SOUTH AFRICAIssue No. 6February 2011

A YEAR IN REVIEWPerspectives on 2010,

and what lies ahead

Athe

MAGAZINE

WELCOME

IN THIS ISSUE:

The past year was one of significant achievement for Anglo American and South Africa as a whole. In this edition of the A Magazine, we explore the highlights of 2010 and offer some perspective on how key trends, events and decisions have influenced the business and prepared it for the year ahead.

The year 2010 was challenging and memorable for our country. Certainly, it will always be spoken of as the year in which we surprised the world by hosting an incredibly successful FIFA Soccer World CupTM. While many shook their heads in concern, we blew our vuvuzelas and cheered our way through the most anticipated sporting event in South Africa's history. But while our world went soccer crazy for the better part of two months, a number of other things were also achieved:l We emerged from our 2009 restructuring process leaner, more focused,

competitive, and unified. This has been backed by a solid financial performance, the reinstatement of the dividend and the fact that our asset optimisation initiatives are all delivering ahead of target.

l Throughout the year we focused on the top five safety risks across the business while building on our successful working relationships with the government and unions through the tripartite safety initiative. There is still much to do, but I believe that we can genuinely claim we are helping to set a new safety standard for mining in this country.

l We have made very good progress with respect to the Mining Charter, the new version of which was released in September 2010. We have already met or exceeded a number of the original and revised targets, and these are highlighted in more detail in this edition of the A Magazine.

l Another highlight was the successful launch of our new brand positioning, which encapsulates what we stand for, our values and how we are different from the competition. Our new end line makes the connection between the values that are embedded in every part of our business and the daily achievements that we make as a result. It is what we do best, and it is how we intend to tackle any challenge that comes our way in 2011: through Real Mining. Real People. Real Difference.

Just one short year ago, at the 2010 Mining Indaba in Cape Town, Cynthia Carroll, our Group chief executive, commented that the mining industry would continue to play a critical enabling role in Africa’s growth, and that – for Africa – the next decade may well be shaping up to be its best. I speak with confidence on behalf of my fellow colleagues in the Group when I say that we can’t wait to get out of the starting blocks in 2011 and start making that a reality.

GODFREY GOMWEEXECUTIVE DIRECTOR,ANGLO AMERICAN IN SOUTH AFRICA

Kevin Steyn, from Thermal Coal’s New Denmark colliery, with a team of underground miners.

FEBRUARY 2011 | 01

22 NEW HORIZONS

Happy 25th, St Marks;

Maths and Science

Excellence Awards; Rhodes

library starts new chapter;

Gogo's life lights up with

a home of her own; JAG

paints a clearer picture;

positive health makes a

positive difference.

18 FINDING NEW

GROWTH IN TOUGH

TIMES

Enterprise development – a

year of progress; Anglo

American Zimele: as easy as

1-2-3 … and 4; Foodworx

gets a bigger bite of the pie.

The A Magazine is a quarterly publication of Anglo American in South Africa. www.angloamerican.co.za

Editorial enquiries: Jerome Raman, tel +27 (0)11 638 3188, email: jraman@angloamerican.co.zaThe opinions expressed by contributors do not necessarily represent the views of Anglo American.Provided that permission is obtained from the editor and on condition that acknowledgment is made to the A Magazine, newspapers and magazines are welcome to reproduce articles in whole or in part.

NOTE: Please note that all rand/US dollar conversions contained in this edition are based on the exchange rate on 11 January 2011, of $1 = R6.848.

02 FACTS, STATS AND

NEWS IN A NUTSHELL

Accolades for Kumba Iron

Ore; R20 million injection for

healthcare access; Platinum

goes east; garden project

gives food for thought; first

African CO2 storage atlas

published; year-end media

event.

06 WORKING LOCAL,

THINKING GLOBAL

The economy in review;

innovation on the right track;

growing our coal footprint

in India; when technology

says it better; Zibulo scores

top marks at steel awards;

transformation review and

news.

14 SAFETY,

SUSTAINABILITY AND

PROFITABILITY

SA business turns up the

heat; Sishen South – on

budget, ahead of schedule

and LTI-free; underground

safety gets a shot in

the arm; safe haven for

endangered species.

02 | FEBRUARY 2011

01 Katriena van der Merwe, a Transnet assistant operator working at Saldanha, at Kumba Iron Ore.

02 Moly-Cop, in Chile, South America

03 Cornelius Sedupang and Thomas Rich Baloyi, construction workers on the crush circuit at the Sishen South Project plant, Kolomela mine. Kolomela, which will start production in the fi rst half of 2012, will add about nine million tonnes of very high quality low-cost iron ore to Kumba Iron Ore’s production per year.

01

MOLY-COP AND ALTASTEEL SOLD

“This is a signifi cant milestone for the company and positions OneSteel as a global player in grinding media with participation in the world’s largest and most attractive mining consumables markets.”GEOFF PLUMMER, CEO of OneSteel

Anglo American has agreed to sell its grinding media and steel products businesses, Moly-Cop and AltaSteel, to Australian-based OneSteel Limited for a total consideration of R6.38 billion ($932 million) on a debt and cash-free basis. Located in North and South America, Moly-Cop and AltaSteel were previously managed as part of the wider Scaw Metals Group. “This sale represents further strategic progress as we continue to focus on our core commodity businesses and on the delivery of our major near-term growth projects,” says Cynthia Carroll, chief executive. Under the agreement, economic interest in the business passes to OneSteel with effect from 1 July 2010. Completion of the transaction is conditional on antitrust clearance in Canada and it will undergo regulatory review in Australia and Brazil. OneSteel is Australia's premier manufacturer of steel long products and a leading metals distribution company in Australia and New Zealand.

02

The past year has been one of accolades for Anglo American's Kumba Iron Ore business. Its employees voted it the best mining company to work for in the 2010 Deloitte Best Company to Work For Survey, and it was also the only mining company to make it into the top ten in any of the survey categories. Earlier in 2010 Kumba was named the Top Performing Company of the Year in the African Access National Business Awards (AANBA), where it won the Environment, Sustainability and Governance Award, as well as Exporter of the Year. It also took top spot in the Resources category of the Top 500: South Africa’s Best Managed Companies, and second place in the Sunday Times, Business Times’ Top 100 Annual Awards.

