The challenge of finding suitable skills to staff new projects is ongoing. Exxaro has an active programme to retain scarce skills that accounts for 2–3% of total payroll (page 97).

Since collective agreements determine specific guaranteed Basic Conditions minimum salaries, there is no discrimination between salaries of men and women. In the management and specialist category, all employees are on performance contracts and individual salaries are based on performance and not gender. The breakdown of male/female employees per category and region is shown below.

Gender breakdown by category and region: at 31 December 2008

During the year, a third-party audit by a leading industry expert confirmed that all relevant Exxaro policies fully complied with South Africa’s Employment Equity Act 55 of 1998.

Exxaro’s to 30 September 2008, as submitted to the Department ofemployment equity reports for the period 1 October 2007 Labour, reflect the following level of representation per occupational level by designated groups (historically disadvantaged South Africans or HDSAs – blacks, coloureds, Indians and white females as per mining charter definition) and split between permanent and temporary employees:

Employment equity – 1 October 2007 – 30 September 2008

Literacy and numeracy

Exxaro offers sponsored, voluntary adult basic education and training (ABET) programmes at all commodity businesses, except where employees are fully literate. Exxaro carries the full cost of
these programmes, totalling some R3,3 million in 2008. Candidates are screened and counselled to ensure they are able to make informed decisions, and an incentive scheme is in place for each level completed to encourage more employees to become functionally literate and numerate. More than
1 000 employees have passed one or more ABET level since inception of this programme.

Good progress was made in 2008 towards our target of offering everybody the opportunity to become functionally literate and to participate in ABET classes. Almost double the number of employees completed various ABET levels compared to the previous year. In 2008, 236 employees completed various ABET levels successfully – of these, 14 passed ABET level 4, 29 passed level 3, 45 level 2, 98 level 1 and 50 pre-ABET. Equally, the number of non-employees completing different ABET levels more than doubled in the review period. Across the group, 68% of employees had an NQF level 1 and above qualification in September 2008 (66% in September 2006).

ABET levels completed

There are now accredited ABET training centres at Grootegeluk, Tshikondeni, Matla and Arnot mines. The group’s plans, submitted to and approved by Mining Qualifications Authority (MQA), contain sections on the number of ABET candidates completing various levels and planned for the years ahead.

In compliance with the national skills strategy, KZN Sands, Namakwa Sands, Grootegeluk and the corporate centre already have more than 70% of their employees on NQF level 1 and higher.

• KZN Sands’ during the year, all of whom have gone to the next step in their literacy training. Fifteen contractor employees were enrolled in the level 1 programme later in the year.
• At Matla, two full-time educators run the ABET programmes and at least 90 employees each year attend 13-week full-time courses. The success of this approach is reflected in Matla’s 100% ABET pass rate in 2008.

Training and education

Understanding that a chain is only as strong as its weakest link, Exxaro is determined not to have any weak links in its skills development process. We believe in empowering all staff with the knowledge and skills they need to help us grow the company, but also to develop personally. Since the group’s successfully completed almost 25 000 different training courses, specialist and development programmes. policy is to invest an appropriate amount of total payroll each year on human resource development. In 2008, this was 5,2% (excluding the 1% skills levy) or an investment of over R100 million.

Through our human resource development policy, Exxaro aims to:

• Develop and sustain core competencies and maximise human resources to meet its strategic objectives and improve its operational performance
• Create a learning culture by assisting and facilitating the process by 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 through leveraging technologies
• Support and reinforce the values of the company, 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.

In 2008, Exxaro refined the focus on skills development. Where our primary focus was previously on engineering learnerships, the skills development objective in Exxaro has broadened to include other learnerships and especially skills programmes, while steadily increasing the number of engineering learnerships.

Although the numbers vary as learners qualify and new recruits enter the system, on average Exxaro currently has over 600 learners registered in engineering and other learnerships/skills programmes. This is a meaningful improvement on the prior year’s levels of 400.

In 2008, on average, 170 engineering learners were registered and trained at the Colliery Training Centre in Witbank, while 245 engineering learners were registered at Grootegeluk’s Grovos Engineering Training Centre. More than 100 artisans qualified at the Grovos training centre alone.

