 1 023 contractors, 50% were from the local community (many of whom first had to complete artisan training offered by Exxaro and the European Union to build the required base of skills)
The project has constructed infrastructure for Lephalale Municipality to support the housing units - including roads, water recycling systems
In Grootegeluk, 41 people were trained and mentored in-house on road construction and brick-making
Entrepreneurial training has been offered by Exxaro to those showing interest
Exxaro has funded an upgrade of the water reticulation and sewerage system in Grootegeluk
There has been a significant improvement in infrastructure at Lephalale which will contribute to its maintenance and growth
The community is more environmentally responsible.

2011

2012

2012 - 2015

1	Develop and implement air quality management plans - Inyanda, KZN Sands and Zincor
2	EIA-EMP amendments (14)
3	Eight site-closure reviews
4	Ferroland divestment (Gravelotte and Hlobane)
5	Approval of closure EMPR for Hlobane
6	Develop and implement integrated water-use licence (Glen Douglas, Tshikondeni opencast and Eerstelingsfontein project)
7	Assurance preparedness - all findings
8	Biodiversity action plans

Review priorities

1	Review performance on air-quality management plans for Grootegeluk, New Clydesdale, Matla
2	Review performance on integrated water-use licence for Namakwa Sands, Arnot, North Block Complex, Glisa, Grootegeluk and selected projects
3	EIA-EMP amendments
4	Ferroland divestment from Hlobane and Gravelotte
5	Biodiversity action plans - Arnot-Matla, North Block
6	Complex, Grootegeluk, KZN Sands, Namakwa Sands, Rosh Pinah
7	Roll out of recommendations from the water business study
8	Implementation of closure activities at Northfields and KZN Sands according to plan
9	Transfer of Glen Douglas environmental provisions to new owners Afrimat
10	Approval of closure EMPRs for Durnacol and Hlobane

Review priorities

1	Exxaro-wide strategic environmental risk assessment
2	Water business case implementation
3	Review implementation of closure activities at mines in closure
4	Environmental liability management process (EERF, Arnot-Matla)

Most of these have at least a 12-month cycle

Key: EIA - environmental impact assessment; EMP - environmental management plan; EMPR - environmental management plan report; EERF - Exxaro environmental rehabilitation fund

Highlights

Water management programme introduced, supported by revised policy and management standard
Group standards implemented for air quality management, biodiversity management, rehabilitation and mine closure management, and incident management
Exxaro in top three mining companies on carbon disclosure standards in South Africa and participated in the first water-disclosure initiative issued by global body, Carbon Disclosure Project (CDP).
Record integrated water use licences approved

New water management programme

Water management is a material issue for Exxaro. During the year a water management programme was finalised, drawing on internal and external expertise, and funds approved for implementation. The programme is based on a wide-ranging group water management policy and standard, and includes Exxaro’s waste management activities through integrated water and waste management plans being developed for each business unit that encompass:

Quantitative impact assessment and prediction of future impacts (pollution sources and receiving environment)
Water supply
Water resource conservation and/or reuse and reclamation
Storm water management
Process water management
Water treatment
Pollution control dams
Groundwater management
Waste management (domestic waste and industrial residues)
Water and salt balances
Monitoring and auditing systems.

The aim of this comprehensive programme is to achieve responsible and sustainable water management use across Exxaro. The programme will concentrate on relevant water-risk issues - from security of supply and water efficiency to water-cost management - and manage these to ensure current and future anticipated regulatory compliance. Exxaro also plans to create awareness of water issues through communication and training, and wider competency in water-management issues through research and skills development. Initial areas of focus include reporting and assurance, measurements and data, technology solutions and management principles.

Material issue - Water use
For any company to truly understand its water use, and the impact of its activities on water, measurements and data on quality, quantity and cost are essential. Exxaro’s data on the first two factors is relatively well established, and processes are being strengthened to ensure that cost is a standardised reporting indicator across our business units.

Exxaro is investing in systems to more accurately measure water withdrawal by source at each operation. This will in turn provide a better understanding of our broader impact (water withdrawal, reduced access to water, loss of natural water resources, reduced agricultural activity) and our specific environmental impact (withdrawal impact on source, potential lowering of water table, reduced flow, draining of wetlands, downstream activities).

The group is also enhancing systems to measure total water discharge by quality and destination. This will enable us to address specific impacts of water discharge on the receiving environment, as well as other environmental issues around quality and quantity (including total dehydration of source, loss of wetlands and associated fauna and flora, degradation of the quality of the resource due to pollution).

To determine the level of reporting maturity on these factors across our operations, site visits began with Grootegeluk, Exxaro’s largest operation.

Reportable data types

A steering committee of subject-matter experts, environmentalists and members of senior management reports to the Exxaro executive committee and board sub-committee for safety and sustainable development. The programme is supported by a stakeholder engagement and communications process that will be rolled out in 2011.

One of the early successes of the programme was Exxaro’s recent submission to the first CDP Water Disclosure, a voluntary but detailed submission on water-related data that will provide valuable insight into the water strategies of many of the largest companies in the world.

