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Socio-economic development


Disclosure on management approach

Communities
Exxaro’s community activities are directly linked to its strategy by ensuring the group’s sustainability, and protecting and building its reputation by fostering mutually beneficial relationships with local communities. A local community is defined as a community in the immediate area of Exxaro’s operations and from labour-sending areas.  

In considering any project, our overarching objective is to alleviate poverty and improve the life of identified communities. This is even more important given the rural location of most of our operations - areas characterised by the level of unemployment and relevant development needs.  

Socio-economic development projects refer to the application of funds, goods and labour to provide sustainable services for the local community, which can be owned, managed and maintained by that community. Unlike a donation, Exxaro’s role in these projects extends beyond providing funds to active involvement in applying these funds, as well as a project management role.   

In South Africa, all mining groups are required to have social and labour plans supporting the key provisions of the mining charter. Exxaro’s social and labour plan strategy describes each plan as a set of initiatives designed to minimise any negative social impacts and maximise the positive social opportunities of mining operations. The objective is to ensure real sustainable development and growth in communities.  

An important element in Exxaro’s approach is generating new non-mining economic opportunities within identified local communities, particularly for local BEE companies and SMEs owned by disadvantaged groups. Exxaro’s role is to ensure that measures are in place to support the establishment and growth of SMEs and to develop effective linkages with funded, accredited training and development institutions.  

In terms of socio-economic development, Exxaro implements social responsibility strategies that reflect ongoing commitment from the company via the Exxaro Chairman’s Fund and Exxaro Foundation, aimed at entrenching the image of Exxaro as a caring corporate citizen in the community.   

Exxaro encourages volunteerism and participation in local economic development projects to create of a culture of socially conscious employees.  

Focus areas

Exxaro’s sustainable development activities, including socio-economic initiatives and donations, are focused on areas that are relevant and strategic to South Africa’s socio-economic development. Accordingly, we are currently focusing on:
  • Formal education
  • Skills development and capacity building
  • Enterprise development
  • Health and welfare
  • Environment
  • Infrastructure (related to socio-economic projects)
  • Agriculture
  • Tourism
  • Sport and recreation.

In implementing our strategy, we aim to integrate social sustainability into our business activities, creating public-private partnerships (PPPs) where possible to extend the impact. We accept that the sustainability of host communities extends beyond the finite time frames associated with our operations, and this is an integral part of the closure plan for each mine.

Although not all our social and labour plans have been approved by the Department of Mineral Resources, those already in place are mainly implemented according to set targets. These plans focus on communities close to our operations, as well as labour-sending areas, to ensure they benefit from the mine’s presence in multiple ways.

Exxaro’s policy is to actively recruit labour from local communities wherever possible, and training initiatives focus on developing the skills of community members to fulfil the group’s requirements.

In 2010, Exxaro allocated some R38,6 million to socio-economic development projects currently under way, corporate projects and other initiatives. This includes some discretionary donations made by the corporate centre and individual business units. Most of these initiatives stem from identified community needs and are considered against the local municipality’s integrated development plan.

Exxaro Chairman’s Fund and Exxaro Foundation

Funds allocated 1 January – 31 December 2010: R38,6 million

Monitoring and evaluation

We are currently implementing a monitoring and evaluation system to measure progress and identify challenges. This system is also aligned with Exxaro’s internal socio-economic development technology platform. It will be fully operational by November 2011.

Project implementation

Exxaro’s five-year socio-economic development projects focus on enterprise development, infrastructure development and poverty alleviation as requested by the Department of Mineral Resources.

In terms of the group’s social and labour plans, Exxaro has 55 sustainable projects unfolding over a five-year period. These are being implemented in conjunction with all relevant stakeholders to ensure a collaborative approach. The number of jobs being created through these projects exceeds 670, indirectly benefiting over 11 400 people.

Exxaro also contributed more than R16 million in 2010 via corporate projects and commitments, including university chairs, skills development and membership fees to national and international bodies such as the National Business Initiative, WWF and the Peace Parks Foundation.

