SUSTAINABILITY PERFORMANCE Andile Sangqu, Executive Head: Anglo - - PowerPoint PPT Presentation

ANGLO AMERICAN SUSTAINABILITY PERFORMANCE

Andile Sangqu, Executive Head: Anglo American South Africa

OVERVIEW

WHY SUSTAINABILITY MATTERS A FOCUS ON SOUTH AFRICA

• Our people
• Our host communities
• Our partners

ADDRESSING OUR MOST MATERIAL ISSUES

• Safety
• Health
• Social impacts
• Socio-Economic development
• Environmental impacts
• Water
• Climate change
• Mine closure
• Tailings facilities

WHY SUSTAINABILITY MATTERS

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• Sustainability issues are critical for the

delivery of our strategy

• Mining has relatively small global

footprint, but results in significant local impacts

• Local approach to sustainability gives

us our legal and social licence to

• perate
• Zero harm, constructive relationships

with stakeholders, resource efficiency, and 100% compliance are core characteristics of high-quality assets

WHY SUSTAINABILITY MATTERS

MISSION Together, we create sustainable value that makes a real difference VISION To be partners in the future

FOCUS ON SOUTH AFRICA

MEANINGFUL CONTRIBUTION TO SOCIO ECONOMIC DEVELOPMENT

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SOUTH AFRICA: THE CONTEXT

• Mining has historically provided the backbone of South Africa’s

economy and continues contribute be one of the key sectors of the economy

• The mining sector is pivotal to the task of redressing historical

and social inequalities in a sustainable manner

• We are doing our best to adapt to the challenging operating

context

• We continuously seek collaboration opportunities to support

growth and sustainability in the mining sector

• We engage with government and labour, with the aim of

ensuring the sustainability of the mining sector and its continued contribution to the country’s

• We are committed to the objectives of the MPRDA and the

Mining Charter, as such we regard transformation as a business imperative

• We are also committed to economic growth and development
• bjective of the National Development Plan

Lambasi Harvesting at Lusikisiki, Easten Cape

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SOUTH AFRICA: OUR EMPLOYEES

Our employees are the business. We strive to build a culture that reflects and harnesses a rich diversity of ideas and perspectives. We support the identification, development and retention of HDSAs

Our Performance

• Internal targets are set over and above those set by legislation
• 63% HDSAs in management
• Gender diversity remains a priority - 17% women in overall

workforce

• $73.2m (R936m) spent on HDSA training - 4.8% of annual HDSA

payroll

• All business units achieved housing and accommodation Mining

Charter requirements

• $149m (R1.9bn) spent on housing initiatives – more than 4,000

houses built since 2010

Micahel Faku at the Anglo American Chairman's Fund- supported Middestand Evanfeliese Sord computer centre

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SOUTH AFRICA: OUR COMMUNITIES

Mining companies and mining communities must work together to help create mutual trust and

• success. Only by working together can we change

the way people think about resource development and how we can make a valuable difference to people in communities in their everyday lives.

Our Performance

• Social and Labour Plans are in place at each of our operations,

$41m (R520m) spent in 2015

• $70m (R891m) spent on community development programmes
• Engagement with community representatives to identify priority

projects that will best address community needs

• Focus on education, health, infrastructure and capacity

development

• Diagnostic tool to assess compliance with SED plans
• Chairman’s Fund is a dedicated corporate social investment

arm

Mphakiseng Tsotetsi pictured with her baby at the Lilian Mambakazi Community Health Centre in Standerton, which was recently handed over to the local government

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SOUTH AFRICA: OUR PARTNERS

Diversifying ownership in our mining assets, increasing local procurement, and facilitating enterprise development and beneficiation are all critical means of advancing the empowerment of HDSAs and contributing to the socio-economic development of our communities

Our Performance

• We exceeded Mining Charter ownership requirements
• $5.2bn (R67bn) value of BEE transactions since 1994
• Flagship mining companies formed as a result of our BEE
• partnerships. E.g. Exxaro, ARM, Inyosi Coal, Royal Bafokeng
• $2.87bn (R36.7 bn) procurement expenditure with BEE

empowered companies

• BEE procurement: AASA achieved 75% on capital goods, 82%
• n services and 79% on consumables
• All SA-based employees are members of an ESOP
• 8,624 employment opportunities created through Anglo Zimele;

40% of Zimele beneficiaries are female while 35% are youth

• $24m (R308m) funding provided for 321 businesses in 2015

Winslow Nyakudya pictured at the Anglo American Zimele Road show in Mthatha

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SOUTH AFRICA: EMPLOYEE INDEBTEDNESS AT ANGLO AMERICAN PLATINUM – A CASE STUDY

• Post the five-month strike in 2014, research

was conducted into the financial position of Anglo American Platinum employees:

• Around 1,330 Anglo American Platinum

employees were under administration

• Debt to income levels of the average

employee in Rustenburg:

• 24% were at ‘dangerous levels’ (75% plus of

their income is used to service debt)

• 26% were ‘in trouble’ (between 51% and

75% of their pay used to bring down debt)

