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Safety, health and environment

Managing safety, health and environment (SHE) is central to the success of our business and, accordingly,
the potential for SHE risks and establishing suitable mitigation measures are integral to our journey towards zero harm. As part of the recent merger process, a SHE integration project was launched at the beginning of 2007, resulting in a new vision and strategy.

Our SHE vision, leading the way to zero harm, is underpinned by six key principles (figure A) and an evolving
strategy for the next five years. To ensure that all aspects of SHE are implemented equitably, the new strategy has focused plans for safety, health and hygiene and environment, each with clear goals and timelines.

The overall responsibility for monitoring safety, health and environmental performance rests with the Exxaro
board, exercised through the SHE committee and representative consulting forums at corporate level and
each division. A number of SHE-related internal and external audits are conducted annually to assure the board
that policies, standards and procedures are implemented at operational level. To comply with all relevant
SHE management standards and legislation, the group aims for high standards of safety, health and environmental performance. We aim to continuously improve SHE management systems in all operations as an integral part of our commitment to run a responsible business and accelerate sustainable development.

The integration project has also given us an opportunity to:

Determine Exxaro’s SHE risk profile
Identify best practice from the SHE programmes of the former Kumba Resources and Eyesizwe Coal
Integrate SHE programmes from these companies
Develop supporting systems and procedures in line with our strategy
Set common SHE standards and adapt systems and processes
Provide appropriate skills, governance structures and resources for SHE functions
Establish integrated monitoring and auditing protocols.

Developed in consultation with relevant stakeholders, the aim of the new SHE programme, standards and protocols is primarily to:

Provide an integrated risk-based SHE management system consistent with national legislation
Ensure the progressive development and implementation of more specific and detailed SHE management systems at all levels of Exxaro operations
Provide a framework for the implementation of integrated safety, health and environmental compliance audits and reporting
Provide performance criteria against which SHE management systems across Exxaro business units
can be measured
Provide a platform for continuous improvement.

Compliance management is central to good governance and in many ways gives us the ‘licence’ to continue
to operate. Having noted the need to ensure that our compliance processes are under control, we have established a corporate SHE compliance management department which assists in:

Implementing an ongoing assessment and review of the impact of existing and new legislation
Formulating an Exxaro-wide compliance framework to manage SHE risks, ensure a strong compliance culture and integrate legal compliance requirements into business processes
Coordinate integrated compliance monitoring and reporting.

Graph

FIGURE A: SHE VISION “LEADING THE WAY TO ZERO HARM”

This function complements the activities of corporate SHE technical advisers to provide management and the
executive with confirmation that business units are aware of their SHE risks, are managing these risks and taking due consideration of risks when business decisions are made.

Awareness

As part of our awareness and continuous improvement programme, in November 2007 we organised and
sponsored a biennial industry-wide SHE conference. This was the fourth such conference where industry
stakeholders, our management team and employees could interact to advance SHE objectives across our group, share experiences and examine best practices on particular challenges. The 2007 SHE conference focused particularly on environmental challenges and opportunities the company faces regularly.

SAFETY

Exxaro believes achieving zero injuries is possible by applying our management protocols, programmes and
systems.

Key risks to meeting this target are the high number of incidents relating to vehicle safety and energy and machinery isolation as well as general lack of risk awareness and discipline at all levels.
To address these risks, Exxaro has embarked on a number of initiatives. The I Care Fatal Risk Controls are being relaunched at all our sites to ensure special emphasis on the risks responsible for fatalities at Exxaro and the preventative measures in place to manage these risks better. Linking into this drive, Exxaro has also revised its HIRA (hazard identification and risk assessment) standard to ensure a higher level of risk identification and mitigation.

The vehicle safety standard at Exxaro has also been revised, setting a minimum standard with which all vehicles should comply to operate on company property or be used for company business.