Water licensing

Most of Exxaro’s operations have their water use authorised under the old water act. However, all operations have since had their integrated water-use licences (or IWULs) submitted to the appropriate authorities for consideration and approval. Tshikondeni mine and mine pit expansion was the first Exxaro operation to receive an integrated water-use licence - the culmination of detailed consultation with authorities. Licences have since been approved for:

Grootegeluk mine
Grootegeluk mine: Medupi expansion project (GMEP)
Char plant
Matla mine
Matla mine river diversion project
North Block Complex (Eerstelingsfontein)
New Clydesdale Colliery
KZN Sands (Fairbreeze)
Zincor (NRDF)
Inyanda

While Exxaro already reports on water issues against relevant GRI indicators as well as UN Global Compact principles, and the ICMM sustainable development framework, standardised processes will enhance data from the new financial year.

During the year, some environmental groups raised issues with the JSE and in the media about mining companies’ compliance with environmental standards, and particularly about whether JSE standards for membership of the Socially Responsible Investment index needed to be raised. Exxaro was among the companies singled out for attention, citing the alleged lack of water licences at specific operations and allegedly unauthorised mining operations at another. Exxaro was able to prove to the JSE that the required water licences had been issued, and that no unauthorised mining activities were being undertaken at Arnot’s Mooifontein section. In addition, Exxaro was able to prove that an innovative solution was being implemented at Matla to preserve and minimise mining impacts of the wetland (right).

Exxaro has a proven record of environmental conservation and management, as illustrated in case studies in this report.

Case study - Limiting wetland damage at Matla
Exxaro’s planned expansion of underground operations at Matla coal mine in Mpumalanga will enable the group to increase capacity and supply the Eskom power station while preserving the ecologically sensitive and valuable wetland systems on the province’s Highveld.

This unique wetland project combines an adaptation of the mining model with a 14km diversion of the Rietspruit River, a tributary of the Olifants River which in turn is a major water source for several mines in the area, including Exxaro’s Inyanda mine and New Clydesdale mine.

As a result of the controlled impacts of mining and controlled water use, the flow and functioning of the Rietspruit ecosystem has been maintained and its biodiversity protected. We believe this is a good example of mining innovation and nature working together: at Matla, we are going below the wetland using undermining, a technique typically used when a mine extends under a building, roadway or town.

To date, Exxaro has spent R31 million on constructing the river diversion and another R1 million on monitoring biodiversity in the wetland project. Monitoring will continue until 2017 when mining ends at Matla. However we will continue to monitor the performance of the wetland for a further three years after mining has ceased to record post-mining conditions. Should results be positive after this period, monitoring will be stopped.

Water efficiency projects


Business unit		Description
Grootegeluk		In pit storage of stormwater run-off for plant utilisation (after pH neutralisation plant to avoid corrosion) Dewatering of the Basalt aquifer and re-use as process water The Basalt aquifer is fed mainly by seepage from the unlined pollution control dams, stockpile areas and slimes facility Water recovery from the slimes disposal facility is re-used as process water The beneficiation plant at Grootegeluk mine expansion for Medupi (GMEP) has been designed to be zero-effluent in terms of water
Matla		Excess water from underground is being considered for distribution to Eskom as process water
Arnot		No formal water reclamation used in plant plan in place
Leeuwpan		Water recovery from the slimes disposal facility Storm water run-off recycled and re-used via the process water dams
Inyanda		Water reclamation from the slimes facility is used as process water Stormwater run-off from the plant area is captured and returned to the plant for re-use Pit water from groundwater flow and run-off is pumped back to the dirty-water facilities for re-use
Tshikondeni		Slimes disposal with percolated water recovery for re-use in the plant area Stormwater run-off at the plant area is recycled back as process water Pit stormwater run-off is used for dust suppression
North Block Complex		Excess water from pit and stormwater run-off is collected in pollution control dams for dust suppression
Zincor		Rainwater collection from roofs is used to augment process water Borehole abstraction used to draw back pollution plume and augment process water
Glen Douglas		Stormwater run-off into opencast areas used as process water in the plant area
KZN Sands		Reclamation of rainwater to augment water from Umgeni Water Seepage and run-off at CPC is collected and used as process water
Namakwa Sands		Seawater is used as process water Process water is recycled from the disposal facilities and re-used in the plant

Projects are now being tracked through the water steering committee

Total water withdrawal by source

Given the growing demand for water and scarcity of this natural resource in an arid South Africa, Exxaro is concentrating on optimising its water use by reusing and reclaiming contaminated water to the fullest possible extent. In doing so, Exxaro can minimise raw-water abstraction.

It is a permit condition for water use licences to be audited; these audits will be coordinated through the new water management programme. As part of this process, Exxaro will regularly update its operational water balances and develop system changes to minimise consumption of raw water while preventing losses from the water reticulation system.

