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Our people

Disclosure on management approach

Exxaro’s approach to its people is guided by a comprehensive suite of policies that covers employment, labour/management relations, occupational health and safety, training and education, and diversity and equal opportunity.

For a number of reasons, South Africa is particularly challenged by the shortage of specific skills and a national plan is in place to address this. Known as critical or scarce competencies, attracting, retaining and developing these skills is a focal area for all mining companies and a competitive point of difference. Supported by the leading practices developed in recent years, Exxaro concentrates on exceeding compliance targets in South Africa by training and development to maximise individual potential, equality and safety in the workplace, meeting our employment equity targets and improving standards of living in our stakeholder communities. Collectively, our initiatives are also contributing to reducing the shortage of skills in our industry.

Exxaro follows a total remuneration approach with guaranteed and variable components. The group’s vision, mission, business strategy and culture drive this philosophy and strategy, in tandem with governance structures and external statutory regulations (SA Revenue Services, King III and IFRS II). The components include guaranteed pay, short-term performance incentives and long-term incentives such as share schemes and other benefits linked to longer-term targets to ensure sustainability. All components are benchmarked against the external market to ensure Exxaro remains competitive.

Wage agreements on remuneration are in place at all group employers, while formal processes determine remuneration for non-unionised employees. Six-monthly market surveys ensure total remuneration is market related.

At all levels, minimum conditions of employment exceed the requirements of South Africa’s Basic Conditions of Employment Act.

Through Exxaro’s human resource development policy, we aim to:

Develop and sustain core competencies and maximise human resources to meet the group’s strategic objectives and improve operational performance
Create a learning culture by assisting and facilitating the process in which employees and their dependants take responsibility for improving their own educational and competency levels, to the mutual benefit of the individual and the organisation
Ensure integration and uniformity in all learning and development processes by leveraging technologies
Support and reinforce our values through various learning and development initiatives
Ensure learning and development initiatives are career-focused and aligned with business objectives
Establish life-long learning as the major thrust of learning and development.

Diversity and equal opportunity

When we created Exxaro - the largest black-owned mining company in the country - we stated our intention of being the best example of how South African companies could and should be run. We made a commitment to our people to ensure their progress and to build the skills base we needed to fulfil our vision. Employment equity is just one of the ways in which we are doing this.

While employment equity is certainly a legal issue, with strict targets imposed by both the mining charter and the government’s black economic empowerment codes, for Exxaro it is also a moral imperative.

At the heart of our employment equity strategy are detailed plans developed by each business unit in consultation with its employees and unions. These are updated and progress reported to the board quarterly and government annually.

By following these plans, each unit ensures that recruitment and skills development are conducted responsibly, encouraging transformation without affecting existing positions in the company. Each business unit has a formally assigned senior manager for employment equity, and an employment equity forum responsible for ensuring appropriate plans are developed, executed, monitored and communicated to employees.

Highlights

New R3 million assessment workshop opened in April at Grovos training centre in Lephalale
201 learners enrolled in 2010

Workforce

Exxaro’s staff complement was 10 937 at 31 December 2010, split into employees in bargaining units and the management and specialist category. In the bargaining units, there are 8 597 employees, with 1 913 employees in the management and specialist category. Regional distribution is shown below:


Region	Bargaining unit	Management and specialist category	Temporary employees	Total
Gauteng	880	611	151	1 642
KwaZulu-Natal	529	167	64	760
Limpopo	2 395	480	16	2 891
Mpumalanga	3 552	294	153	3 999
Western Cape	771	253	35	1 059
Namibia	469	98	8	575
Expatriates		4		4
Local nationals*	1	6		7
Total	8 597	1 913	427	10 937
* Australia office.

The HR management system introduced in March 2009 is providing the group with end-to-end business process integration, including e-learning and medical surveillance. This advanced environment has enhanced Exxaro’s ability to monitor, control and enforce compliance (medical and induction expiries, overtime and statutory leave). It also ensures accurate and timely business information, and effective forecasting of people-related information (employees and contracting workforce).

There were again no reported incidents of discrimination in the group during the year. As collective agreements determine specific guaranteed minimum salaries, there is no discrimination between salaries of men and women in this category. In the management and specialist category, all employees are on performance contracts and individual salaries are based on performance, not gender or race.