To put this contribution into perspective, Exxaro alone constitutes more than 20% of all engineering learnerships registered with the MQA. Exxaro’s training in engineering learnerships will lead to full artisan status in trades such as electrician, fitter, plater, diesel mechanic and millwright. Artisans are considered scarce and critical skills in South Africa and all these trades appear on the country’s scarce skills list.

The number of other learnerships and skills programmes has also increased significantly, reaching the highest levels towards the end of 2008. By then, there were 40 people registered in mining learnerships, 230 in plant learnerships/ bursars and 16 in administrative/services learnerships,which, when combined with engineering learnerships, brought the total number of people in learnerships/skills programmes to 678.

Exxaro’s are contributing significantly to the national and sectoral transformation process through membership and participation in bodies such as Business Unity South Africa,

Chamber of Mines’ sector skills planning committee and standards-generating bodies of the MQA. Training to assist employees in managing career endings is included in the social and labour plan for each mine, submitted to and monitored by the Department of Minerals and Energy as part of the process of renewing mining licences for each mine. Exxaro also included a five-year engineering learnership plan for 2007 to 2011.

In monitoring our artisan levels retentionof 400. strategy, the ratio of learnerships in the pipeline to the number of artisans employed in various trades is reported to committee each month.

Exxaro keenly understands the impact on current production Grovos Engineering Training Centre. More and future growth of skills retention and availability. To retain technical and engineering competence in the group, a retention strategy has been introduced for technical categories, among others, together with an aggressive succession-planning strategy. Exxaro regularly benchmarks training in engineering remuneration, provides comprehensive training and identifies growth opportunities at every level. This includes continual rotation and exposure of our own talent in multidisciplinary project teams.

All non-bargaining unit employees receive formal performance and career development reviews bi-annually. All management members are assessed throughout the year and this becomes the basis for individual succession programmes and talent management. These assessments are also linked to reward and remuneration.

While employees in the bargaining unit are not part of Exxaro’s formal performance management system, their development is driven by individual development plans derived from an employee’s job profile, formal career plan and individual preference. The performance management process is entrenched in the culture of Exxaro.

All new management and specialist category employees receive formal training on the performance management process and system to reinforce the concept that reward is driven by performance. Performance management is also included in a web-based induction programme.

All training and development is based on a thorough needs analysis, taking cognisance of business strategy, identified skills deficiencies via the performance management process, succession planning requirements, employee career pathing, and the relevant employment equity plans.

Personal development emphasises the joint responsibility of employees to manage their career growth. As such, Exxaro provides financial assistance to permanent employees with potential to further their education through part-time studies of certain recognised, approved courses and programmes. Employees nominated by the company to attend courses or programmes are fully sponsored for tuition, examinations, travel, accommodation costs and study leave.

Specific strategies to ensure the accelerated learning and development of black people, women and people with disabilities include:

• Fast-tracking employees with leadership and management potential
• Accelerated development for occupationally based skills
• Adult basic education
• Life skills programmes
• Learnerships.

Career development

In line with Exxaro’s strategy to ensure that 80% of all new appointments are made internally process that is carefully aligned with our strategy and industry needs to provide a steady fl ow of qualified talent, to tackle our growth and expansion projects. In 2008, there were some 233 trainees involved in programmes supporting internal advancement. The overarching objective is to ensure that trainees entering the company are empowered, challenged and appropriately rewarded:

• Exxaro People Development Initiative: the Exxaro Foundation sponsors 30 previously disadvantaged students each year for a 12-month bridging course at the University of Pretoria. Candidates must be grade 12 students from Exxaro mining communities who want to study for a mining-related degree or diploma. On completing their studies, candidates may be considered for an Exxaro bursary.
• Bursary programme: Exxaro grants around 35 bursaries each year to school leavers interested in mining-related disciplines such as engineering, geology and mine surveying. Graduates are generally offered employment at Exxaro, depending on the current need in that field, mostly through the professionals-in-training programme. There are currently 142 bursars studying at South African institutions at a cost of R9,7 million: more than two-thirds are historically disadvantaged South Africans and 30% are women.
• Professionals-in-training programme: the three-year programme bridges the gap between academic theory and the work environment. Each professional-in-training has a mentor who supervises exposure to the various commodities, leadership and management training, and formal training from professional bodies. In 2008, there were 91 professionals-in-training throughout Exxaro in a R32-million programme: 77% are from designated groups and 26% of those are women.