Water withdrawal by source


	North Block Complex	Tshikondeni	Glen Douglas	Rosh Pinah	Zincor	KZN Sands	Namakwa Sands
Source	Municipal, boreholes	Unwa Dam, boreholes	Municipal	NAM-Water	Municipal, boreholes, rainwater harvest	Municipal (Waterboard - River abstraction)	Olifants River (Western Cape seawater); Municipal (Smelter)
Major climatic region	Temperate Highveld region	Tropical summer rainfall area	Temperate Highveld region	Desert	Temperate Highveld region	Sub-tropical east coast region	Arid region

	Arnot	Glisa	Grootegeluk	Inyanda	Leeuwpan	Matla	New Clydesdale
Source	Eskom	Municipal, boreholes	Mokolo Dam, boreholes, pit water	Olifants River (Mpumalanga), boreholes	Boreholes	Eskom	Olifants River (Mpumalanga)
Major climatic region	Temperate Highveld region	Temperate Highveld region	Tropical summer rainfall area	Temperate Highveld region	Temperate Highveld region	Temperate Highveld region	Temperate Highveld region

Consumption per business unit (000m³)

Hazardous waste management

In 2010, a multi-disciplinary task group was formed to focus on developing an integrated approach to managing air, water and biodiversity. Detailed action plans should be finalised in 2011. A company-wide policy on waste management will be finalised in 2011. This will address material issues, such as the avoidance, minimisation, management and disposal of hazardous as well as general waste generated from Exxaro operations.

Radioactive materials are a potential risk at KZN Sands, Namakwa Sands and Zincor. Exxaro aims to have zero radiation incidents and to keep personal radiation exposure limits as low as possible. The group complies with the conditions of applicable authorisations and limits set by the International Commission on Radiological Protection or ICRP. This includes developing an appropriate policy, implementing radiation protection programmes to protect workers and members of the public, and enforcing an emergency preparedness policy that spans transportation and physical security procedures.

To date, there have been no breaches of Exxaro’s licence conditions issued by the National Nuclear Regulator for radioactive waste.

Cleaner production

Exxaro has several research projects under way to reduce its environmental footprint from waste production and water use. With a budget of over R1 700 million for the review period (mostly for scouting work), these include:

Dry beneficiation
Building environmental competency
Power generation from waste coal
Slimes community of practice
Water community of practice
Water conservation and purification.

By year end, dry beneficiation technologies were being tested for various applications, with some already included in Grootegeluk’s Medupi designs. In addition, solid progress has been made in raising awareness of the importance of water conservation and treatment, as well as slimes treatment, across the group’s business units.

Air quality management

Exxaro has implemented an air quality management framework for quantifying and determining the impact of our ambient emissions, and managing non-compliance and continuous improvement (below). This approach is aligned to the requirements of the 2007 national framework for air quality management in South Africa, and provides a standardised methodology across the group for quantifying emissions and determines the appropriate action in mitigating their impact.

In applying this framework, particularly the emission inventory process, across our operations, it is evident that most of our ambient pollution impacts are associated with emissions of particulate matter or dust mining activities. In addition, Exxaro also operates smelting operations in its mineral sands and base metals commodity businesses. Emissions from these smelters are regulated by a registration certificate issued by the chief air pollution control officer in the Department of Water and Environmental Affairs (DWEA). Emissions of concern from these smelters are particulate matter (represented as PM₁₀), sulphur dioxide (SO₂) and nitrogen oxide (NO_x).

Air quality management framework

Emissions from mining operations

Every day, Exxaro addresses the challenges of dust-generating activities (blasting, vehicle entrainment and wind erosion of exposed operational areas) through environmental management measures. These include dust-suppressant agents on haul roads, applying water to secondary unpaved operational roads, and vegetating topsoil and overburden material.

All mining operations monitor daily fallout dust rates and results are assessed against national standards (SANS)(figure 1).

Case study - Improving air quality at Namakwa Sands

One of the biggest environmental challenges at the Namakwa Sands smelter has been solved by a new extraction plant that removes dust and fumes from the tapfloor during tapping operations.

Namakwa Sands has an obligation to keep the West Coast environment as beautiful as it is, and provide a safe environment for employees. But the previous fume-extraction system had become inefficient and conditions in the furnace building were unpleasant during taps. On a calm day the red dust hanging over the furnace building was visible from a distance.

Construction of the new fume-extraction plant took 13 months at a cost of R63 million and, importantly, was completed without a lost-time injury. The plant uses the most modern filtration equipment and energy-efficient fans run at reduced power between taps. Most importantly, it improves conditions on the tapfloor.

