Socio-economic development

Disclosure on management approach

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.  

• 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

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.  

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.  

• 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

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

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.  

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