Material sustainability issues

 

The Group’s material sustainability issues, defined as those that are imperative for the Group to create and sustain value, have been identified and summarised, as follows:

SAFETY

Due to the nature of mining, safety remains one of our material strategic risks.

In an effort to inculcate a culture of zero harm, several initiatives were undertaken during the year. DuPont, experts in employee, contractor and process safety management assessed the Group’s safety management systems and undertook a cultural and technical assessment. The findings of this process indicated that despite a strong ‘team’ culture and top leadership commitment to safety, there were concerns regarding:
  • A lack of respect for the law, procedures and standards
  • Inadequate recognition for daily hazards in a mining operation
  • Ineffective behavioural-based safety audits
  • Poor change management controls.
As a result of these findings the Group resolved to step up its efforts to change safety behaviour at its operations and the safety strategy has been directed at three areas:
  • Closing the supervision gap by focusing on leadership training
  • Changing the Group’s safety culture by focusing on behaviour observation, reward and communication
  • Zero tolerance for non-compliance to safety rules.

EFFECTIVE PEOPLE

In addition to safety, two key challenges for the Group regarding its human capital are:
  • Ensuring the health of all employees and promoting their overall wellbeing
  • Addressing the critical skills gap within certain levels of the workforce.
The Group has embarked on a number of strategies to effectively address these issues which include:
  • A thorough understanding of the business requirements
  • An effective attraction and skills retention mechanism, particularly of critical skills
  • Implementing initiatives to manage employee health effectively
  • Providing training and development at all levels particularly at leadership and critical skills level
  • Ensuring the reward and remuneration system is in line with market-related trends
  • Providing career progression opportunities to our employees.

ENVIRONMENTAL

Implats recognises the importance of managing environmental issues which affect not only the natural ecosystems but also the communities in the vicinity of our operations.

The following environmental issues have been identified as critical to the sustainability of our business:
  • Ensuring compliance with current and proposed environmental legislation within a challenging regulatory framework
  • Responsible management of resources and achieving and maintaining ISO 14001 compliant environmental management systems across all Group operations
  • Developing and implementing a Group carbon management strategy and setting and achieving carbon emission targets
  • Optimising energy usage and ensuring security of supply
  • Ensuring access to water and the efficient and responsible management of this resource in a water-scarce environment
  • Preventing pollution by reducing and minimising emissions into land, air and water
  • Ensuring our land management and rehabilitation programme is in line with our environmental management plans and international best practice, to ensure sustainable closure
  • Developing an effective waste management strategy and ensuring that effective and compliant waste management systems are in place.

POLITICAL RISK AND SOCIETY

The Group wishes to retain its legal and social licence to operate. To achieve this we need to have a clear understanding of the legal requirements mandated by the countries in which we operate. We also need to actively manage and maintain sound relationships with the communities in which we operate.

Government policy

In South Africa the revised Mining Charter has sustainability, environmental responsibility and the empowerment of historically disadvantaged South Africans at its core. While there were no significant increases to the targets, the principles applied to compliance are more complex and will require significant work for organisations that have not integrated transformational targets and sustainability into their business practices. The Group is well positioned to meet the requirements of the revised Mining Charter by the target date of 2014, as most of these targets have already been achieved.

Our transformational scorecard is depicted as below: 
Implats Mining Charter Score 

Parameter     Performance  
measure  
Target  
2014  
%  
Target  
March  
2011  
%  
Actual  
as at June  
2011  
%  
Ownership     Equity#   26   15   >26  
Housing and Living Conditions     1 person per room**   100   Baseline   21  
Procurement and Enterprise Development     Capital goods   40   5   57  
    Services   70   30   59  
    Consumables   50   10   48  
Employment Equity     Board   40   20   62  
    Excom   40   20   20  
    Senior management   40   20   36  
    Middle management   40   30   41  
    Junior management   40   40   55  
    Core skills   40   15   62  
Human Resources Development (HRD)    HRD expenditure   5   3   6  
Mine Community Development     Up to date implementation of approved projects***   100   100   90  
Beneficiation     Estimated baseline*   10   Baseline   22  
*   Baseline not stipulated but has been calculated internally
#   Push down of RBHs and the ESOP shareholdings in Implats to Impala as agreed by the DMR in granting Impala its converted mining right: Impala 26%, Marula 27%, Afplats 26% and Two Rivers 55%
**   Current occupation is two persons per room
***   Internal assessment on progress made

The Indigenisation Act in Zimbabwe emphasises the need for empowerment at the Zimbabwean operations in the sphere of ownership and community development. The Group is positive that it will be able to meet these requirements based on the plans that have been put to the government of Zimbabwe.

Community relations

Material issues common to most communities include employment and procurement opportunities, environmental issues, HIV and health issues and the development of local enterprises. At each operation specialists in each area engage with communities to address their concerns.

The Group actively manages its relationships with host communities. Community engagements at the various operations are conducted through formal structures, guided by documented procedures and charters. Membership of each structure includes elected community representatives, which allows for inputs from the community and the effective dissemination of information to the community from the Company.

ACCESS TO RESOURCES

The Group’s long-term business success is dependent on its ability to bring reserves and resources to account as such project delivery is a strategic imperative for the Group. The need to meet the production milestones for 20, 16 and 17 Shafts is crucial, as is the timely planning and development of other shafts.

Current delays in mine development continue to constrain growth in the short to medium term, and remedial action is being taken to address these shortcomings.

Future plans are also in place for the development and access of resources at the Zimbabwean operations.

PRODUCTION

Maintaining the production profile is material to the Group in order to optimise the use of its infrastructure. Issues affecting production are dealt with in the operational reviews found from here.

SUPPLY AND DEMAND

Supply and demand balances are fundamental to PGM prices. The outlook for these prices is a key factor that drives investments in future projects which is critical for the long-term sustainability of our business.

The dynamics on supply and demand is covered in detail under the market review section found here.