The breakdown of employees by gender and age is shown below.

Region
	Bargaining unit		Management and specialist category		Temporary employees
	Male	Female	Male	Female	Male	Female	Total
Gauteng	702	178	411	200	113	38	1 642
KwaZulu-Natal	466	63	134	33	41	23	760
Limpopo	2 144	251	416	64	8	8	2 891
Mpumalanga	3 110	442	250	44	113	40	3 999
Western Cape	673	98	204	49	25	10	1 059
Namibia	438	31	71	27	4	4	575
Expatriates			4				4
Local nationals		1	5	1			7
Total	7 533	1 064	1 495	418	304	123	10 937


	Bargaining unit						Management and special					Temporary employees
	18- 25	26- 35	36- 45	46- 55	56- 65	66- 68	18- 25	26- 35	36- 45	46- 55	56- 65	18- 25	26- 35	36- 45	46- 55	56- 65	66- 75	Total
Gauteng	38	237	249	239	117		20	157	213	161	60	62	22	25	13	25	4	1 642
KwaZulu-Natal	55	274	134	56	10		4	50	64	34	15	13	17	9	16	7	2	760
Limpopo	181	588	593	820	213		19	142	154	122	43	2	5	5	3	1		2 891
Mpumalanga	302	1 079	910	1 014	246	1	20	87	91	82	14	44	69	27	6	4	2	3 999
Western Cape	103	326	262	73	7		10	60	102	70	11	17	10	2	1	4	1	1 059
Namibia	51	193	110	88	27		1	33	31	29	4	2	3	3				575
Expatriates								2	2									4
Local nationals			1					1	4	1								7
Total	730	2 697	2 259	2 290	620	1	74	532	661	499	147	140	126	71	39	41	9	10 937

The challenge of finding suitable skills to staff new projects is ongoing. Exxaro has an active retention programme to maintain scarce skills that accounts for 5-6% of total payroll. Equally, considerable attention is given to building a sustainable talent pipeline of skills in critical or scarce competencies.

Employee turnover

Between 1 January and 31 December 2010, Exxaro’s average employee turnover rate was 6% (2009: 4%), primarily because of death, resignation, dismissal and disability. The turnover rate by employee group is show below:

Employment equity – occupational levels	Terminations January – December 2010
Employment equity – occupational levels	% of workforce	Number
Top management	0	0
Senior management	0	19
Professional, specialist and middle management	0	13
Skilled technical, academically qualified and junior management	1	74
Semi-skilled and discretionary decision making	5	475
Unskilled staff	0	21
	6	602

Breakdown of turnover statistics

Turnover numbers

Gender

Race

Reasons for terminations

Total

Absconded

Death

Disability

Dismissal

Resigned

Retired

Grand total

602

541

371

158

262

Turnover by age groups

Literacy and numeracy

Exxaro’s target is to provide all employees with qualifications below NQF level 1 the opportunity to become functionally literate. Exxaro employees with a qualification of below NQF level 1 now form 21% of the total workforce.

Exxaro offers sponsored, voluntary adult basic education and training (ABET) programmes at all commodity businesses and carries the full cost of these programmes. This initiative amounted to R1,9 million in 2010, a significant increase on the prior year (2009: R1,3 million).

To ensure informed decisions, candidates are screened and counselled, and an incentive scheme for each level completed encourages more employees to become functionally literate and numerate. Almost 1 200 employees have passed one or more ABET levels since the inception of this programme.

Percentage of employees with NQF
level 1 qualifications and above

In 2010, 180 employees completed various ABET levels successfully (14 passed ABET level 4, 53 passed level 3, 34 level 2, 59 level 1 and 20 pre-ABET). Over 150 non-Exxaro employees completed different ABET levels during the year.

Exxaro has accredited ABET training centres at Grootegeluk, Tshikondeni, Matla and Arnot mines. An ABET centre was launched at North Block Complex in September 2009, while Tshikondeni centre introduced full-time classes in 2010. The group’s annual training reports and workplace skills plans, approved by the MQA, reflects the number of ABET candidates completing various levels as well as those planned for the years ahead.

Functionally literate and numerate
	Number of people
	2010	2009
Total staff count	10 510*	11 180
Employees below ABET level 3	1 683	2 236
Employees on ABET level 3	511	345
Employees above ABET level 3	8 316	8 599
* Number of full-time employees.