Figure 1: National standards (SANS)


Level	Dust fallout rate (mg/m²/day)	Permitted frequency
Target	300
Action residential	600	Three in any year, no sequential months
Action industrial	1 200	Three in any year, no sequential months
Alert threshold	2 400	None. First exceedance requires remediation and compulsory report to authorities

Figure 2: Results from Exxaro’s monitoring points


		Number of monthly exceedances 2010
Commodity	Points monitored with single-unit fallout dust bucket	600mg/m²/day	>3 months/year	1 200 mg/m² day	>3 months/year
Coal	58	9	5	4	1
Mineral sands and base metals	36	10	7	5	2

Performance of smelters


Business unit	No of points	Pollutant	Permitted emission rate	Units	Assessed	Number of exceedances recorded for 2010
Namakwa Sands	2	PM	30	mg/m³ (24hr average)	Bi-annually	0
	2	SO₂	500	mg/m³ (1hr average)	Bi-annually	0
KZN Sands	1	SO₂	500	mg/m³ (1hr average)	Quarterly	0
	14	PM	50	mg/m³ (24hr average)	Quarterly	2
Zincor	2	SO₂	500	mg/m³ (1hr average)	Continuous	0

PM: particulate matter, SO₂: sulphur dioxide

Although Exxaro’s operations are classified under industrial targets, some are close to densely populated areas. As such, tracking compliance against the more stringent residential limit as opposed to the industrial limit provides a standardised and more appropriate management approach to move our operations towards the long-term target of 300mg/m²/day.

The tables above give a consolidated view of our performance against air quality guidelines. In total, coal operations recorded four monthly exceedances of the industrial limit of 1 200mg/m2/day. The SANS guideline allows operations to have at most three exceedances per year without any reporting. Given the strong performance of our coal operations in 2010, the guideline industrial limit was exceeded by one month. The mineral sands and base metal operations also registered exceedances of the industrial limit for five months in 2010.

We are concentrating on improving our mitigation measures for operational activities that contribute significantly to dustfall. This will ensure fallout dust is reduced to national residential guidelines of 300mg/m2/day.

Emissions from smelting operations

All Exxaro’s smelters have registration certificates under section 10 of the Atmospheric Pollution Prevention Act, 1965, which has been superseded by the National Environment: Air Quality Act, 34 of 2004. These stipulate acceptable stack emissions for particulate matter at KZN Sands smelters; particulate matter, NO_x and SO₂ at Namakwa Sands; and SO₂ at the zinc smelter. The performance of our smelters against permit conditions is shown below.

Biodiversity management

Exxaro-owned and -managed land has significant biodiversity given the wide geographical spread of the group’s operations. As part of the process of developing biodiversity management plans for each business unit, a comprehensive study has determined vegetation types on all land held by Exxaro and quantified greenhouse gas reduction as a result of vegetation. The carbon quantities captured in the 32 types of vegetation in land under operational control are estimated to be around 30 million tonnes. A summary of biodiversity management is shown overleaf.

In terms of a formal biodiversity management policy, revised in 2010, group operations are mandated to ensure that conserving biodiversity and using natural resources through mining co-exist through proper planning, decision making, conservation and offsets.

The objectives of this policy focus on protecting and conserving biodiversity-rich sections of undisturbed areas, preventing or limiting destruction of Red Data faunal and floral species, and eradicating and controlling alien invasive species through practical and cost-effective management skills, programmes and action plans.

A detailed management standard was issued at the end of the review period to guide business units in implementing group policy. The standard aims to:

Ensure a cost-effective integrated approach to biodiversity management
Be environmentally responsible in protecting and managing biodiversity
Be ecologically sustainable by ensuring biodiversity-rich areas are contained within mining right areas, to manage and monitor protected and threatened Red Data species, and control declared category 1, 2 and 3 declared invasive plants from spreading.

Detailed desktop studies at all business units have been completed while specialist biodiversity assessments have been completed for Tshikondeni, Inyanda, New Clydesdale, Leeuwpan, KZN Sands and Namakwa Sands. Assessments are under way for Grootegeluk, North Block Complex and Arnot. Identification, mapping and management plans for the control and eradication of category 1, 2 and 3 species were included in the biodiversity assessments. Management plans for these species per business unit will be finalised and implemented in 2011 although implementation is already under way at Grootegeluk and KZN Sands. Marking protected trees and compiling and submitting permit applications for various developments at Grootegeluk and Tshikondeni (the only two business units where this was required to date) was conducted for various developments. All activities at Grootegeluk and Tshikondeni where protected trees were impacted in 2010 had approved permits for the removal/destruction and transport of protected trees.

At Inyanda relocation of the Red Data species Frithia humilis was completed and will be monitored until 2012. A post-graduate research project with the North West University on the ecology of the relocated species began in January 2011, in conjunction with SANBI (SA National Biodiversity Institute) and the Mpumalanga Tourism and Parks Agency.

To date, biodiversity action plans have been developed for five of Exxaro’s 17 operating units. The balance will be completed in 2011. Expenditure of around R30 million in 2010 is expected to increase as biodiversity action plans are fully implemented and declared category 1, 2 and 3 alien invader species are eradicated.

During the year, biodiversity was affected at Arnot Mooifontein where mining operations intruded on a wetland area. After a directive from the Department of Water Affairs on the haul road in the eastern pit of Mooifontein operation, we stopped using and then closed this haul road.

