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Safety

Disclosure on management approach

Keeping our people safe
Our safety and sustainable development governance model begins with meeting legislative requirements as a minimum standard. Sophisticated risk management systems and processes are then modelled around key risks for implementation at operational level. A risk-based approach also informs the way resources are allocated and used in the group to ensure ongoing progress towards and beyond legal compliance.

To ensure effective communication, Exxaro’s official language is English. All formal communication takes place in English, while remaining sensitive to local conditions. Fanakalo (the hybrid language traditionally used in South African mines) is not encouraged and no training and development takes place in that language.

Our ultimate target remains zero injuries and, therefore, zero fatalities. To reach this goal, we have an incremental target of improving safety performance by 30% each year. This is measured by the lost-time injury frequency rate - or LTIFR, a standard in the mining industry.

Every lost-time injury is investigated by the relevant business unit manager, while all fatalities are investigated by a committee with the appropriate skills, headed by an independent chairman. These are reported to the board and Exco. Each business unit tracks its adherence to standards and legislation through a programme of self-assessments and corporate audits.

We aim to achieve this target through stringent application of management protocols, programmes and systems. Formal management-worker health and safety committees are in place at all operations, and meet regularly to ensure we reach our targets.

The 2009 strategic review of our safety practices highlighted key risks facing our group, particularly limited hazard awareness, varied safety competency and non-adherence to corporate safety standards. Collectively, these may result in the perception of Exxaro being an unsafe business - a perception that carries material risk to our sustainability. Accordingly, we have developed a timeline (opposite) to Exxaro’s desirable state that includes:

Zero fatalities
Zero lost-time injuries
Hazard identification and risk assessments (HIRA)
Visible felt leadership as a key driver of safety excellence in Exxaro
Zero repeat incidents

Exxaro also has a policy detailing the approach to identifying, preparing for and responding to emergency situations affecting employees and surrounding communities. This spans all known types of emergency including fire, flood, bomb threats, etc. Emergency situations that have occurred in recent years have been well handled, demonstrating the effectiveness of both policy and training.

Safety

During 2010, no fines or sanctions for non-compliance with safety and health laws and regulations were imposed on any Exxaro operation.

	2009		2010-2011	✔		2012-2015
	CEO Safety Summit outcomes:		Review priorities			Review priorities
1	Set up task teams to address focus areas	1	Review safety improvement plans (SIPs)	✔	1	Annual CEO safety summit to challenge safety performance
2	Develop safety communication strategy	2	Set up and train peer review teams		2	Annual revision of SIPs
3	Consistent disciplinary code applied equally across all levels	3	Conduct group-wide peer reviews to promote implementation of SIPs		3	Periodic peer reviews
4	Revised HIRA standard to be understood and applied by all	4	SIP progress reports every quarter	✔	4	Develop competency on revised HIRA standard
5	Revised visible felt leadership standard consistently applied across Exxaro	5	CEO safety summits 2010 to discuss progress and challenges	✔
6	Safety improvement plans as a result of first summit	6	Continue benchmarking and sourcing best practices	✔
7	Standardised incident investigation process	7	Develop competency on revised HIRA standard	✔ ✔

Flying the safety flag

Since May 2010, every Exxaro operation has flown a ‘safe day’ flag for each day without a lost-time injury. These highly visible flagpoles keep safety awareness high and celebrate every day without injury. In the eight months of this campaign, flags were raised on 205 of 245 working days - reflecting a safety-day rate of 84% at Exxaro.

Safety targets

Exxaro has committed R60 million over five years (2009-2013) to achieve its safety targets:

Zero fatalities - actual for 2010 is two fatalities
0,21 lost-time injury frequency rate per 200 000 hours for 2010; annual improvement of 30% - actual for 2010 0,25

Highlights

Actual LTIFR of 0,25 is an annual improvement of 24%, below the target of 30% but steady progress
Namakwa Sands wins NOSA Top 100 Mining Companies safety award for third consecutive year, competing against over 120 international companies using the NOSA SHE management system
KZN Sands’ Hillendale shift C and residue dam B teams have maintained their outstanding safety records since 2001 (zero fatalities and zero lost-time injuries)
Namakwa Sands’ smelter reached 1 134 LTI-free days by year end
Namakwa Sands’ separation plants celebrated one year without a lost-time injury in June 2010 and reached 569 days by year end
North Block Complex achieved 20 000 fatality-free shifts in November 2010
Arnot engineers developed a remote device that enables electricians to switch oil circuit breakers from at least 20m away - a safety innovation with group-wide application.