Exxaro has also embarked on a formal ‘visible felt leadership’ programme at all business units to ensure improved communication and understanding of key safety risks between management and employees with the main aim of improving risk awareness and proactively addressing and mitigating safety risks on the floor
before incidents occur.

Although the fatality frequency rate per million man-hours worked improved from 0.18 in 2006 to 0.14 in 2007 (figure B), it is still too high as any fatality is regarded as unacceptable. Regrettably, and despite excellent safety achievements at several mines, we lost five colleagues during the reporting period. Two fatalities occurred in separate incidents at Grootegeluk, one in January and the other in November. One fatality
occurred at Rosh Pinah in March, another at Matla in May and the third at North Block Complex in December. Thorough investigations were conducted in all cases and lessons learned from each incident have been incorporated into our ongoing safety programmes focused on an injury-free work environment.

Although there has been constant improvement in the lost-time injury frequency rate (LTIFR) over recent years (figure C), improvements have fallen short of targets.

Exxaro has set a target of zero fatalities and an LTIFR of 0,21 for 2008, which is a reduction of 30% on the LTIFR target set for 2007. Although we have not met the target for 2007, we are confident that through renewed focus and committed management and employees, we will reach our goal. The safety of our people is a cornerstone of our business and, by making this target a collective responsibility, we will reach and sustain it sooner.

Note: Exxaro is standardising reporting on man-hours and lost-time injuries across the group.

Figure B: Fatality-frequency rate per 100 000 man-hours: 2007	Figure C: Lost-time injury frequency rate per 200 000 man-hours: 2007

HEALTH AND HYGIENE

Exxaro is committed to reducing employee exposures to workplace health risks. Our group also continues to respond to the major challenge of HIV/Aids and has committed additional resources for managing this pandemic in the workplace.

Key risks

The major occupational hygiene risks are noise, dust and thermal stress. Other risks include gases and illumination. The risks vary according to the different commodities and by type of operation such as underground mine, opencast pit, or plant.

Business units identify and rank their risks; and have a hygiene surveillance programme to quantify risks. Workplace exposures are linked to individuals, and medical surveillance is conducted on the basis of these exposures. For HIV/Aids, a disease management programme is in place.

During 2007, we began a process to revise our corporate standards to manage identified risks better. These include the hearing-conservation and dust-control programmes. We are also improving management standards for emergency response; hazardous chemicals; tuberculosis and reporting. The review of our management standard on reporting for the group includes the planned roll-out of an electronic system for ensuring the timely reporting of health and hygiene incidents; tracking outdated and outstanding medical certificates as well as referrals.

Occupational diseases

Figure D shows the number of occupational diseases accepted for compensation over the last five years:
125 cases of noise-induced hearing loss (NIHL), 65 cases of occupational tuberculosis (TB) and 17 of pneumoconiosis. In 2007, there were seven cases of occupational diseases accepted for compensation: three cases of NIHL; two of pneumoconiosis and two of occupational TB. This was a decrease on the total number of accepted occupational diseases from 2006. The most significant decrease was in NIHL from 21 accepted cases in 2006 to three in 2007, suggesting that the implementation of the hearing conservation programme
is beginning to have a positive impact.

Monitoring the reporting process to ensure that all incidents have been dealt with will be the major focus during 2008.

Meeting mining sector targets

Exxaro is a signatory to a letter of commitment for meeting industry health and safety targets by 2013. The targets for occupational health and hygiene are to eliminate NIHL and silicosis by 2013, and Exxaro is committed to achieving these goals.

Noise areas have been identified and zoned as have the nature of operations and activities that pose the greatest exposure to noise. Baseline audiograms of employees were conducted by 2005 as per legislative requirements and training and awareness programmes are in place. Control measures include substitution,
engineering, administration, the use of personal protective equipment (PPE), and personal exposure monitoring. Similarly, areas where there is dust exposure have been demarcated; dust suppression measures put in place; PPE provided; dust levels and employee exposure monitored. In addition, employees undergo periodic medical examinations to monitor their health.