We have prioritised rehabilitation of the affected wetland area to improve biodiversity and ecological functionality. Measures include ongoing mitigation initiatives and offset areas of similar biodiversity functionality. Stakeholders and interested and affected parties have been duly consulted on these envisaged measures.

Biodiversity management

Click on the image to view the larger table

Legal framework for managing biodiversity in Exxaro

Biodiversity management in South Africa is based on the clause in the country’s constitution that stipulates ‘everyone has the right to an environment that is not harmful to their health or wellbeing and to have the environment protected, for the benefit of present and future generations’. It is governed primarily by the National Environmental Management Act, and supporting legislation, summarised in the following legislative framework that guides Exxaro’s policy on biodiversity management:

National Environmental Management Act (NEMA) (Act No 107 of 1998, Mine rehabilitation)
National Environmental Management Biodiversity Act (NEMBA) (Act No 10 of 2004) and its annexures on threatened or protected species
National Environmental Management: Protected Areas Act (NEMPAA) (Act No 57 of 2003)
National Water Act (NWA) (Act No 36 of 1998)
Mineral and Petroleum Resource Development Act (MPRDA) (Act No 28 of 2003)
National Environmental Management: Air Quality Act (NEMAQA) (Act No 39 of 2004)
Environment Conservation Act (ECA) (Act No 73 of 1989)
Conservation of Agricultural Resources Act (CARA) (Act No 43 of 1983)
World Heritage Convention Act (WHCA) (Act No 49 of 1999)
National Forests Act (Act No 84 of 1998)
Draft integrated coastal management bill (2006)
Marine Living Resources Act (Act No 18 of 1998)
Marine Pollution (Intervention) Act (Act No 64 of 1987)
Dumping at Sea Control Act (Act No 58 of 1973)
Sea-Shore Act (Act No 21 of 1935):
Sea Fisheries Act (Act No 58 of 1973)

In terms of Exxaro’s biodiversity policy, all related risks need to be identified, assessed and prioritised for all activities at business units. This includes the control and management of all Category 1 alien invaders, the protection and management of biodiversity hotspot areas/biodiversity-rich ecosystems, conservation of fauna and flora of business units situated in or adjacent to sensitive areas such as centres of plant endemism (Fairbreeze, Rosh Pinah) sensitive ecological areas (Matla river diversion), adjacent to RAMSAR sites (Zincor) or adjacent to protected areas or areas of high sensitivity for the tourism industry (Tshikondeni).

Mine rehabilitation

Exxaro’s mine rehabilitation policy and management standard follows a legal and risk approach - chronological steps that optimise ongoing rehabilitation from feasibility stage through all operational phases and, ultimately, preparing for efficient closure of any mining operation. This framework dictates physical processes, financial provisions, and rehabilitation performance indicators.

Business units report quarterly on these indicators. By monitoring this data, rehabilitation backlogs are identified before undue financial liabilities are incurred. The goal of the environmental rehabilitation department is to budget for and schedule ongoing rehabilitation aligned with the mining plans of each business unit. Integral to this process is minimising any negative mining impacts on affected parties or the environment and communicating rehabilitation actions via established forums.

Exxaro contributed roughly R68 million in 2010 and had R502,5 million in its trust fund at 31 December 2010 for mine-closure activities. Updating and revising rehabilitation provisions annually also highlights potential rehabilitation alternatives that could decrease the closure liabilities of mines in the long term.

Closure-cost reviews were completed at eight operations, including five inactive sites. Performance assessments against the objectives of environmental management plan reports were completed for eight operations and submitted to DMR. In line with the growing government focus on rehabilitation, Exxaro is ensuring that all group business units have reviewed their rehabilitation plans (with appropriate schedules and budgets) and that these are being implemented.

During the period, the Department of Mineral Resources Mpumalanga served Arnot Colliery with a directive to submit an EMPR (environmental management plan report) performance assessment report. This is a regulatory tool introduced by the department to monitor implementation of the EMPR. It is also a requirement in terms of the Exxaro environmental liability management framework that operations conduct EMPR performance assessments, and that such assessments be reported to the department. Scheduling these assessments is done through the Exxaro environmental rehabilitation fund. The Arnot EMPR performance has since been completed and submitted to the department in Mpumalanga.

Exxaro’s North Block Complex also received a directive from the department on the need to align mining activities (including the washing plant) with the EMPR. Since the processes of updating these documents had already started in 2010, the required EMPR update was finalised and submitted to the department in Mpumalanga.

Mine closure

Exxaro has two mines at different stages of their closure plans - Durnacol and Hlobane. In 2010, R145 million was budgeted for mines in closure, spanning implementation of the relevant social plans and rehabilitating negative and latent environmental impacts.

During the year, implementation of Durnacol’s social plan gained new momentum and projects such as the training centre, bakery and steelworks are now operational, underscoring solid working relationship between this community and Exxaro. Shaft-sealing and dump rehabilitation activities during the year have improved water, dust and visual impacts at Durnacol.

