Kumba Annual Report 2003

SAFETY, HEALTH AND ENVIRONMENTAL MANAGEMENT (SHE)

Kumba is active in mining and mineral-related operations and, by complying with all applicable SHE legislation and relevant international obligations, is committed to consult with stakeholders, achieve high standards of environmental performance, implement internationally-accepted standards for occupational health, safety and environmental management and continuously improve operations regarding safety, health and environmental performance and SHE management systems.

The safety and health of our employees and the responsible management of the natural resources form an integral part of our commitment to sustainable development.

Overall responsibility for SHE monitoring and performance rests with the Kumba board, exercised through the SHE committee and consulting forums at corporate level and at each business unit. SHE policies and management standards are revised bi-annually with inputs from all relevant stakeholders.

During the latter part of the year, the responsibility for leadership and direction of quality management processes was added to the safety, health and environmental management of Kumba.

SAFETY AND HEALTH

Kumba aspires to a zero injury rate at all its activities and the four fatal accidents reported for the year are unacceptable. The following safety targets have been set for the company for the 2004 financial year:

zero fatalities
a 30% improvement on the lost day injury frequency rate (LDIFR)
a 30% improvement in the severity rate of injuries

Incidents and statistics are reported to the relevant authorities in accordance with the prescribed standards. The indicators used are aligned with the industry initiative for uniform parameters.

Although the LDIFR of 3,07 for 2003 is a slight improvement from the previous year and compares well with the best in the South African mining industry, it falls short of the target of 2,5 that was set for the financial year.

In health management, the focus is on hygiene monitoring and appropriate measures to reduce exposure levels, together with risk-driven medical surveillance to reduce reportable health cases.

The effect HIV/AIDS might have on the incidence of occupational diseases is still unknown.

Of the 90 cases of occupational diseases reported for the year (comparably a mid to low aggregate), 57 were noise-induced hearing loss, seven were cases of tuberculosis and 26 were due to occupational-related lung diseases. Eight occupational diseases reported were accepted as compensatable diseases by the Compensation Commissioner.

The group makes every effort to keep disabled employees in service even if they are accommodated in alternative positions. Currently, the company employs 41 people with disabilities.

Legal assessment forms part of the ISO/OHSAS certification process and all business units established a legal register. No legal action for non-compliance occurred over the last financial year.

The SHE management process is based on sound risk management principles. Processes and working areas are broken down into units, where baseline risk assessments are followed by issue-based risk assessments. All operational teams are trained in applying risk assessment on new projects and tasks.

Control measures to reduce risk are implemented according to the following sequence:

Engineering design
Engineering control and safety devices
Warning devices
Administrative control (eg procedures, training and inspections)
Personal protective equipment.

Business unit	ISO 14001	OHSAS 18001
Sishen	Obtained	Obtained
Thabazimbi	June 2004	March 2004
Grootegeluk	December 2003	December 2003
Leeuwpan	December 2004	December 2004
Tshikondeni	December 2004	December 2004
Zincor	Obtained	December 2004
Rosh Pinah	June 2004	December 2003
Glen Douglas	June 2004	June 2004
Ferrosilicon	December 2004	December 2004

The target to have all operating business units’ safety and health management systems certified to the ISO 14001 and OHSAS 18001 standards was developed further with each unit’s own schedule and plan. The final target date is 30 December 2004. Sishen was the first business unit to achieve OHSAS 18001 certification.

The major risk areas for safety and health are:

Noise levels, which are reduced through engineering measures. Hearing protection is supplied where needed, supported by continuous medical surveillance.
Reducing dust levels at all operations. Dust monitoring programmes are in place at all operations and medical surveillance is done accordingly.
The risk of fall of ground exists at the two underground mines, Tshikondeni and Rosh Pinah. Well-established codes of practice are used together with comprehensive training.
At Zincor, risks associated with chemicals and fires are managed through codes of practice and special training.

The effective application of the Kumba incident investigation protocol, developed internally with the necessary training, will augment the focus on safety, health and environment disciplines.

ENVIRONMENT

Kumba’s environmental management policy demonstrates its commitment to actively caring for the environment and its resources at all our activities, acknowledging all stakeholders’ rights to a safe and healthy natural environment, for themselves and future generations. The group is committed to promoting good relationships and enhancing capacities of the local communities where it operates.

This year, the focus was on putting systems into operation to enable consolidation of environmental data and statistics on:

Land use
Energy use
Water consumption
Waste generation
Environmental incidents

Systems are being established for data collection and reporting so that the company can measure and analyse environmental data and consumption of resources for every business unit and activity, in line with internationally accepted norms.