IT'S SIMPLY THE BEST

FACTS, STATS & NEWS IN A NUTSHELL

FEBRUARY 2011 | 03

Anglo American is leading the corporate charge for improved access to healthcare in developing economies, pledging R6.84 million ($1 million) per year for the next three years and calling for other companies to match us. This donation is being channelled through the Global Fund to fi ght HIV/AIDS, tuberculosis and malaria.

Speaking at the G20 Business Summit in Seoul, Cynthia Carroll, chief executive, called on fellow participants to lend their weight to this initiative. “I am delighted to lead this initiative with Yasuchika Hasegawa and Takeda Pharmaceutical,” she said. “Anglo American has a deep understanding of the clear business case for investment in health to promote economic growth in developing economies. We call upon the business community of the G20 to help meet this health challenge by providing the investment required to strengthen healthcare systems in developing countries in order to increase access to better quality healthcare. We hope that such action will also act as a catalyst for further similar investments from large companies around the world.” The G20 Business Summit is an unprecedented cooperative effort between the public and private sectors, hosting 112 global businesses, representing an asset value of R205.44 trillion ($30 trillion) and annual sales of R27.39 trillion ($4 trillion). It is hoped that the call to action will result in approximately R2.05 billion ($300 million) being pledged over the next three years to help tackle the developing world’s healthcare challenges.

R20 MILLION TO IMPROVE ACCESS TO HEALTHCARE

Anglo American has one of the world’s greatest long-term mining project pipelines, comprising R116.42 billion ($17 billion) in approved projects and additional projects that could amount to around R342.40 billion ($50 billion). This pipeline will increase Group production by 30% by 2013.

R116 billion

03

LOOKING AHEAD

“The fundamentals for the mining industry are strong, powered by the growth in China, India and the other emerging market economies. South Africa has vast mineral reserves and is ideally placed to benefi t from those prospects. As we have done over the past 93 years, Anglo American looks forward to playing its part in building that future.”CYNTHIA CARROLL, Anglo American chief executive, speaking at the Gordon Institute of Business Science, October 2010

Six students and professional jewellery designers – the winners of the 2010 PlatAfrica Jewellery Awards – recently took their talent to the east, to showcase the best of their work to their Japanese counterparts.

The trip was part of the centenary celebration of the South Africa/Japan relationship, and included workshops and lectures as well as the opportunity to visit Japanese jewellery manufacturers and retailers. Platinum has signifi cant cultural value in Japan, and the craftsmanship of Japanese jewellery manufacturers ranks among the best in the world. The trip was made possible by Anglo American's platinum business, the Platinum Guild International (PGI), Tanaka Kikinzoku International and the South African embassy in Japan.

PLATINUM GOES EAST!

FOOD FOR THOUGHT

“We believe that corporate social investment initiatives should reap long-term rewards and create sustainable living for communities, and Soil for Life is a perfect example of this.”NORMAN MBAZIMA, chairman of the Anglo American Chairman’s Fund

Almost 2,500 people will reap the rewards of a R160,000 donation to Soil for Life, a Western Cape-based gardening training programme that is helping to uplift poor households by teaching community members how to grow their own food and develop basic business skills. Established in 2002, Soil for Life works with approximately 25 community gardening projects, running education and training workshops in small-scale organic food production, soil improvement methods, waste recycling, health and nutrition, plant propagation and nursery skills, and the setting up of local markets. The Anglo American Chairman’s Fund has made two separate R80,000 donations to the initiative’s Food Growing Enterprises and Home Food Gardening Programmes. These programmes benefi t 410 people directly, and up to about 2,460 people indirectly.

“Through our sponsorship of the PlatAfrica Jewellery Design and Manufacture Awards we aim to support and grow the local jewellery industry. These awards not only celebrate local talent, but they also inspire and build on the way jewellery is manufactured and designed in this country.”SANDY WOOD, executive head: marketing, Platinum

04 | FEBRUARY 2011

FEBRUARY 2011 | 05

FACTS, STATS & NEWS IN A NUTSHELL

The mainstream media plays a pivotal role in Anglo American’s communication strategy – a role that was saluted at the annual year-end media event, hosted in November in Sandton. Journalists were thanked for another year of much-valued media partnership, before being treated to a whiskey tasting and blending demonstration. With entertainment from Lira, an award-winning South African artist, and the Andrew Massey Jazz Band, the evening gave members of the press and Anglo American management a much-needed opportunity to network and build relationships.

Anglo American has joined up with the South African National Energy Research Institute (SANERI) and industry partners to develop the Atlas for the Geological Storage of carbon dioxide. There are two elements to the Atlas, explains Stan Pillay, Group manager of climate change and energy. “The first is a user-friendly printed Atlas that provides an overview of the country’s energy economy, a roadmap on carbon capture and storage, as well as the progress made to date in this regard,” he says. “The second is a research document that will serve as a basis for future engagement on the detailed concepts of carbon capture emissions.” SA Carbon Atlas programme manager, Marthinus Cloete, explains that carbon dioxide storage involves capturing CO2 from industrial flue gases, compressing it into liquid form and then injecting it into deep geological formations, such as saline reservoirs, coal seams or depleted oil and gas fields. “While it is possible to track and learn from international developments in capture technology, it is essential for storage potential to be determined locally,” he says. Published by the Council for Geoscience, the atlas illustrates the distribution and ranking of potential geological CO2 storage reservoirs in South Africa, including the initial estimated CO2 storage capacities, the main emission sources, location of industrial hubs, transportation pipelines and other factors that may have a bearing on storage feasibility.

“Although this atlas does not signal the end of the process, it is a major milestone.”DIPUO PETERS, minister of Energy Resources

FIRST AFRICAN CO2 STORAGE ATLAS PUBLISHED

READING BETWEEN THE (HEAD)LINES

01 & 02 South African artist, Lira, wowed guests at the media function, following a message of thanks from Godfrey Gomwe, executive director of Anglo American in South Africa.