At Hlobane, the group policy of completing rehabilitation work manually has created job opportunities during the construction phase. Crack and subsidence sealing at Hlobane has improved water quality in the catchment area.

Current mining legislation presents a number of risks specific to mine closure. These include possible pressure from affected communities to increase the corporate contribution to mine-closure social programmes which will escalate the longer-term financial requirement. An additional risk comes from third-party applications for continued mining at mines in closure (Hlobane and Durnacol). Continued mining at these old workings are exceptionally dangerous and any incidents will have an impact on Exxaro’s image. Future liability is likely to escalate as new mining and old mining impacts cannot be separated in terms of water quality, subsidence and crack formation. With any mine closure, there is also the risk that implementing the closure plan might not address all negative impacts. Exxaro has prepared as fully as possible for these contingencies in its existing closure plans.

Broader industry participation

As a stakeholder in the mining industry, Exxaro actively participates in shaping appropriate policies in South Africa through many channels, including:

The Chamber of Mines
NERSA (National Energy Regulator of South Africa)
EIUG (Energy Intensive Users Group)
NERT (National Electricity Response Team)
Energy efficiency accord through the technical committee facilitated by the National Business Institute (NBI)
Industry energy policy-influence workshops
World Wildlife Fund (WWF) round table event
South African Chamber of Commerce and Industry’s (SACCI) electricity dialogue
National trade delegation to the UK in March 2010
SANBI (the national body for biodiversity).

Exxaro is also involved in the initiatives of:

South African Independent Power Producers Association (SAIPPA)
Coaltech 2020
Fossil Fuel Foundation
Peace Parks Foundation
SA Centre for Carbon Capture and Storage with international and local partners
Clinton Foundation.

Four years ago, Exxaro began sponsoring the Chair in Business and Climate Change at Unisa to create a centre of excellence in business and climate change research, education and advocacy. While solid progress was made in the early years of this sponsorship, including the landmark publication of Climate Change: A Guide for Corporates (Unisa Press, 2009), the pace has accelerated considerably since the appointment of Dr Godwell Nhamo. Since August 2009, four research papers have been published, nine conference papers presented, and related courses at honour’s level proposed. The Exxaro group was used as the first of a series of case studies examining how companies intend operating in a low-carbon economy. The Exxaro study was published in 2009. Dr Nhamo is also a member of the National Business Initiative (South Africa) climate change committee working group, and a member of the Department of Trade and Industry/Business Unity South Africa climate change forum. Dr Nhamo was named Unisa’s researcher of the year in 2009, a significant vote of confidence in the chair’s activities.

Given this important progress, Exxaro has renewed its sponsorship of this chair until 2015. This will maintain the current momentum and strengthen the chair’s critical research, advocacy and tuition activities in advancing the business and climate change agenda.

From 2010, research will be streamlined to focus mainly on business and address climate policy at national, regional and international levels, including the transition to a low-carbon economy (ie issues relating to green/sustainable procurement), energy and climate change, integrated reporting and other emerging areas. Research topics will address climate change and business issues on four key thematic areas: mitigation, adaptation, greenhouse gas inventories, research and development (including breakthrough low-carbon technologies).

Environmental performance

Exxaro has a standardised system in all business units to ensure the effective management of all incidents, leading to a safer and more sustainable work environment. This integrated platform tracks and manages incidents; identifies root causes and ensures proper incident reporting and management. Environmental incidents are categorised as:

Level 3 - Environmental incidents with irreversible on-site, immediate and remote-area impacts, will involve long-term clean-up activities and a negative impact on shareholder value (eg over R500 000 in damage has definitely occurred)
Level 2 - Environmental incidents with reversible on-site and immediate surrounding impacts, will involve more than 48 hours in clean-up activities and a negative impact on shareholder value (eg R50 000 - R500 000 in damage has definitely occurred)
Level 1 - Environmental incidents with reversible on-site impacts, will involve immediate clean-up and a negative impact on shareholder value (eg under R50 000).

Reportable environmental incidents across the group are shown alongside. A total of 30 level 2 incidents occurred in 2010, and were reported to the relevant authorities. Corrective actions to remedy the incidents and prevent them from recurring were approved by authorities prior to implementation. There were no significant (level 3) incidents reported in 2010.

Fifteen of Exxaro’s 17 business units have ISO 14001 accreditation, reflecting the global industry standards in place.

Case study - Carbon offset project

Each year, Exxaro offsets the environmental impact of its annual report and group newsletter. The carbon footprint of the paper, printing and distribution is quantified under the international greenhouse gas reporting protocol. To ensure the integrity of an offset project, five criteria set by the World Bank must be followed:

1	The project must be additional (ensuring the project is not claiming reductions that would already occur)
2	It must result in real emission reductions (ensuring project activity is monitored and claimed emission reductions are verified)
3	Emission reductions from the offset project must not be double-counted (the same emission reductions cannot be sold to several buyers at the same time)
4	Emission reductions must be permanent
5	The offset project should result in community benefits.