Safety summits

In 2009 Exxaro initiated its group-wide CEO Safety Summits under the theme Safety Always, All the Way. These bi-annual summits involve a range of stakeholders to identify key areas that will make a tangible difference to safety performance: consequence management, safety training, culture (the Exxaro safety way of life), mini-HIRA (hazard identification and risk assessment) and communication.

Safety improvement plans in action

Following the 2009 safety summits, Exxaro’s safety programme, Safety Always All The Way, was launched across the group in 2010. Since then, the people of Exxaro have been flying their Safe Day flags high, and monitoring and measuring their progress each step of the way.

Health and hygiene

Occupational health hazards affect a large number of workers globally - the ILO estimates that some 200 000 workers globally lose their lives at work and 68-157 million new cases of occupational diseases occur from various exposures in the workplace. In South Africa, the Department of Mineral Resources reported 177 fatalities but over 10 000 cases of occupational diseases in the mining industry in 2008. In 2009, this proportion had changed to 167 fatalities but over 8 000 cases of occupational diseases. Importantly, deaths due to these diseases will often occur several years after the employee has left the industry. At Exxaro, the trend of more occupational diseases than fatalities each year is similar but not nearly as pronounced:

In 2008, 22 occupational diseases and five fatalities
In 2009, 26 occupational diseases and four fatalities.

Healthy employees are essential for a safe workplace. Because the health effects of workplace hazards on an employee may only manifest years after initial exposure, it is important that every employee is made aware of his/her role in preventing occupational diseases, their impact and the means to mitigate the effects of potential exposure to workplace hazards.

Accordingly, Exxaro employees are made aware of hazards in the work environment, and the risk they pose to employee health:

Health risks are identified; quantified and monitored through a ventilation and occupational hygiene surveillance programme
Monitor health through the medical surveillance programme, to check that people are in good health
Employees are:

encouraged to be vigilant about conditions that could affect their own safety and health or that of their colleagues
provided with information on the health implications of exposure to the risk
made aware of measures that should be taken for them to maintain their health.

The exposure risk to workplace hazards is managed through a hierarchy of controls by:
- eliminating the hazard at source
- substituting the equipment that generates the hazard
- controlling levels of exposure by either moving employees out of the work area or providing personal protective equipment.

Employees are also made aware of the contribution of occupational diseases to the quality of life and loss of potential income and are encouraged to comply with mitigation measures in place in the workplace.

Environment
Sustainable development issues are central to Exxaro’s business, particularly the use of natural resources like water, air, biodiversity and land. Using these responsibly means:

Ensuring all activities are properly authorised
Using energy and water as efficiently as possible
Ensuring activities are conducted responsibly, from the twin perspectives of compliance and natural resource use.

With the support of government, Chamber of Mines and Exxaro’s recognised unions, this focus on safety is producing tangible benefits. By year end, five business units had worked for 12 months without a losttime injury (LTI) and the group LTIFR had improved by 24%.

Following on the CEO Safety Summit held in April 2010, the Exxaro safety improvement plan was rolled out to all business units. This plan focuses on training VFL change champions (change through visible felt leadership), communicating Exxaro’s zero-tolerance safety rules, rolling out the safety training matrix, safety communication guidelines and mini hazard identification and risk assessments (HIRA). This programme will continue in 2011, supplemented by the introduction of health, environment and related issues to enhance awareness and participation.

One of the most notable safety performances of the review period came from Namakwa Sands, which was also ranked first in the Top 100 Mining Companies category at the annual National Occupational Safety Association (NOSA) awards. This was the third consecutive win for Namakwa Sands, with its mine and smelter competing against 126 other international mining companies using NOSA SHE management systems. To qualify globally for entry, companies first have to win their regional competitions in which they are evaluated on their compliance to recognised SHE management standards, legal compliance and actual performance and experience. This is done during the annual NOSA grading audit conducted at all Exxaro’s Namakwa Sands operations and companies using the same management system.