01

02

06 | FEBRUARY 2011

The past year has been a tough one for South African businesses, with many still struggling to get back on their feet after feeling the cumulative effects of the global credit crisis. For Anglo American, however, 2010 was a year of positive growth, reflecting solid production increases and a healthy balance sheet. This is thanks in part to the business restructuring

THINKING GLOBALWhile many continue to express concern over sluggish economic recovery and the ongoing credit crisis, there is room for cautious optimism in the local mining sector, says SALEH MAYET, head of finance at Anglo American in South Africa.

FEBRUARY 2011 | 07

WORKING LOCAL, THINKING GLOBAL

and operational changes that the business has made over the past five years – changes that Saleh Mayet, head of finance at Anglo American in South Africa, describes as being “both necessary and well timed”. “Anglo American has evolved, both from a branding and operational point of view,” he says. “We have re-positioned the business for long-term growth, matched our asset base to our aspirations, and delayered the organisation to empower a new generation of management. This has resulted in a leaner, more agile organisation that has been able to produce healthy results in spite of the economic

pressures of the past two years.” While South Africa did not feel the full force of the global credit crisis in 2009, many of Anglo American’s biggest customers did. “As an export-driven economy, if customers find it difficult to buy from South Africa, then we struggle,” explains Mayet. “Fortunately, Anglo American has been able to respond proactively to the changing global market and outlook. This, plus good commodity prices, made for healthy financial results in 2010.” Mayet acknowledges that while the impact of the recession will be felt for a long time, things have improved since September 2009. “I think that trade with the BRIC (Brazil, Russia, India and China) countries – specifically China and to a lesser extent India and Brazil – are holding a potential double or triple dip at bay. Demand from China, for example, is one of the reasons why one of Anglo American’s business units, Kumba Iron Ore, has had such a good year.” He pinpoints two of the key highlights of the past year as being the improvements in safety as well as supply chain and asset optimisation, which has shown meaningful concrete savings. “We have turned to higher levels of profitability in South Africa, and are very pleased with the performances at Kumba Iron Ore, Platinum and Thermal Coal, all business units of Anglo American.” The downside, says Mayet, has been the ongoing strength of the rand. “We are fortunate in that we are doing well locally, and are selling commodities at reasonable prices, but with a strong rand it means less income.” Finance minister Pravin Gordhan has warned that mounting debt woes in Europe could trigger a reversal of the capital inflows that have boosted the rand and other emerging-market

currencies. However, Mayet feels that there are still steps that the government could feasibly take to weaken the rand and possibly levy a tax on foreign capital flows. “A significant portion of the current uncertainty is speculative,” he says. “It is difficult to predict with any accuracy when or how things are likely to change. The world is a very small place, and we need to appreciate that what happens elsewhere is going to affect us. We are going to have to wait and see if the larger economies improve.” Some analysts have been quoted as saying that South Africa's economic recovery is slower than that of other emerging economies, and that 2011 is still going to be a tough year. However, Mayet points out that we must keep in mind how dependant we are on international economies. “The South African economy has weakened, but 2% to 3% growth is still growth. We have never been a 6% or 8% grower, so we shouldn’t be too pessimistic about our current performance. “Some form of fiscal stability has to be at the heart of a sustainable recovery and I look forward to a degree of this in the year ahead. It may be some time yet before we see indications of sustainable improvement, but I do believe that things will gradually improve.”

“The regulations that oblige banks to be more transparent are a good thing: they support one of the most fundamental rules in life and that is, live within your means. This applies to companies as well as individuals, and involves managing your debt and income source properly. It also means ensuring that any asset you buy or investment you make adds to your earning potential and is worth what you pay for it.”SALEH MAYET, head of finance at Anglo American in South Africa

“The full impact of the recession was cushioned by our banking regulations, which enabled our banks to be very robust and resilient. This is why, out of all the emerging economies, South Africa is still widely regarded as being one of the best places to keep money.”SALEH MAYET, head of finance at Anglo American in South Africa

01 Greenside colliery, Thermal Coal.

01

08 | FEBRUARY 2011

Sales into India account for around 35% of Anglo American's total export volumes of thermal coal – a figure that is set to grow considerably in the next two years.

Thermal Coal has maintained direct relations with customers on the sub-continent for over 15 years, many of which are now significant end-users in the Indian power, logistics and steel sectors. A delegation headed by Thermal Coal’s chief executive Norman Mbazima recently visited two of these customers, Visa Power and the Adani Group. Visa Power, which generates an annual global turnover in excess of R6.84 billion ($1 billion), currently has 6GW in projected projects and draws approximately one million tonnes of product from Thermal Coal. Agreements are in place to increase these volumes in 2011. The Adani Group, which is rated as one of India's top ten companies in terms of market capitalisation, accounts for over 50% of the thermal coal imported into India, with off-take of approximately 35 million tonnes in 2010. Its power generation arm is targeted to introduce 20GW of generation capacity into India by 2020.

An innovative assessment system from Anglo American’s Mining and Technology function is helping technicians to keep a beady eye on hard-to-reach areas of operation – and is improving safety and productivity to boot! The new underground rail condition assessment vehicle (URCAV) uses a sophisticated vision system, sensors and software to measure things like track gauge, vehicle acceleration, distance and gradient, without a technician being present. It then transmits this data to the surface in the form of a single easy-to-understand graph. All the measured variables are factored and scaled according to a colour coding system, which tells technicians what type of maintenance is needed, where and when. Already in use at Anglo American’s platinum business, the URCAV dramatically reduces the need for in-person visual inspections or measurements using a handheld push device. Proactive and timely maintenance also means less chance of derailments, injury or fatality, and minimal interruptions in production. What’s more, the data generated by the system is providing a much-needed portal of information on the condition of underground railway systems.

GROWING FOOTPRINT

IN INDIA

INNOVATION ON THE RIGHT TRACK

OUR COAL

01 John Mokhothu (right), sand system foreman and Teboho Kotele, sand system operator, at the New Vaal colliery.

02 Zibulo colliery’s overland conveyor scored 100% in every criteria of what defines a great mining project, in the 2010 Steel Awards of the Southern African Institute of Steel Construction.