Communities of practice: Exxaro has communities of practice for effective development and sharing of knowledge, best practices and lessons across the group. The focus is primarily on core competencies required for sustainability. In practice, these communities have loweredstrategy to ensure that 80% of all new the risk of losing key knowledge workers, and brought new people up to speed more rapidly.

Leadership development: Formal leadership development initiatives, mentorship programmes and succession-planning workshops involving senior management and employees are conducted throughout the year. Building and retaining a pool of current and future leaders is a priority for Exxaro and appropriate initiatives include a comprehensive succession-planning process and enhancing strategic leadership competencies.

Employee turnover

Between 1 January and 31 December 2008, Exxaro recorded an average employee turnover rate of 7%. The primary reasons for terminations were death, resignations, dismissals and disabilities. The turnover rate by employee group is shown below:

Turnover rate by employee group

Labour relations

Almost 80% of Exxaro’s employees are represented by affiliated unions, predominantly National Union of Mineworkers (NUM 69,8%), and Solidarity (7,0%). 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 improvement of wages and conditions of employment are done in-house and through the Chamber of Mines.

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.

Through collective bargaining, employees receive several benefits beyond minimum legislative requirements below. Conditions of employment for employees in bargaining units are centrally negotiated each year.

Employee benefits

Full-time employees receive a range of benefits – many exceeding minimum stipulations – including:

• Retirement fund membership subsidised by the employer
• Medical aid membership subsidised by the employer
• Housing allowance/company accommodation
• Guaranteed annual bonuses/13th cheque for bargaining unit employees
• Travel allowances
• Annual leave, sick leave, maternity leave, family responsibility leave
• Incentive schemes, share appreciation rights schemes, standby and call-out allowances, etc as well as payment for overtime worked.

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

The group continues to focus on home ownership. To comply with the mining charter and our own business needs, a new long-term housing strategy has been developed. While Exxaro’s employees receive a housing or living-out allowance to assist them in obtaining accommodation. Land has been made available for housing at Grootegeluk where some 800 units will be built over the next four years.

Housing categories

Where meals are provided, the quality and nutritional value of these meals are determined by a dietician. Qualified staff continually monitor the fulfilment of contractual obligations. Employeeshousing have accessiblepolicy focuses mechanismson hometoownership, engage both management and suppliers on food issues.

Employee wellness

External service providers manage employee assistance programmes for our people and their dependants at all business units. These have been particularly successful in ensuring a fast and efficient response to employees suffering trauma because of work-related and community-based events.

PUTTING ROOFS OVER HEADS AND FOOD ON TABLES

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 can and should be run. We made a commitment to our people to ensure their progress and to build up the skills base we need 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 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 employees and unions. These are updated and progress reported quarterly to the board and annually to government.

By following these plans, each unit ensures that recruitment and skills development are conducted responsibly, promoting 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 that is responsible for ensuring appropriate plans are developed, executed, monitored and communicated to employees.

Pleasingly, and despite the shortage of skills, Exxaro has exceeded 2009 mining charter targets ahead of time in both the management and women in core mining categories. This reflects the constant focus on internal promotion, individual development and skills retention in our aim to be a preferredblack economic empowerment codes, for employer. The group’s charter’s complete set of targets appears on page 107.

Women in mining initiatives

Women in mining initiatives were established and implemented to attract women to work in the core business of the company. A committee representing all the business units of Exxaro has been established to implement and to execute these initiatives.

Employment equity progress

HDSA representation in all
management catagories

Women (all levels)

Human rights

As a responsible corporate citizen, Exxaro complies with labour legislation in South Africa and with International Labour Organisation guidelines. Accordingly, the group encouragesfreedomofassociationandcollectivebargaining, ensures that child labour is not tolerated and that forced or compulsory labour is not practised.

DEVELOPING BUSINESS AND PERSONAL POTENTIAL

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