Some of Exxaro’s local economic development projects are detailed as case studies.

Case study: Agri-business takes root at Grootegeluk
At Grootegeluk, the success of a rural community is as integral to the mine as its operations. Grootegeluk has partnered with the Lephalale Agricultural Corridor (LAC) project - a comprehensive agri-business initiative that aims to alleviate poverty by linking the burgeoning mining economy in Lephalale with the poorer marginalised economy of the broader region. Our goal is to establish the local rural villages of Seleka, Shongoane and Langa as sustainable food sources that can supply both local and international markets. Good progress is being made:
  • A new pump and water reservoir have been installed to draw and store water from the nearby river
  • Main-line irrigation has been set up both at the reservoir and on selected areas of farming ground. This system is designed to best suit the water needs of the area and type of crops that will be grown - instead of irrigating upwards, the water goes directly into the ground
  • Storage areas are being built in the communities to hold agricultural produce.  
  Besides this infrastructure, the LAC will also help these communities sell their products to industries for catering purposes, as well as to local supermarkets and the community at large. The traditional leader for the area, Queen Langa, is exceptionally pleased with the progress on this project since Grootegeluk came on board.   

Case study - Zikulise skills training and SME development centre

The Zikulise centre was officially opened in November 2007 as a partnership project between Exxaro KZN Sands, uMhlathuze Municipality, NGO Zikulise Community Upliftment and the European Union.  

This project will be worth R6 million on completion and will offer skills training in various areas including sewing, beading, baking, pottery, and handcrafted jewellery. It also caters for blind people who are trained by the Blind Society of KZN in weaving baskets and cane furniture production. Off-site training in bricklaying, plumbing, plastering and carpentry will be offered.  

Five SME companies have been established to date, with three currently moving through the incubation phase. Established SMEs are mentored by the centre for three months after completing skills and business training to ensure their sustainability. To date, 1 800 people from the community have been trained by the centre.  

The centre also promises to become an important tourist attraction with visitors able to view training sessions and buy products from trainees. An attractive cafeteria, where bakery trainees also learn more about hospitality training, gives visitors to chance to enjoy unique African baking and delicacies like home-made ginger beer. Once a month, a morning market enables all SMEs to market their products at the centre.  

Zikulise is rapidly becoming a prime training centre, concentrated on two of government’s main focus areas in alleviating poverty, skills training and enterprise development.  


Case study - Innovative beneficiation at Namakwa Sands
Namakwa Sands’ mine at Brand-se-Baai is like a huge sandpit next to the Atlantic Ocean. But this sandpit provides a livelihood for over 1 000 employees and their families now and 20 years into the future. The sustainability of this deposit is therefore a key focus area for the Namakwa Sands geology and planning departments.  

Traditionally, mining and beneficiation at Namakwa Sands included high-grade zones and low-grade zones, also known as waste. But the mining method resulted in erratic feed to the primary concentration plants, which affected recovery of the revenue-generating minerals.  

The geology department recently instituted a grade-control programme to stabilise feed to the plants by cutting out waste material and blending sand from different pits. Using technology, an innovative method was developed to communicate this to the mining department and to brief them on their daily targets, thus ensuring the sustainability of the deposit for many years to come.  

Case study: Inyanda supports infrastructure development

Over the last three years, Inyanda has spent R3,3 million to maintain the 11km stretch of Zaaihoek Road that leads to the mine from Oosbank siding. The most recent upgrades were completed in October, and maintenance will continue in 2011.  

Zaaihoek Road is an important link for farming and Klarinet’s developing communities, being one of the access roads on the north-eastern side leading to the town of eMalahleni (formerly Witbank). The road is also shared by school buses and other mining houses. Employees of Inyanda Coal use the road to get to work and the mine transports coal products to local and overseas markets. Prior to Inyanda assuming this maintenance responsibility, the road was in serious disrepair.  