In 2009, we installed a 300-litre solar-powered geyser at the Badirammogo Home in Olievenhoutbosch, a low-cost housing area close to Exxaro’s corporate centre. The home offers full-time care to eight elderly residents and will benefit from the significant reduction in monthly running costs.

In 2010, we planted sufficient trees in and around our operations to offset the impact of the annual report and Exxaro’s internal newsletter.

Environmental incidents - group


	Level 1		Level 2		Level 3
Commodity business	2010	2009	2010	2009	2010	2009
EXXARO COAL	500	495	18	6	0	0
Arnot	50	75	1	0	0	0
Char plant	54	23	0	0	0	0
Durnacol	0	0	0	0	0	0
Grootegeluk	61	135	1	2	0	0
Hlobane	0	0	0	0	0	0
Inyanda	22	37	11	4	0	0
Leeuwpan	103	28	0	0	0	0
Matla	109	51	1	0	0	0
New Clydesdale Colliery	94	72	1	0	0	0
North Block Complex	4	26	2	0	0	0
Tshikondeni	3	48	1	0	0	0

MINERAL SANDS	330	339	12	14	0	0
KZN Sands	86	79	11	10	0	0
Namakwa Sands	244	260	1	4	0	0

BASE METALS AND INDUSTRIAL MINERALS	101	188	0	0	0	0
Glen Douglas	30	47	0	0	0	0
Rosh Pinah	0	0	0	0	0	0
Zincor	71	141	0	0	0	0

CORPORATE OFFICE	0	0	0	0	0	0
Alloystream	0	0	0	0	0	0
Ferroalloys	0	0	0	0	0	0
Head office	0	0	0	0	0	0
R & D	0	0	0	0	0	0

Total	931	1022	30	20	0	0
Level 1: Minor impact and/or non-compliance Level 2: Intermediate impact and/or non-compliance Level 3: Major impact and/or non-compliance

Environmental incidents - level 2


Business unit	Description	Receiving environment
Grootegeluk	Accidental diversion of reclaimed slimes dam water to an unlined slimes dam caused localised pollution.	Groundwater
Matla	Graves were discovered during mining-related activities; area demarcated and South African Heritage Resource Agency (SAHRA) informed.	Heritage resource
Arnot	Temporary silt damwall broke and caused slurry to run into field.	Soil and natural vegetation
KZN Sands - Hillendale	Failure of a slimes transfer pipeline feeding the residue dam.	Soil and natural vegetation
KZN Sands - CPC	Burn-through on furnace 2 shell during a metal tap with dust and iron oxide fumes.	Air
KZN Sands - Hillendale	Breach in berm caused sediment to wash off site into Umhlathuze River.	Surface water
KZN Sands - Hillendale	Water from backfill cyclones breached the berm; discoloration of Umhlathuze River.	Surface water
KZN Sands - Hillendale	Burst pipe caused slimes to spray onto neighbouring property.	Soil and crops
KZN Sands - Hillendale	Subsoil saturated due to elevated water ingress from hydro cyclone underflow; discoloration and retarded growth of sugar cane in neighbouring field.	Subsoil and crops
KZN Sands - Hillendale	Blocked channel caused surface runoff to neighbouring properties with damage to tomato crops.	Surface water
KZN Sands - Hillendale	HDPE pipe burst caused ROM to spill offsite.	Soil
KZN Sands - CPC	Stack emission exceeded permit requirements for particulate matter.	Air
KZN Sands - CPC	Blockage in small disintegrator delivery line caused excessive visual smoke and particulate matter emissions	Air
North Block Complex Glisa	Decant water from block B flowing into a clean water environment.	Surface water
North Block Complex Strathrae	Slurry spill into the field.	Soil and natural vegetation
Tshikondeni	Discharge of sewage.	Soil and natural vegetation
Inyanda mine	Dust concentrations exceeded air quality standards five times in 12 months.	Air
Inyanda mine	Coal sediment and contaminated water spilled into a clean environment	Surface water
Inyanda mine	Heavy rainfall caused return-water dam level to exceed lined level.	Soil and groundwater
Inyanda railway siding	Dust concentrations exceeded air quality standards once in 12 months.	Air
Inyanda railway siding	Pollution control dam overflowed twice in 12 months.	Surface water
Inyanda mine	Evaporation dam overflowed	Surface water

Consumption per business unit: 1 January - 31 December 2010

Click on the table to view the larger version

Energy consumption was 4,8% lower in 2010 mainly due to the unplanned downtime on furnaces at KZN Sands.