Labour relations

Almost 70% of Exxaro’s employees are represented by affiliated unions, predominantly National Union of Mineworkers (NUM) (54,5%), and Solidarity (10,7%). Other recognised unions are Mineworkers Union of Namibia (MUN), National Union of Metalworkers in South Africa (NUMSA), and United Association of South Africa (UASA).

Negotiations for improved wages and conditions of employment are conducted in various in-house forums and through the Chamber of Mines.

In September 2010, members of NUM employed in the bargaining unit at Exxaro Sands operations in KwaZulu-Natal went on strike over a wage dispute. The strike was resolved after three weeks. Labour relations at all other Exxaro operations are managed in such a way that they facilitate progress towards amicable and mutually beneficial resolution.

Exxaro has a disciplinary code that is used when necessary. The code is based on the principle of fairness as required by labour law. Supervisors have the skill to implement the code.

Employee benefits

Through collective bargaining, full-time employees receive a range of benefits - many exceeding legislative stipulations for South Africa’s basic conditions of employment - including:

Retirement fund membership including contributions by the employer
Medical aid membership subsidised by the employer
Housing allowance and/or company accommodation
Guaranteed annual holiday bonuses/ 13th cheque for bargaining unit employees
Travel/commuting allowances
Standby and call-outs as well as payment for overtime worked
Annual leave, sick leave, maternity leave, family responsibility leave
On-target short-term incentive schemes
Long-term incentives - either based on share price appreciation or the achievement of longer-term targets aimed at sustainable operations.

Retirement and other benefits for all permanent employees are provided by independent defined contribution funds. The employer contribution to retirement funds in the group ranges from 10% to 18% of employee pensionable earnings, and is expensed as it occurs. All retirement funds are governed by the South African Pension Funds Act (1956), with no members on defined benefit plans.

In 2010, employees participating in Exxaro’s Mpower (empowerment scheme holding around 3% of Exxaro’s shares to broaden share participation among workers) received their fifth dividend payment. Since inception in November 2006, each of the Mpower beneficiaries (9 289 at year end) has received some R5 670 in dividends.

Housing

Exxaro continues to focus on home ownership. To comply with the mining charter and our own business needs, a new long-term housing strategy was developed two years ago.

In 2009, the group introduced a five-year subsidy for first-time homebuyers who are permanent employees. This was particularly welcome given the unprecedented scarcity of bank mortgage finance at that time. To date, 232 employees have benefited from this subsidy to make home-ownership more affordable.

While Exxaro’s housing policy focuses on home ownership, employees receive a housing or living-out allowance to assist them in obtaining accommodation. The total value of these allowances in 2010 was over R137 million.


	Number of employees
	2010	2009	2008
Home owners (bought company property)	948	929	822
Hostels	40	594	389
Single quarters	1 505	1 343	1 336
Rental and other	8 017	8 314	7 588
Total	10 510	11 180	10 135

The steady increase in the number of home owners reflects the group’s commitment to facilitating affordable ownership. At all operations, except Tshikondeni due to the current life of mine, there is only one person per room in the hostels; at Tshikondeni some rooms have two occupants.

Exxaro provides meals at Matla and Tshikondeni where the quality and nutritional value are determined by a dietician. Qualified staff continually monitor adherence to contractual obligations. Employees have accessible mechanisms to engage both management and suppliers on food issues.

Women in mining initiatives

Although Exxaro already exceeds prior mining charter targets of having 10% of the workforce staffed by women, attracting women to work in the group’s core business remains a focus area.

In 2010, five women aiming to become miners began their training programme at Tshikondeni. By the end of November, they had completed the first phase of their studies at the Colliery training college and will train for another 12 months on-site before qualifying as miners.

Human rights

Exxaro complies with labour legislation in South Africa and International Labour Organisation guidelines. As a signatory to the United Nations Global Compact, the group encourages freedom of association and collective bargaining, ensures child labour is not tolerated and that forced or compulsory labour is not practised.

Induction programmes educate employees about human rights. Policies on discrimination, harassment and racism are in place, as are structures to protect employees’ human rights in the workplace. All security personnel are fully trained after appointment on human rights aspects relevant to each operation. Refresher courses also cover human rights issues.

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