The objective is to establish application, consumption and generate baselines throughout the group during the 2004 financial year. The business units will further establish verifiable data and statistics in the coming year. This will lead to the development of further environmental performance indicators that allow environmental performance to be compared year on year, and with best practice standards.

The focus will be expanded to include management of air quality and greenhouse gases.

The table opposite reflects indicators of electricity, diesel oil and water consumption for the year. Comparable information for previous years is not available.

ELECTRICITY, DIESEL OIL AND WATER CONSUMPTION


Environmental indicator 2003
Actual (1 July 2002 – 30 June 2003)
	Electricity	Diesel oil	Water used	Product
Business unit	Gj/t product	kl/t product	m³/t product	kt
Iron ore
Sishen	38 632	2 186	159 628	26 169
Thabazimbi	56 226	3 063	671 787	2 389
Coal
Grootegeluk	49 010	940	203 437	16 178
Tshikondeni	322 332	4 162	2 434 058	377
Leeuwpan	42 562	3 805	436 813	1 456
Base metals
Zincor	16 560 000	12 572	13 845 621	115*
Rosh Pinah	1 337 115	14 665	10 173 080	113
Heavy minerals
Ticor SA	622 896	218	22 317 073	164
Industrial minerals
Glen Douglas	30 524	1 518	1 124 390	1 327
* Zinc production only (excluding acid production of 187 000t)

	Land	Land	Land	Land	General	Hazardous	Total
	controlled¹	authorised²	disturbed	rehabilitated	waste	waste	tons mined
Business unit	ha	ha	ha	ha	t	t	kt
Iron ore
Sishen	33 145	26 274	4 171	0	160	55	97 927
Thabazimbi	10 730	9 874	n/a	n/a	n/a	n/a	35 819
Coal
Grootegeluk	18 294	6 525	684	0	n/a	n/a	52 525
Tshikondeni	22 027	22 027	4 616	20	6	10	750
Leeuwpan	2 646	2 646	99	19	52	1	12 359
Hlobane	5 359	5 359	4 950	4 200	4	0	N/A
Base metals
Zincor	200	200	200	0	2,210	118	235
Rosh Pinah	1 221	1 221	283	0	n/a	30	1 083
Heavy minerals
Ticor SA	1 352	1 352	344	0	224	12	7 426
Industrial minerals
Glen Douglas	472	400	350	25	216	0	2 827

1.	Land controlled: Area of land under the control of the company/entity.
2.	Land authorised: Area of land that is under a mining authorisation (mines) or permit (heavy industry).

ENVIRONMENTAL RISKS

Formal environmental risk assessments were performed at all business units. The highest environmental risks for the open-cast mines are dust generation, air pollution, mine waste dump rehabilitation and groundwater pollution.

At the Sishen mine, the effect of dewatering at the mine on the groundwater tables of adjacent farms poses a risk of water shortages.

Noise and vibration levels at the Glen Douglas mine and the Leeuwpan mine, although within acceptable levels, may have residential complaints as a consequence.

Both underground mining operations, Tshikondeni and Rosh Pinah, indicate a risk in the disposal of process water. Rosh Pinah has identified, as a potential risk, lead pollution along the transport route of the lead concentrate.

At Zincor, the highest potential risks are groundwater pollution, air pollution and surface water management.

All risks are being managed as high priority through proper environmental management actions and follow-up risk assessments will be performed.

ENVIRONMENTAL MANAGEMENT SYSTEMS

Kumba has chosen the ISO 14001 internationally accepted standard for the group’s environmental management systems.

Zincor obtained ISO 14001 certification during the year under review. Together with Sishen, two of the nine business units of the company now have ISO 14001 certification. All other units are scheduled for certification by December 2004.

REHABILITATION

Major mine closure rehabilitation activities are being performed at the Hlobane and Durnacol collieries in KwaZulu-Natal.

The freshwater dam wall and spillway at Hlobane was redesigned and upgraded to ensure dam safety and to protect the dam for the community. Surface fractures are being sealed to prevent clean water from entering old underground mine workings. This forms part of an integrated water management plan that is being implemented to manage decanting mine water. Silviculture practices have been improved to enhance the rehabilitation of land disturbed by mining.

At Durnacol, final closure rehabilitation is progressing. Demolition of the mining infrastructure commenced during the year. Extensive reshaping of a coal discard dump is under way. Slimes dams are being transferred to the dump and cleaned up to reduce the footprint. Maintenance of buildings and infrastructure required in the end-use plan is being maintained while community structures have been put in place to transfer properties and rights to the local community.