03 These large-format communication screens are part of Thermal Coal's new communications campaign.

01

WORKING LOCAL, THINKING GLOBAL

FEBRUARY 2011 | 09

For some 5,000 employees at Thermal Coal who do not have personal computers, internal communications are limited to bulletins, notice boards and line management. But soon this will all be changing. By the end of 2011, large screens and computer kiosks will be found at high-traffic points in each operation, using the latest in integrated communication technology to share key messages throughout the organisation. Business analyst, Elize Venter, explains that while the screens will facilitate the transmission of important announcements, the kiosks will provide employees with access to internal information systems, including company policies and regulations, surveys and, in time, personal payslips. “We are also looking at implementing a centralised SMS system which will enable us to communicate on a one-on-one basis with our colleagues, from personal greetings from management, to up-to-date production and safety statistics.” Screens have already been installed at Landau colliery, the Rapid Loading Terminal, the eMalahleni Water Reclamation Plant and Highveld Hospital, while New Vaal and Zibulo collieries will come on board soon.

What defines a great mining project? Just ask Thermal Coal’s Zibulo colliery. This team recently received high commendations in the Southern African Institute of Steel Construction 2010 Steel Awards, which scored the colliery’s overland conveyor project 100% in every criteria, in the mining and industrial category of the competition. Commissioned at the end of 2009, Zibulo’s conveyor is the longest single-flight overland conveyor in Africa and the second longest in the Southern Hemisphere. Almost 16km long, it forms part of a system of conveyors, processing plants, product stockpiles and silos. The judges recognised the project for the professionalism of its mechanics,

steelwork design, detailing, fabrication and execution. At Zibulo, coal is brought from a depth of 115m to the surface by means of an incline conveyor, which discharges it into a buffer silo. The coal is then fed into a crushing and screening circuit by means of a second conveyor. An accelerator conveyor is then used to take the material up to the same speed as its overland counterpart. This configuration enables the overland unit to operate at optimal efficiency in transporting coal to the Phola processing plant. The Zibulo conveyor runs over a number of wetland areas, and the gantries spanning these were designed specifically to prevent spillage and contamination by surface run-off water.

ZIBULO SCORES TOP MARKS AT STEEL AWARDS

WHEN TECHNOLOGY SAYS IT BETTER

OUR COAL

02

03

10 | FEBRUARY 2011

In the past few years there have been a number of shifts in the local regulatory environment that will have considerable long-term impact on the

South African mining industry – from the performance of the economy compared to other emerging economies and the Revised Mining Charter’s more stringent transformation requirements, through to ongoing calls for nationalisation and increased concerns over corruption and the security of mineral rights. But for Lindiwe Zikhali-Ngobese, who recently took on the task of steering Anglo American’s transformation initiatives in South Africa, the most telling consequence of these changes will be how mining companies respond to them. And for her, this response should come in the form of changing mindsets, not just tactics. “When it comes to being a good corporate citizen, we prefer to think beyond compliance and consider where we want Anglo American to be

in the years to come,” she says. “Transformation is not just about legislation. It is about us, and about embracing the challenges we, as South Africans, face as individuals and as a nation.” While transformation efforts at Anglo American began long before most current legislation was in place, the Group has celebrated a number of key milestones in the past year, including meeting – and in some cases exceeding – the targets of the Revised Mining Charter. “We have already met the requirement for 26% ownership by historically disadvantaged South Africans,” says Zikhali-Ngobese. “We have exceeded the original 10% target of women in mining, and our procurement from black-empowered suppliers stands at around 40% of discretionary spend. We have also committed more than R2 billion rand over the next three to four years to employee housing initiatives. “In 2010, we also concluded our mining rights conversions – a critical milestone in terms of the local regulatory environment.

All 38 mining rights applications have now been granted, as well as 77 prospecting rights. This is testament to the diligence of our legal, regulatory and transformation teams, and the quality of the social and labour plans that every single one of our business units now has in place.” The caveat, says Zikhali-Ngobese, is that the Department of Mining measures the mining industry as a whole. While some mining companies have taken the principles of the Charter to heart, many have struggled to come even close to meeting the targets. As a result, the industry as a whole is not measuring up. “The time has come for industry leaders like Anglo American to look beyond our own performance and find ways to drive improvement in our peers, for example through sharing of best practices,” she suggests. “I am not suggesting we have done everything that needs to be done, or that we cannot improve, or even that we are better than everyone else. But we are participating.

As South Africa has progressed on its

journey of transformation, so too has

Anglo American embraced the challenge

of adapting our business to reflect the

changes that have earned this land its

moniker as ‘the rainbow nation’. A Magazine

spoke to Lindiwe Zikhali-Ngobese, head of

transformation, to find out more.

“I am South African.

I have lived the history, I

would like to live a new one,

and I believe we can create

one. We cannot induct new

generations into an old

history by bringing them into

businesses that reflect this

old history. The reality of a

company needs to match its

principles and values – and

this is what we are starting to

achieve at Anglo American.”

LINDIWE ZIKHALI-NGOBESE,

head of transformation at

Anglo American

01 Employees check support safety at Goedehoop colliery.

SPEAKING FROM THE

HEART

FEBRUARY 2011 | 11

We are at the portfolio committee meetings, we are working in good faith, and we constantly encourage and reinforce the message that transformation is not only about compliance. “As an industry leader that has walked each step of South Africa’s journey of growth, we have lived this country’s history. We are now helping to create a new one by building a company and working environment that reflects our future, not our past, and which makes sense to the new generation of South Africans. “We are fortunate in that as a transformation department, we have established good working relationships with heads of human resources and other key stakeholders throughout our Group, and are able to share the concept that this Charter is not just a law, it is something we believe in,” she adds. “Over the next few years, we want to find, develop and grow the right people who believe in this principle too, and who will stay with the company for the long haul.” Zikhali-Ngobese points out that what has been comforting in the past year, from her personal point of view, is seeing the extent and value of collaboration on all transformation fronts. “People from all the different business units are sharing their information, statistics and details,” she says. “They are proud of what they are achieving, excited, and encouraged. A lot of teams have made exceptional progress, and not much of it has been previously showcased to the broader Anglo American Group and its Transformation Committee or the general South African public. “For me, the year ahead will be about doing just this.”