Equally notable, Exxaro’s Arnot was selected as the pilot site for the South African coal sector as part of the mining industry’s occupational safety and health (MOSH) fall-of-ground initiative. The customised training intervention subsequently developed and introduced at Arnot uses initial/early examination to combat problems experienced with fall-of-ground incidents and is yielding impressive results. Since its implementation, Arnot has recorded no lost-time injuries from falls of ground, while production is up over 20% post training.

Safety achievements

	Fatality-free production shifts
Grootegeluk	1 000
Inyanda	1 000
Matla mine 2	1 000
Matla coal operations	1 000
Matla mine 3	2 000
Tshikondeni	2 000
Arnot Coal	5 000
New Clydesdale	5 000
Matla mine 1	8 000
Matla central	10 000
North Block Complex	19 000

Case study - No injuries for 1 000 days at Namakwa Sands

In December, Namakwa Sands’ smelter reached a major safety milestone of 1 134 days without a lost-time injury. This is especially significant considering a complete furnace reline and two partial relines were under way at the same time. Also under construction were a product storage shed, residue dam and new fume-extraction plant.

All these activities involved large numbers of contractors in addition to the inherent risks of a smelter environment (where molten metal is tapped at 1 600°C, carbon monoxide gas is released during the tapping process and large mobile machinery is used in the smelting operation).

The smelter’s previous LTI-free record was 486 days, reflecting benefits of the current and ongoing focus on safety.

Case study - Safety at Namakwa Sands

Until recently, the high moisture content of material on the mill stockpile at Namakwa Sands’ west mine presented a serious safety risk in the form of mud rushes. Other potential risks included loss of production and equipment damage.

To address this, a project team developed and constructed a new oversize screening system. Screening out oversize material (+30mm) allows this to bypass the run-of-mine stockpile and regular screens, and feed directly into the oversize stockpile.

Construction started in January 2010, and the first feed went through in July. The regular screens are now more efficient, and Exxaro’s engineers estimate that only 7% of the moisture is now discharged into the mill stockpile versus 15% before. Slurry rushes inside and outside the mill feed tunnel have been eliminated and the mill can now be fed safely and continuously.

The project was completed without a single lost-time injury.

Challenges

Although key risks differ by operation, Exxaro’s major challenges are vehicle incidents, energy and machinery isolation, and risk awareness and discipline at all levels. Skills shortages exacerbate these challenges and, accordingly, the group concentrates on ensuring sufficient trained people are in place.

Improving safety performance extends to contractors at all Exxaro operations as part of a formal programme:

Contractors are managed as part of Exxaro’s workforce
Adherence to corporate contractor management standards is enforced by each operation’s contractor manager
Monthly inspections ensure compliance
Induction and medical examinations are required by all contractors before starting work
Contractors participate in monthly SHE meetings at operations.

LTIFR

Fatalities

Safety statistics

Exxaro set a target of zero fatalities, and an LTIFR (per 200 000 hours worked) of 0,21 for 2010. Despite a steady reduction in the LTIFR from 0,52 in 2005, actual performance was 0,25 in 2010. This is a record 24% improvement on the LTIFR of 0,33 in 2009. In risk-specific terms, the leading cause of injury was lifting and materials handling. The safety of our people remains fundamental to our business, and we will not rest until we achieve our safety goals through collective responsibility, commitment and ongoing focus.

The fatality frequency rate per million manhours worked in 2010 was a commendable 0,04, compared to 0,07 in 2009. Our target remains zero, as no death is acceptable. Despite excellent safety performances at several mines, we regrettably lost a contractor employee at Tshikondeni in March 2010 when he was caught between two vehicles in a towing process. In June 2010, an employee was injured in a fall of ground, and passed away in December 2010. An autopsy report from an independent pathologist is awaited to determine whether he succumbed to injuries as a result of this accident. These cases were thoroughly investigated, and the lessons learned incorporated into our safety programmes to create an injury-free work environment

ISO/OHSAS certification

In 2010, another operation obtained both international health and safety accreditation (OHSAS 18001) and environmental accreditation (ISO 14001). With all but three operations certified, the focus now shifts to maintaining and improving these standards.

Notably, Exxaro Reductants received integrated ISO and OHSAS accreditation for environment, risk and quality standards. While ISO 14001 (environment) and OHSAS 18001 (occupational health and safety) are corporate requirements, the Reductants team believed it was equally important to be accredited to the ISO 9001 (quality) standard. This was a singular achievement, given that plant commissioning occurred in parallel with accreditation processes.

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