During 2007, an initial assessment to determine health and hygiene performance against mining sector targets was undertaken. This was a company-wide review of the implementation of the hearing-conservation and dust-control programmes to identify any areas of non-compliance. A company strategy to meet sector
targets was developed. This includes correction of identified gaps; compliance monitoring of business units’ noise and dust control programmes; and communicating awareness messages to employees on the importance of complying with these targets. Each business unit has developed its own implementation commitments and these will be tracked within the group to ensure Exxaro meets these targets.

HIV/Aids

Exxaro has allocated specific resources aimed at minimising the impact of HIV/Aids on its workforce. The programme includes:

Confidential testing and voluntary counselling
Access to a 24-hour helpline for information
Prophylactic treatment for employees who suspect they may have been exposed to HIV/Aids
Information for HIV/Aids patients on remaining healthy for as long as possible
Access to antiretroviral medication
Fair treatment and no discrimination
Peer educators at business units to inform and educate colleagues.

During 2007, 1 889 individuals in the group were trained at awareness sessions. Of these, 1 784 people participated in voluntary counselling and testing (VCT) and the 145 individuals who tested positive were enrolled on the disease management programme.

The cumulative number of individuals tested through the VCT programme since inception is 3 542 or 30% of our employees. Of these, 498 are on the disease management programme. Figure E shows the number of people on ART and those who have not yet started treatment as well as those who have left the programme
due to retirement, incapacitation or death.

During 2008, the focus will be to:

Encourage employees who have never tested for HIV to test; and those who have
already tested to continue participating in VCT.
Focus on employee knowledge of HIV/Aids and destigmatisation.

ENVIRONMENTAL MANAGEMENT

Exxaro is committed to conserving natural resources and reducing the environmental burden of pollutants
to the natural environment by:

Complying with all applicable environmental legislation
Developing innovative policies and programmes for addressing environmental impacts.

One of the measures employed has been the use of a dedicated in-house environmental management
specialist unit which was created as part of the SHE organisational structure to address environmental risks and impacts to enhance environmental legal compliance. This unit’s members include an air quality specialist, hydrologist, ecologist, environmental resource accountant, environmental compliance specialist, environmental impact assessment specialist and a geohydrologist.

Key risk areas and management activities

Key environmental risks emanating from our mining activities are:

Water and waste management
Air quality and climate change
Biodiversity and land management
Rehabilitation environmental liability management.

Water and waste management

Exxaro’s approach to water management is guided by South African environmental legislation (National Environmental Management Act, Minerals and Petroleum Resources Management Act, National Water Management Act). It is primarily focused on sustainable use of water, pollution control and avoidance.

Exxaro’s policy is to use appropriate measures at all operations to meet the intent of the law through site-specific water management plans. Our water treatment facilities ensure that water used in our operations meets legislated quality standards for all receiving environments or discharge areas.

Exxaro is also actively participating in industry investigations that will inform the overall direction of a water-management master plan and future water treatment plant investments. These include plants treating discharged mine water to meet industrial and potable water standards. A portion of the treatment costs will be recouped from benefiting municipalities that in turn supply this water to general users.

As Exxaro’s business activities are spread over several commodities requiring various different mining, beneficiation and disposal activities, the associated risksare diverse. The key challenges at present in this field are:

Post-closure water management
Identification, separation and management of clean and dirty water areas
Potential of excessive recharge to mine workings
Groundwater contamination from various waste sources.

To manage these risks the following actions were taken:

Development and communication of a dedicated integrated water management policy
Baseline assessments
Integrated water and waste management plans completed for New Clydesdale and Leeuwpan. Plans in progress for Matla, char plant and Glen Douglas. Grootegeluk, Zincor, Tshikondeni and Inyanda already have plans in place.