WORKING LOCAL, THINKING GLOBAL

01

12 | FEBRUARY 2011

Ownership: Anglo American has concluded R50.67 billion ($7.4 billion) in BEE transactions since 1994, including a number of landmark transactions to support the creation of major competitive BEE operators, such as African Rainbow Minerals, Exxaro, Afripalm Resources, Mvelaphanda, Shanduka Group and Anooraq Resources. “As a result, we have already achieved the 2014 Mining Charter target of 26% ownership by Historically Disadvantaged South Africans (HDSAs) in all our South African operations,” says Lindiwe Zikhali-Ngobese, head of transformation at Anglo American.Employment equity: Some 46% of our management, in aggregate, is comprised of HDSAs, ahead of the original Mining Charter target of 40%. The Group has also made strong progress in attracting women to the mining industry: women now make up 13% of South African employees, and 19% of management. An increasing number are in core mining jobs, including 2, 700 women in Anglo American’s platinum business alone. “Our focus is now on ensuring a further improved spread of HDSA representation, particularly at senior management level,” says Zikhali-Ngobese. “We have an excellent pipeline of talent and are looking very closely at various ways of meeting our senior management targets, including succession planning and fast-tracking.”Housing: Anglo American has committed more than R2 billion to employee housing initiatives to be

implemented by 2014 (including construction and conversion projects, housing allowances, and similar). “But being the employer of choice means providing more than just fi nance,” says Zikhali-Ngobese. “Therefore, we strive to provide holistic solutions that include educating employees on how to be responsible, proud and fi nancially astute homeowners.”Skills development: Every single Anglo American business unit in South Africa has an Adult Basic Education and Training (ABET) programme in place, supported by campaigns to encourage employees to participate, along with mentoring and career pathing initiatives. “Besides ABET, we run artisan training programmes linked to developing core and critical skills, with the goal of ensuring that 40% of core positions are held by HDSAs.”Mine community and rural development: Every operation has a comprehensive social and labour plan in place, which outlines the development initiatives that each mine is driving, not only in surrounding communities but also in labour-sending areas. These plans are developed through a consultative process with local municipalities and take into account their own integrated development plans.Procurement: Group BEE spend and business development has grown signifi cantly in the past decade, from R910.78 million ($133 million) in 2000 to more than R19.17 billion ($2.8 billion) to date. In 2009, close to 40% of total available procurement spend was directed to HDSA businesses.

WE ARE:

FAST FACTS

More than 5,700 employees, contractors and community members are currently enrolled in ABET programmes at Anglo American operations.

Some 2,600 people have received portable skills training to be employable outside the mining industry.

Total spend on skills development as a percentage of payroll at the end of 2009 stood at 6%, comfortably ahead of the 2014 target of 5% stipulated in the Revised Mining Charter.

WHERE

01

FEBRUARY 2011 | 13

WORKING LOCAL, THINKING GLOBAL

Kumba Iron Ore, a business unit of Anglo American, created the Sishen Iron Ore Company Community Development Trust (popularly known as the ‘Super Trust’) in 2006. It has generated hundreds of millions of rands for community

development in the Northern Cape and Limpopo provinces. Chris Griffith, CEO of Kumba Iron Ore, explains that the trust was established as a 3% shareholder in the Sishen Iron Ore Company (SIOC) to benefit from SIOC’s development and commercialisation of its existing operations and growth projects. “Just four years later, using the SIOC dividends paid to date, the trust has now redeemed the R458 million in preferential shares issued to pay for its SIOC shares,” he says. “Since 2006, R6.5 million in cash has been returned to BEE shareholders – well ahead of the original projections. The trust now owns an unencumbered 3% of SIOC with a current value of around R4 billion. “We are extremely proud that the strong stream of dividends has enabled the trust to reach this position of ownership so quickly. The communities where we operate will now see meaningful benefit and upliftment. This is a successful empowerment initiative which reaffirms our mission at Anglo American; of people making a difference, in a company making a difference.” The trust will now benefit from the full SIOC dividend with substantial funds for community development in the Northern Cape and Limpopo provinces in the coming years. Five independent community organisations operating in these areas have been identified as beneficiaries for channelling funds and resources. These include: l Gamagara Development Forum (which is the beneficiary

trust for the communities around Sishen mine, including Olifantshoek, Dingleton, Sishen, Mapoteng and Deben)

l Tsantsabane Development Foruml Kgalagadi Charitable Trustl Maphalane Disabled Children Trustl Thabazimbi Development Forum

TRANSFORMATION THROUGHTRUST

The most meaningful commitment to broad-based black economic empowerment and wider health and educational transformation schemes is the kind that involves employees, local communities and specific social investment projects. One such endeavour is the Sishen Iron Ore Company Community Development Trust.

FAST FACT

Kumba Iron Ore has made strides in empowering employees through its Envision employee share scheme. Since 2006, Envision has received R746 million, of which R160 million was paid to employees and R586 million used to repay funding and interest. According to CEO Chris Griffith, the scheme has had a significant impact on the empowerment of Kumba Iron Ore's 5,500 plus employees.

01 Maria Montane at an Anglo American self-help food programme in Limpopo.

02 Building houses as part of a community resettlement process at Anglo American's platinum operations.

02

14 | FEBRUARY 2011

SUSTAINABILITY AND PROFITABILITYSafety, sustainability and profitability are inextricably linked. Underpinning all three is risk management, and during 2010 Anglo American continued to drive improvements across all operations. Group head of safety and sustainable development, Dorian Emmett, offers A Magazine some insight into what has been achieved, and how.