All mining operations have updated the estimated final closure liabilities as well as immediate closure liabilities (if applicable) during the year. Provision for the cost of closure and post-closure liabilities for all mines is managed through an independent rehabilitation trust fund with an investment balance of R143 million at year end. In addition, the group had raised provisions totalling R362 million at year end.

ENVIRONMENTAL PERFORMANCE

Close attention is being directed towards the development and implementation of proper environmental management systems at all business units which will conform with internationally-accepted standards.

Iron ore

The land area controlled by Sishen is 33 200ha, of which 4 200ha are disturbed by mining activities. As a result of quality control for the specifications of final products, many ore faces are required to be exposed and therefore negligible final rehabilitation can be undertaken at this stage of the mining programme.

Several environmental management projects are being implemented at Sishen to comply with the environmental management programme report.

The Sishen South project is in the feasibility phase at present. During the pre-feasibility study, ecologically-sensitive areas were identified. The pans in the areas are part of the Western Ghaap Panveld ecosystem – a general habitat that occurred over a very limited area and, as such, represented a unique setting. Initial investigations indicated that less than 60% of the original ecosystem remains in relatively good condition. The impact of the project would have reduced this to less than 20%. A twofold study was initiated – the primary objective was the optimisation of the mine plan to preserve as many pans as possible, and a secondary phase focused on a more accurate delineation of the ecosystem. As a result, the revised mine plan would leave more than 40% of the original ecosystem intact. Additional work is under way to identify areas for dedicated future conservation of the Western Ghaap Panveld.

There have been no significant environmental incidents at any of the iron ore operations. No fines have been imposed by any environmental regulatory authority.

Coal

At all three mines, regular contact with interested and affected parties takes place, with particular focus at Tshikondeni, which is partially inside a protected area.

At the Hlobane colliery, on closure, 4 200ha of the 5 359ha have been rehabilitated while final closure activities continue.

There have been no significant environmental incidents at any of the coal operations. No fines have been imposed by any environmental regulatory authority.

Base metals

The Zincor refinery annually generates 2 210 tonnes of general domestic waste and 120 tonnes of hazardous waste. Hazardous waste, such as cadmium cake, is being partially stored using the permitted method while most of it is shipped to customers in east Asia observing the Basel Convention requirements.

Being next to the Blesbokspruit (a Ramsar site), Zincor is managing and contributing to extensive bio-monitoring on the borders of the plant area to manage potential impacts immediately.

Zincor continuously monitors sulphur dioxide concentrations in stack emissions, with the purpose of making data available to the general public through an environmental room. Complaints from the public are handled through this facility.

At Rosh Pinah, studies are being conducted to determine whether the transportation of lead concentrate could cause pollution.

Prior to the investment, detailed environmental management evaluations and legislation studies were conducted at the zinc refinery company in Hongye, China, to identify major environmental risks and liabilities and to assess the capacity and capabilities to manage those risks properly.

There have been no significant environmental incidents at any of the base metals operations. No fines have been imposed for non-compliance with any relevant international, national, regional or local regulations in respect of environmental matters.

Heavy minerals

At the heavy minerals mining and smelting company, Ticor SA, operating near Empangeni in KwaZulu-Natal, the area under control is
1 352ha, of which 344ha are disturbed by mining or industrial activities.

Kumba aims to establish an industry benchmark in the heavy minerals industry, and a set of performance indicators has been developed to measure and drive progress in the critical area of environmental management, including rehabilitation.

Apart from upgrading the environmental management organisational structure, the environmental programmes have been reviewed during the year, namely air quality management, water quality management, environmental awareness training, internal auditing and environmental incident reporting.

One environmental incident (overflow of storm water) that was required to be reported to the relevant regulator has been classified as a significant environmental incident. As a consequence of a heavy downpour during a thunderstorm in July 2002, the water in the stormwater dam at Hillendale mine overflowed into the neighbouring residential area. This resulted in claims for compensation for damage caused. The necessary steps and actions have been taken to prevent further incidents.

Industrial minerals

The land area controlled by the Glen Douglas dolomite mine is 472ha of which 350ha are disturbed by mining activities – 25ha have been rehabilitated.

Complaints relating to dust and noise impacts were resolved through the well-established and developed interested-and-affected-party forum that meets regularly.

There have been no significant environmental incidents at any of the industrial minerals operations. No fines have been imposed by any environmental regulatory authority.

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