Business operation		Revised water balance 2007
Matla		In progress
Grootegeluk		In place
Arnot		No
New Clydesdale		Yes
Leeuwpan		Yes
Zincor		In place
Char plant		In progress
KZN Sands – Hillendale		No
North Block Complex – Strathrae		No
Glen Douglas		In progress
Tshikondeni		In place
Rosh Pinah		Yes
Inyanda		In place
North Block Complex – Glisa		Yes (Eerstelingsfontein)
KZN Sands – Central processing complex		No

Actual data are set out on.

Developing and updating water and salt balances at operational units is a fundamental water management tool to ensure the correct strategies and decisions throughout the integrated water and waste management plans.

Air quality management

Legal compliance and natural ecosystem protection are the focus of Exxaro’s air quality management activities. Due to the nature of Exxaro’s business practices, certain activities present challenges in terms of adequate air quality management, for example, emissions generated from:

Blasting coal seams
Spontaneous combustion of discard dumps
Ore processing activities
Wind erosion of exposed operational areas
Vehicular dust from unpaved operational roads.

Air Quality

Figure F: Air quality management system

Air quality management activities in Exxaro aim to ensure that:

all business units and subsidiaries protect the environment through reasonable measures to prevent the emission of criteria air pollutants
the quality of ambient air in the immediate receiving environment is not adversely affected by emission of air pollutants directly from operations.

To minimise the risks posed by our mining processes, Exxaro has adopted an air quality management framework which is informed by the South African National Environmental Management Air Quality Act and guidelines recommended by the World Health Organisation. Figure F illustrates a systematic approach used by
business operations to identify key risk areas in terms of air emissions.

Based on the Exxaro air quality management framework, in 2007 more than 50% of business operations completed a detailed emissions inventory and accompanying dispersion models, with 90% of business operations monitoring ambient concentration of fallout dust from mining activities. Monitoring activities at business operations, where relevant, will be expanded to include smaller particle matter suspended in air.

Biodiversity management

The focus on conserving biodiversity becomes more important as the effect of global warming starts to impact on habitats and richness of global biodiversity. The National Environmental Management: Biodiversity Act (Act 20 of 2004) mainly provides for:

Management and conservation of South Africa’s biodiversity
Protection of species and ecosystems that warrant national protection
Sustainable use of our indigenous biological resources.

Exxaro owned and managed land has significant biodiversity due to the wide geographical distribution of its operations

Land management

Key risks
Land management ensures mitigation or prevention of various business-related risks including:

Safety risks relating to physical mining legacies on previously mined areas, ie inactive sites
Environmental risk assessments of all inactive sites
Settlement of disputes arising from illegal occupation of land, invasion prohibition
Participating in government land claims involving Exxaro properties
Applying best practices in reducing land holding cost to Exxaro
Contract management and leases on Exxaro’s non-mining properties
Involvement in social responsibility projects and adherence to government’s objectives on social upliftment, wealth, land and mineral rights distribution.

Land management, as an integral part of the SHE portfolio, is primarily involved with managing land under Exxaro’s control. Our approach is ‘cradle to grave’ management, encompassing acquisition, exploitation, rehabilitation and disposal of land. Land management also forms part of the integrated SHE services offered
to business units including expertise, advice, monitoring all data and specialist environmental studies. The land management team performs a specialist service for Exxaro in areas including:

Advice on land-use options
Land management (including conservation of land, natural resources and ecotourism)
Land disposal and land reform advice
Active participation in ongoing management of and advice throughout the life,
cycle of the mine
Risk mitigation – including land claims, settlement disputes and coordination of safety risks, response measures associated with land under management.

An example of Exxaro’s successful approach and responsible custodianship in managing land includes the endangered black rhino and rare cheetah in the conservation project at Manketti Game Reserve adjacent to Grootegeluk mine.

The planned introduction of elephant into Manketti in 2008, and the synergy with the mine and local community, will transform this project into a conservation icon and position Exxaro as the leader among responsible green mining companies.

CONTACT
Dr Nombasa Tsengwa
General Manager Safety, Health and Environment
Tel: +27 12 307 4316
Fax: +27 13 307 5329

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