• Summit Financial Partners had been auditing

employees’ garnishee orders since 2011 and had collectively saved employees approximately R3 million over a 3-year period

• Anglo American Platinum extended Summit’s

services to include a financial wellness offering – to run from 2014-2016

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SOUTH AFRICA: EMPLOYEE INDEBTEDNESS AT ANGLO AMERICAN PLATINUM – A CASE STUDY

• Programme was named ‘Nkululeko’, meaning Freedom

– a call to action for employees to embark on a journey to financial freedom

• From October 2014 to August 2016:
• 8,695 employees consulted a Nkululeko consultant
• Over R32,2 million saved for employees annually on

debt instalments

• 964 debt relief solutions have been implemented
• 1,000 audit cases on garnishee and admin orders

and loan agreements

• 7,480 cases of reckless lending identified
• Garnishee orders have reduced from 5,877 in March

2011 to 797 in June 2016

• Employees told their own stories of how they had

benefitted financially from the programme

• Employee indebtedness programmes are also running

across our other business units and showing positive results

SUSTAINABILITY

ADDRESSING OUR MOST MATERIAL ISSUES

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SAFETY

Safety is a matter of basic human rights as well as an investment in an engaged, motivated and productive workforce

Our approach

• Leadership
• Effective planning and standards
• Supervision
• Incident management
• Risk management

Performance

• Deeply disappointing increase in number of

losses of life in 2016 after years of improvement

• Injury rates continue to improve

Focus on Zero Harm

Unrelenting focus on Zero Harm

41%

We are encouraged by continued improvement in total injury rate since 2012

Critical controls

Approach to safety focused on implementing controls to manage risks

15

HEALTH

Managing occupational health risks, and promoting health and wellbeing in the workplace, protects our people, enhances productivity, and is essential for minimising potential long-term liabilities

Our approach

• Reducing occupational health risks as source
• Employee well-being programmes – including

HIV/TB – that support the overall health of our workforce

• Partnerships to support the health of communities

Performance

• 42% of employees exposed to noise levels and 9%

to dust levels above OEL. All wear PPE

• Reduction in number of new cases of occupational

disease; no new cases of silicosis since 2011

Leader in HIV/AIDS

78,993

employees and contractors tested in southern Africa

92%

• f identified HIV-positive employees enrolled in

wellness programmes

Community health

Continued investment in local health partnerships to support communities near mines and in labour sending areas

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MANAGING SOCIAL IMPACTS

We seek to maximise the benefits of mining and mitigate its potential negative effects, which can trigger stakeholder opposition, resulting in project delays, disruption to our operations, and reputational damage

Our approach

• Social performance entrenched in Values and Business Principles
• Social Way outlines mandatory performance standards
• SEAT provides practical tools for managing social impacts,

improving development and stakeholder engagement

Enhancing stakeholder dialogue

is a critical aspect of SEAT and our overall social performance programme

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MANAGING SOCIAL IMPACTS…CONTINUED

Performance

• Assessment results show a steady improvement

across almost all the requirements and decline in non-compliances

• Level 3–5 social incidents are reported to the

Board Sustainability Committee

• 319 Level 3–5 incidents recorded in 2015
• A small number of incidents impacted production

slightly

Social conflict impacted Platinum operations. Complex causes including poor public service delivery and lack of employment opportunities. We’ve been working with the DMR with regards to issues of public service delivery, and a task team with community representatives has been established to serve as an engagement platform. The Minister appointed the South African Human Rights Commission to serve as the mediator between the communities and the mine.

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MAXIMISING BENEFITS

Delivering a ‘fair share’ of benefits supports our social and legal licenses to operate and can position us as a partner of choice for host governments and communities

Our approach

• Supporting the productivity of local markets
• Supporting productivity of public services

Performance

Support productivity

• f LOCAL MARKETS

Support productivity

• f PUBLIC SERVICES

Local procurement External capacity development Enterprise development Synergies from mine infrastructure Workforce development Social investment Skills sharing/Employee volunteering

$23,365m

total value distributed

75%

value distributed in developing countries

$10,000m

spent with suppliers

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MAXIMISING BENEFITS…CONTINUED

Enterprise development

One of the most effective means of ensuring sustainable livelihoods

Local procurement

Can reduce expectations on the business to deliver public services External capacity building

Can reduce expectations on the business to deliver public services

110,780

jobs supported in SA, Botswana, Peru, Brazil, Chile since 2008

62,394

SMEs supported inside and outside supply chain

17

Municipalities supported in SA and Latin America

$5,4m

Million investment in external capacity building

$1,500m

spent with local suppliers world-wide

Caroline and Rebaone Matloko living in one of the new houses in Postmasburg built for Kolomela Iron Ore mine. Rebaone is a Komatsu 730 Haul truck operator on the mine

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MANAGING ENVIRONMENTAL IMPACTS

Ensuring responsible environmental management through all the life-cycle stages of an operation can influence