 

Case study: Arnot hydroponics project
This 10-hectare project is in the Steve Tshwete municipal area, in Mpumalanga. It involves 21 local community members, who have been trained in open-field vegetable production. Arnot Coal is assisting beneficiaries in all phases to achieve the following objectives:
  • Build a sustainable BEE farming business
  • Create jobs for 21 community members
  • Alleviate poverty
  • Contribute to reforming agribusiness in the municipal area
  • Develop skills for a number of prospective farmers from previously disadvantaged communities  

The best site was identified by Arnot’s stakeholders forum, including representatives from the local municipality, an agricultural specialist from the Department of Agriculture, Forestry and Fisheries, and the National Union of Mineworkers.   

The mine provides funding and ongoing quality control, with appropriate employees using their time and skills to assist in building capacity. The mine’s sustainable development manager is overseeing the project daily and is responsible for ensuring that the monitoring and evaluation system is in place.  

Beneficiaries growing their first vegetables And selling their produce 

Case study – Official opening of Lepharo incubation project
Lepharo, an incubation project registered as a section 21 company (in the name of Seda Ekurhuleni Base Metals Incubator) was officially opened by the executive mayor of Ekurhuleni, Clr Mondli Gungubele, on 23 February 2011. In his address, the mayor applauded the alignment with government’s drive to create jobs, skills development and reduce reliance on hand-outs.  

The idea of establishing a base metals incubator to develop SMMEs in Ekurhuleni was conceived as an Exxaro and Impala Refineries initiative in 2003. The reasoning was simple: there was no downstream beneficiation business in base metals, particularly in zinc and copper, for small entrepreneurs. Traditionally, this segment was the domain of large companies.  

A feasibility study on this initiative was conducted by IZASA and results showed that sustainable SMMEs in sheet-metal work and spin-casting using base metals could be established.   

An expression of interest was submitted to GODISA (now Seda Technology Programme) for funding to start a base metals incubator in Ekurhuleni. GODISA was the main funder of incubators in South Africa at the time.  

GODISA accepted our expression of interest and funds were raised among the partners (Seda Technology Programme, Exxaro, Impala Refineries, Ekurhuleni Municipality) to establish and manage the centre.  

The facilities were completed in 2009 and all machinery installed in 2010.   

There are two main businesses being incubated in this centre. These are spin-casting manufacturing keyholders, tin/bottle openers, medals, name tags, plate tags, trophies, etc, and sheet-metal work manufacturing gutters, down pipes, roof sheets, fascia boards, welding, etc. Two enterprises, Finecast and Medu Gutters and Installations, have graduated and are in business.  

View www.lepharo.co.za

Case study: Makuya farmers’ cooperative
Exxaro’s Tshikondeni mine is partnering with national, provincial and local authorities as well as development agencies to help local farmers implement better farming methods and grow lucerne for animal feed which will in turn produce better livestock.   

This R1,5 million project (Exxaro’s contribution) is expected to create 40 direct jobs, with 150 indirect project beneficiaries.   

During the year, work was started on the loading zones for the crush pens, which are now being constructed, and two boreholes sunk to produce 2 000 litres per day. The administration block and engine room were completed and Eskom will install electricity. The University of Venda is conducting research on the most suitable types of livestock to be farmed.  

Case study: Namakwa Sands making a difference
The Pholla Park project will bring electricity to around 400 households in Vredendal on South Africa’s west coast, benefiting some 1 600 people. This was part of a resettlement process in which informal housing was moved to designated areas and then connected to the electricity infrastructure, greatly improving the residents’ quality of life. In 2010, all 400 households were moved and the project completed two years ahead of schedule.  

Of the total project cost of R3,42 million, Namakwa Sands contributed R1,95 million. The costs saved by completing the project ahead of schedule will be allocated to other approved projects, with agreement from the Department of Mineral Resources.  

Pholla Park informal settlement - before   Newly constructed power lines  

Serviced stands to which dwellings were removed     New serviced plots with informal houses established  

 

 

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