01

02

FEBRUARY 2011 | 15

CONNECTING SAFETY, SUSTAINABILITY AND PROFITABILITY

There is an important distinction between reducing risk and merely managing it, and no one understands this better than Group head

of safety and sustainable development at Anglo American, Dorian Emmett. “The Group safety strategy is based on a safety maturity journey model, which sets out a roadmap for safety management and its improvement,” he says. “We are on our way towards ‘resilience', which is the highest level of safety maturity, and over the past couple of years we have been developing and introducing the infrastructure we need to deliver zero harm.” Underpinning all of this is the Group’s risk management process, a key driver of Anglo American’s safety successes which include an overall 65% reduction in fatalities since 2007. “We have always maintained that strong operational performance is driven by safety, and 2010 proved to be a good year in this respect,” says Emmett. “Since the Group safety strategy was approved, we have focused on the top safety risks

across the business, namely, those areas that make the most difference to our people on the front line.” One of the key safety initiatives in recent months is the transportation campaign, which was launched in response to a group-wide transportation audit. According to a Department of Mineral Resources (DMR) Occupational Safety Report released in August last year, 23% of injuries and fatalities in the mining industry since January were caused by transport-related accidents. “Transportation is one of the biggest safety hazards we face as individuals and as a business,” says Emmett. “To tackle this, we developed a transportation behavioural safety programme aimed at helping everyone understand and better manage the risk associated with this on a daily basis.” The programme includes a leadership workshop, as responsibility for managing safety ultimately lies with our leaders. It also includes a range of ‘Why risk it?’ awareness materials and involvement activities, which are being used at all our sites to help make these risks more visible and to educate those working on the front line so that they are better able to identify risks, stop unsafe work, prevent incidents and save lives.” Transportation is currently one of the three main causes of fatalities in the local mining industry, with Anglo American alone losing seven people in 2009 and a further five in 2010 through transport-related incidents. Managing this hazard remains a priority. Speaking recently at the Isibonelo colliery in Mpumalanga, the colliery’s general manager Reuben Hlatshwayo pointed out that an especially high incident rate involving light vehicles is a common challenge shared by individual mines. The DMR's Louis

Bezuidenhout has confirmed this, noting that while Mpumalanga anticipated a 40% reduction in fall of ground incidents and a 30% decline in incidents involving machinery by the end of 2010, vehicle accidents are expected to continue to rise year-on-year. Both were speaking at a Tripartite Transport Safety Day in October last year, an event run in conjunction with the DMR and unions Solidarity, the United Association of South Africa (UASA) and the National Union of Mineworkers (NUM). Anglo American's Tripartite Safety Initiative - a collaborative health and safety partnership that has been gaining significant ground since its formation after the Safety Summit in April 2008 - has adopted and supported the implementation of the transportation programme as part of its campaign’s initiative which is designed to raise awareness of health and safety issues. “All site leaders are being asked to take part in the risk-focused workshops to help improve safety in this area,” says Emmett. “These provide a platform for reviewing, refining and enhancing the action and improvement plans that have been put in place at a Group, business unit and site level.” They also complement the activity being progressed at a Group-wide level by the transportation taskforce, whereby every business unit is undertaking comprehensive assessments of major risks, which will underpin the development of specific ‘major risk management plans’. Mining remains a high-risk business, but by placing risk management at the very heart of all that we do day-in, day-out, we can minimise the realisation of risks and therefore the harm to our people,” concludes Emmett .

FAST FACT

An estimated 92% of South African operations were fatality-free in 2010.

01& 02 Transport Safety Day at Isibonelo Colliery.

03 Miners at Goedehoop colliery.

03

16 | FEBRUARY 2011

Leaders from some of South Africa’s largest companies have added their voices to the global call for more progress and collaboration on the international climate policy agenda. Some 25 local companies and hundreds of CEOs from around the world signed the Cancun Communiqué – a renewed call for “an ambitious, robust and equitable global deal on climate change”.The local signing took place at the Anglo American corporate office in Johannesburg, ahead of the United Nations Climate

Change Conference (COP16) in Cancun in December 2010. The Cancun Agreement, which was adopted by the countries participating in the conference, provides for action to reduce emissions by both developing and developed countries. It includes a framework for avoided deforestation and establishes a Green Climate Fund to help disburse money needed to help developing nations combat climate change. It also includes an Adaptation Framework and Technology Network to support the deployment of low carbon technology. And while there was recognition of the need to reduce emissions to hold the increase in global average temperature to below 2°C, with the first Kyoto Protocol commitment period due to end on 31 December 2012, there are still a lot of issues to be resolved before it will be possible to reach agreement on what comes next. It is also widely recognised that the role of the private sector in climate change is a critical one, not only for financing and technology but also for delivery of mitigation and adaptation policies. So as the eyes of the world turn to South Africa as it prepares to take up the mantle of leadership from the Mexican government as the host of the international climate negotiations in 2011, Anglo American is doing its bit by ensuring that the climate change strategy that was approved at the end of last year will put us in a good position to be part of the solution to this global issue.

The Waterberg Estate, which is associated with Anglo American through its coal bed methane (CBM) project, has gained a new tenant following the recent release of a female cheetah onto the wilderness property. According to Waterberg's game farm manager Rudi van Wyk, the cat was discovered trapped in a fence. After treating the animal’s injuries, local veterinarian Dr Neil Kriel contacted van Wyk to ask if the animal could be relocated to the Waterberg property.

“The estate is one of the best options for releasing carnivores as the majority of farms in the region are inhabited by livestock and game and the owners are unwilling to accept predators,” says van Wyk. He was able to reach an agreement with the estates department of Anglo American's thermal coal business to sanction the release, as it will strengthen the gene pool of the estate's cheetah population.

SA BUSINESS TURNS UP THE HEAT

SAFE HAVEN FOR ENDANGERED SPECIES

“Climate change is one of the

defining challenges of our era.

Integrated actions are required by

all if we are to counter its potentially

devastating effects.”