Operational intensities


	Saleable product (kt)		Energy/t		Electricity/t		Diesel/t		Water/t
Commodity business	2010	2009	2010	2009	2010	2009	2010	2009	2010	2009
COAL	44 436	36 412	0,10	0,11	0,05	0,05	0,05	0,06	0,27	0,31
Arnot	4 167	5 211	0,10	0,10	0,05	0,04	0,06	0,07	0,18	0,20
Char plant	114	n/a	0,20	0,40	0,16	0,25	0	0,14	0,81	1,70
Durnacol	–	–	–	–	–	–	–	–	–	–
Grootegeluk	18 426	13 521	0,09	0,12	0,05	0,07	0,03	0,05	0,34	0,49
Hlobane	–	–	–	–	–	–	–	–	–	–
Inyanda	1 830	n/a	0,09	0,21	0,01	0,03	0,08	0,18	0,47	1,04
Leeuwpan	3 149	2 585	0,21	0,19	0,03	0,03	0,18	0,17	0,16	0,16
Matla	12 336	11 254	0,05	0,05	0,04	0,04	0,01	0,01	0,12	0,14
New Clydesdale Colliery	858	785	0,21	0,25	0,06	0,05	0,15	0,20	0,34	0,35
North Block Complex	3 278	2788	0,10	0,11	0,00	0,00	0,10	0,11	0,10	0,00
Tshikondeni	278	268	0,57	0,56	0,43	0,43	0,13	0,12	0,55	1,95

MINERAL SANDS	838	984	5,30	10,60	4,39	4,28	0,59	0,49	13,62	13,24
KZN Sands	499	659	3,94	2,98	3,28	3,49	0,14	0,11	18,00	16,86
Namakwa Sands	339	325	7,29	7,61	6,02	5,89	1,25	1,26	7,18	5,89

BASE METALS AND INDUSTRIAL MINERALS	1 269	1 440	1,45	1,28	1,32	1,18	0,13	0,11	2,13	1,90
Glen Douglas	1 061	1 228	0,09	0,08	0,03	0,04	0,05	0,05	0,28	0,24
Rosh Pinah	118	121	1,86	1,82	1,32	1,33	0,54	0,51	8,73	9,49
Zincor	90	91	17,01	16,78	16,55	16,43	0,46	0,34	15,32	14,24

CORPORATE OFFICE	–	–	–	–	–	–	–	–	–	–
Alloystream	–	–	–	–	–	–	–	–	–	–
Ferroalloys	–	–	–	–	–	–	–	–	–	–
Head Office	–	–	–	–	–	–	–	–	–	–
R & D	–	–	–	–	–	–	–	–	–	–

Total	46 544	38 836	0,25	0,27	0,17	0,20	0,07	0,07	0,59	0,70

Eco-efficiency


		2010	2009	2008
COAL	Energy (GJ/t)	0,1	0,11	0,09
	Water (m³/t)	0,27	0,31	0,27
MINERAL SANDS	Energy (GJ/t)	5,3	5,09	4,65
	Water (m³/t)	13,62	13,24	27,00
BASE METALS AND INDUSTRIAL MINERALS	Energy (GJ/t)	1,45	1,29	1,28
	Water (m³/t)	2,13	1,90	2,11

CO₂ from electricity purchased and diesel


	CO₂ from electricity purchased (kt)*		CO₂ from diesel (kt)**		Total CO₂ emissions (kt)
Commodity business	2010	2009	2010	2009	2010	2009
COAL	532,67	509,71	157,66	163,07	690,33	672,78
Arnot	51,45	55,86	17,26	25,29	68,71	81,14
Char plant	5,00	2,57	0,34	0,39	5,34	2,96
Durnacol	0,09	–	0,43	–	0,51	–
Grootegeluk	261,92	251,21	47,47	53,95	309,39	305,16
Hlobane	0,00	–	0,10	–	0,11	–
Inyanda	7,07	6,39	10,38	9,98	17,46	16,37
Leeuwpan	24,05	21,00	41,39	31,68	65,45	52,68
Matla	133,88	128,81	5,09	4,79	138,97	133,60
New Clydesdale Colliery	14,55	10,44	9,29	11,73	23,83	22,17
North Block Complex	2,40	1,44	23,28	22,81	25,69	24,25
Tshikondeni	32,25	32,00	2,63	2,44	34,88	34,44

MINERAL SANDS	1 002,39	1 170,71	36,86	35,72	1 039,25	1 206,43
KZN Sands	445,84	638,38	5,28	5,27	451,12	643,65
Namakwa Sands	556,55	532,33	31,58	30,45	588,12	562,78

BASE METALS AND INDUSTRIAL MINERALS	455,92	471,45	12,00	11,39	467,92	482,83
Glen Douglas	9,73	12,45	4,30	4,54	14,03	16,99
Rosh Pinah	42,55	45,00	4,70	4,54	47,25	49,54
Zincor	403,63	414,00	3,00	2,31	406,63	416,31

CORPORATE OFFICE	14,08	13,44	0,03	–	14,11	13,44
Alloystream	0,46	1,36	–	–	0,46	1,36
Ferroalloys	4,80	5,30	–	–	4,80	5,30
Head Office	6,62	6,79	0,03	–	6,66	6,79
R & D	2,20	–	–	–	2,20	–

Total	1 990,97	2 151,87	206,52	210,17	2 197,49	2 362,04
* Electricity purchased * 0,98/1 000 ** Diesel used * 0,00271/1 000