• ur future access to land and capital,

improve resource security, and reduce operational costs and closure liabilities

Our approach

• Mandatory Environment Way management

system standard

• Supported by a set of performance standards
• n water, waste, air quality, etc
• Environmental management increasingly

being incorporated into integrated approach to operational risk management

Debmarine Namibia: SS Nujoma marine diamond mining vessel

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MANAGING ENVIRONMENTAL IMPACTS…CONTINUED

Performance

• Track level 1-5 environmental incidents; 3-5 incidents reported to

the CEO and Board

• Steady progress in reducing the number of significant (3-5)

incidents from 21 to 6 in five years

• One incident in SA during 2015 at Thabazimbi - discharge of water

into Crocodile river, but no immediate change to the aquatic ecosystem

• No permanent environmental harm associated with 2015 incidents,

nor production impacts

• Mindful of water incidents recurring once droughts lift

Indigenous flora near Kolomela mine in the Northern Cape

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WATER

Water is a human right and a critical input to our

• business. To maintain our licence to operate, we

cannot degrade water quality or compromise the rights of other water users

Our approach Three focus areas:

• Water security in water scarce regions
• Water quality, particularly at operations that have an

excess of water

• Water balance management, particularly at operations

that are prone to seasonable flooding and droughts

Around 75% of our current portfolio is located in high-water- risk regions

Percy Nxumalo and Islay-Jane Sparks at the Kolomela Aquifer Recharge pump station, where water pumped from the mining pits is fed back into an adjacent aquifer

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WATER…CONTINUED

Performance

• All operations have risk-based water efficiency targets in

place

• Water security has impacted production at Los Bronces in

Chile, but is under control following several technical interventions

• Water quality challenges being addressed by treatment

plants in high-risk cases

• Moving to passive treatment technologies that are low-cost

and viable post closure

• Looking ahead: we see opportunities in playing a

leadership role in catchment level water issues

25m m3

Volume of water saved by water efficiency projects in 2015

222m m3

Volume of new water used in 2015

64%

• f total water

requirements are met by recycled/reused water

Raesetja Teffo and Malesela Kutumela discussing water efficiency levels at the Mogalakwena north concentrator

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CLIMATE CHANGE

The Paris Agreement will, over time, effect fundamental changes to our economic and social systems. Anglo American seeks to understand the implications of these

• n our value chain and

maximise opportunities associated with the transition to a low- carbon future

Hydrogen Fuel Cell Electric Vehicles. A group of companies is aiming to set two new records for FCEVs with a continuous five-day and five-night drive around the M25 in the UK as part of the London Hydrogen Network Expansion. Hydrogen FCEVs produce no harmful tailpipe emissions with water being the only by-product. With range and refuelling times similar to those of petrol or diesel cars, they can be seen as direct replacements for conventional vehicles

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CLIMATE CHANGE

Our approach

Our climate-change strategy aims to:

• Reduce our carbon footprint mitigate exposure to climate-change

regulation

• Manage climate risks and opportunities associated with products

and investments

• Drive greater resilience to the physical effects of climate change

within our business and host communities Performance

• 2015 energy and GHG targets met; all operations have new targets

in place

• Improving market risk/opportunity profile following coal divestment
• decision. Opportunities linked to climate change for platinum market
• Some early work on renewables, but opportunities still limited
• Leading work on climate adaptation studies and planning
• Power system in SA will remain constrained; business continuity

and emergency response plans in place

~$100m

Energy savings from ECO2MAN and BI projects

325

Number if energy and GHG savings projects

5.8m GJ

Energy saved

4.6 Mt

CO2-e avoided

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MINE CLOSURE

We emphasise the importance of designing, planning and operating a mine in consultation with communities and with closure in mind. The aim is to reduce liabilities to our business and leave a positive legacy

Our approach

• Industry leading Mine Closure Toolbox seeks to ensure that:
• Opportunities, risks and liabilities are identified
• Closure plans are fully costed
• Provision is made for the planned operational life of the mine or

premature closure Performance

• Decision to close Thabazimbi mine in 2015 after 80 years and

several life extension projects

• Mining and production ceased June 2016. Progressive rehabilitation,

demolition and asset sale in progress

• 800 employees and 360 contractors affected. Extensive consultation

throughout and investment in economic development projects independent of mining

Environmental Auditing at Mogalakwena North - taking photographs from fixed positions for environmental comparisons - Riaan Van Zyl (Water Officer) and Calvin Shibusi (Environmental Assistant)

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TAILINGS FACILITIES

Applying best practise standard to the management of waste storage facilities is an ongoing focus for Anglo American

Our approach

• Apply the ‘avoid, reduce, re-use and recycle’ management hierarchy

and actively explore the re-use of by-products

• New mineral residue management standard implemented from

2014-2018

• We seek to move beyond compliance
• Facilities are classified in terms of potential safety, health,

environmental and reputational impacts

• These factors determine design criteria; the frequency of monitoring

and inspection; assignment of personnel; and governance structure Performance

• Series of specific reviews untaken following Samarco to ensure risks

are adequately managed – no significant concerns identified

• No Level 3-5 incidents relating to mineral waste in recent years

Inspection at El Soldado’s El Torito tailings dam in Chile

THANK YOU