GODFREY GOMWE, executive director

of Anglo American in South Africa

01

FEBRUARY 2011 | 17

CONNECTING SAFETY, SUSTAINABILITY AND PROFITABILITY

The ‘injections’ come in the form of an early morning teleconference held every three months, with more than 100 employees from New Denmark, Goedehoop, Greenside, Kriel and Zibulo collieries dialling-in for half an hour to share tips and information regarding falls of ground. The teleconferences take place at 6:30am so that both incoming and outgoing shifts can be accommodated, and posters are sent to each mine beforehand outlining actions, objectives and do’s and don’ts which guide the conversation. Each session also has a practical component in which teams simulate situations or conduct sessions underground, in order to show real-life examples of hazards and how to identify and secure them.

UNDERGROUND SAFETY GETS A SHOT IN THE ARM

The Sishen South iron ore project is forecast to be ahead of schedule and under budget – placing it in the top 5% of all mega-projects worldwide, according to Independent Project Analysis. This is no small achievement, considering that 68% of mega-projects typically fail, while 25% are over budget due to unclear objectives. As part of Kumba Iron Ore, Anglo American’s iron ore business in South Africa, the Sishen South project is expected to be completed ahead of the targeted April 2012 date, and below the total approved budget of R8.5 billion. What’s more, it is also lost-time injury (LTI) free. In October, the project achieved seven million LTI-free man hours – an impressive feat for a greenfields project, as these statistically tend to perform at a lower safety benchmark than stable operations.

ON BUDGET, AHEAD OF SCHEDULE AND LTI-FREE

Since five underground mines at Anglo American's thermal coal business started their fall of ground safety ‘injection’ campaign more than two years ago, they have all operated without a single fall of ground fatality.

01 Climate change remains one of the defining challenges of our era.

02 An underground miner at Thermal Coal.

03 The team at the Sishen Iron Ore project celebrates their LTI-free milestone.

04 The Sishen Iron Ore project.

02

03 04

18 | FEBRUARY 2011

The promulgation of the broad-based black economic empowerment codes has forced South African businesses to

closely examine not only the amount of their enterprise development (ED) spend, but also the impact of that investment. As a result, more and more corporates are moving towards compliance. “We consider ourselves to be the market leader in this fi eld,” says Nick van Rensburg, managing director of Anglo American Zimele, the Group’s enterprise development programme. “Our fi gures speak for themselves. Since 2008 we have invested R438 million in 737 businesses, covering 973

transactions and employing 14,684 people. This is testament to the success of our partnership approach, which combines equity, fi nance and support, and which has set the benchmark for supporting entrepreneurs in South Africa.” Van Rensburg points out that demand for ED funding is greater than ever, with the recession causing an infl ux of new business owners in the small and micro sectors. “Many people, some by choice and some by necessity, are turning to small or subsistence businesses as a last resort,” he says. That said, even established small businesses have found it tough to keep their doors open, and a number of Zimele benefi ciaries, particularly

IN TOUGH TIMES“Substantial, sustainable

enterprise development can

only take place in a growing

economy, and the past few

years have taken their toll on

this sector.” Nick van Rensburg,

managing director of Anglo

American Zimele, looks at some

of the trends and achievements

of 2010, and what lies ahead for

the programme.

IN TOUGH TIMESFINDING NEW GROWTH

FEBRUARY 2011 | 19

FINDING NEW GROWTH IN TOUGH TIMES

within the consulting fi eld, have suffered badly. For many, business has simply dried up, and between 20 and 30 Zimele-supported businesses went ‘into care’ in the past two years. “However, we are starting to see some recovery,” van Rensburg points out. “Most of these businesses are getting back on their feet, and are still alive and trading.” Tough economic conditions aside, the past year has been a very successful one for Zimele, which reached some critical milestones and continues to achieve global recognition. It was the fi rst South African mining initiative to be recognised by Business Call to Action (BCtA), an international partnership focused on small business development. Primarily through Zimele, Anglo American is committed to creating and sustaining

25,000 jobs in up to 1,500 new businesses by 2015. “Zimele has taken up this challenge at our South African operations and we are motoring towards achieving that,” says van Rensburg. “The programme has gathered tremendous momentum this year, reaching an average of two transactions concluded per day. If the last few months of 2010 were anything to go by, we could soon reach three deals per day.” Although Zimele is not designed to generate profi t, it has maintained a strong recovery rate on the loans it provides. In doing so, it has been able to repay some R79 million of its own loan back to Anglo American. For van Rensburg, however, the most important achievement of the past year has been Zimele’s

increasing reach into the labour-sending areas of Anglo American operations. “We opened seven new small business hubs in 2010, which will grow to a grand total of 27 by end of the fi rst quarter of this year – all of which are in poverty stricken and labour-sending areas such as the Eastern Cape and Bushbuck ridge,” he says. Linked to this is the recent launch of the Olwazini Fund, which works in conjunction with local sector education and training authorities to provide training and skills development for entrepreneurs. “We fi rst train and then help our entrepreneurs to draw up a proper business plan. Then we provide funding for the equipment or resources they need to get started – typically in community-based

01 Tebogo Clement Masmola is the owner and operator of TM Electronics, a television and electrical repair shop in Ratanda Township near Heidelberg. Tebogo is also a benefi ciary of Anglo American Zimele's Olwazini Fund and has enrolled in its entrepreneurial training programme.

02 Sheila Ditsele registered her company, Lerumo La Basadi Cleaning Services, and received funding from Zimele's Community Fund, in 2009.

03 A loan from Zimele's Community Fund helped Gerrit Willemse (left) pictured with Harold Mouton, open a branch of the Drain Surgeon in Kathu, Northern Cape.

“I started a business and realised I had something good, but no investor believed in my idea. I began to think that funding was meant for just a few, but then I went into the Anglo American Zimele offi ces and found partners, friends, mentors. They helped turn my dream into a reality. I now know I have arrived at that place I heard about on television a couple of years back: ‘South Africa – alive with possibility’.”KAGISO MONTOELI, Jelly Corner

01

02

03

20 | FEBRUARY 2011

“Anglo American Zimele changed my life significantly by giving me a loan that made my dream of graduating from employee to employer come true. Today Vukani Musa Construction offers employment and skills development opportunities to 68 people and, according to my own assessment, each employee looks after at least four family members.”JOSEPH KENTE, Vukani Musa

Established in 2004, Foodworx Catering provides catering services to private and corporate clients in the Rustenburg and Lydenburg areas. In July 2010 the company approached Anglo American Zimele for assistance in setting up a BEE structure. The company now has a level 4 BEE rating, with 30% being black-owned thanks to a strategic partnership with the Mtshali Family Trust. In addition, Zimele granted a R1 million loan facility, and paid R650 000 for a 10% stake in the business. Business is busier than ever! Foodworx currently produces around 4,500 high-quality meals per day, with services ranging from contract, industrial and corporate catering to private functions, conferences, events and weddings. Indeed, the global recession has dented neither Foodworx’s success nor its optimism for the future. “Our passion and our service have consistently grown turnover and we believe that in five years we will be a major player in the outsourced catering industry,” says Oupa Mtshali, commercial director. “We will have increased our foothold in the mining industry and governmental institutions as well as the private sector. We will be the benchmark company within the catering industry in the North West Province.” Mtshali points to the team's ability to keep in close touch with their customer base as one of the differentiators that sets the company apart. “Whether it’s a client who needs a single platter or a large company requiring catering for a corporate function, we offer the personal touch, attention to detail, great quality and ingredients prepared in a unique and delightful way.” However, their business isn’t only about food. “We minimise energy and water consumption in storing and preparing food, improve recipes to optimise fresh and organic foods, manage wastage meticulously and also contribute to education in our industry through learning opportunities,” says Mtshali. This sense of responsibility also extends into community initiatives, with the company being directly and indirectly involved with numerous local charity organisations. Foodworx is known throughout the North West Province for its integrity, professionalism and reliability, and the business is now looking to expand its markets in Mpumalanga through the gateway of Lydenburg.

businesses linked to crafts such as welding, knitting, sewing and beading.” The Olwazini Fund has concluded 35 transactions to date, creating 84 new jobs. Some 99 people are currently in training with 60 at an advanced stage of training and another 25 who started a new class in January. “These are small projects, but they are happening right in the heart of communities, where they are needed most,” adds van Rensburg. Another area of achievement is Zimele’s Community Fund, which maintained a 90% loan recovery rate and ended the year with 421 transactions concluded (total to date is 873) – substantially ahead of the target of 280. “There are not too many programmes in the development arena that have been able to achieve and maintain this recovery rate,” says van Rensburg. The Community Fund was duly recognised for this, winning a 2010 Applaud Award – the annual Anglo American Employee Excellence awards – in Rio de Janeiro in October. While development capital is, by nature, high risk and low interest, there are also

FOODWORX GETS A BIGGER BITE OF THE PIEGrowing a family business into an enterprise with

three industrial kitchens and a team of 80 staff in

just six years is powerful proof that this company has

found a formula that cannot be beaten.

a number of high-value projects in which Zimele takes an equity stake, and which promise to yield considerable returns. Two such projects are African Nickel (a R20 million staged investment for which mining rights and the water use licence have already been applied), and the Mzimbithi coal project in Mpumalanga, which is at bankable feasibility stage with a potential value of between R600 million and R800 million. In considering the year ahead, van Rensburg believes it will be a busy one for Zimele, not least because of the stringent targets that the programme has set for itself in terms of local procurement, both through its Supply Chain Fund and the Community Fund. “We are planning a major upgrade of our systems to cope with the growth of our various funds,” he explains. “We are also formalising our mentorship programme to give it more structure, more focused management and a far more proactive approach. “Our total goal for 2011 is to conclude 712 development deals through our various funds. I am confident that we will meet and even exceed that.”

FEBRUARY 2011 | 21

The Anglo American Zimele formula is simple, and it works. By funding, training

and mentoring emerging black businesses in mining communities, this initiative shows that the biggest impact a mine can make is above ground. Together, Zimele’s four funds have interests in a diverse portfolio of businesses that achieve a collective annual turnover of R1.7 billion.

1. Anglo American Khula Mining FundThis is a joint initiative with Khula Enterprise Finance Limited, a government-owned entity that promotes SME development. The fund provides equity and loan finance to emerging, black-owned mining companies, as well as technical support during the high-risk

exploration and pre-feasibility phases, to help grow them into commercially bankable enterprises.

2. The Supply Chain FundThe Supply Chain Fund helps Anglo American’s procurement departments to identify appropriate BEE suppliers and channel business opportunities to black-empowered SMEs. It supports BEE enterprises through equity and loan finance, as well as hands-on support, business guidance and skills transfer.

3. The Community FundThe Community Fund provides seed and working capital for entrepreneurs and emerging businesses in the communities in which Anglo American operates, as well as poverty-stricken and labour-sending areas. It is funded and staffed by our thermal coal, platinum

and iron ore businesses in South Africa, as well as De Beers. The geographic footprint of the Community Fund and its network of small business hubs has changed the lives of many, both directly through funding and indirectly for families of the entrepreneurs.

4. The Olwazini FundThe Olwazini Fund is Zimele’s newest fund and focuses on helping historically disadvantaged individuals – particularly women, the young and disabled – to establish and operate their own small businesses. Loosely interpreted, the Zulu phrase ‘Zimele Olwazini’ means ‘to be independent through knowledge’. This fund provides small business loans of up to R20,000 per proposal at preferential interest rates to individuals who successfully complete its training programme.

AS EASY AS 1-2-3 … AND 4

IN BRIEF:

What are the financial funding criteria?

Maximum funding per deal:

Supply Chain Fund –

R5 million (equity and loans)

Anglo American Khula Mining Fund –

R20 million (equity and loans)

Community Fund –

R1 million (loans)

Olwazini Fund – R20,000 (loans)

For the Supply Chain Fund and the

Anglo American Khula Mining Fund,

Zimele acquires minority equity

participation (10-49%).

Working capital requirements are

currently funded through shareholder

loans at various interest rates with

commercial repayment terms and

conditions.

Supply Chain Fund at prime interest rate

plus 1% p.a.

Anglo American Khula Mining Fund at

prime interest rate p.a.

Community Fund at 6% interest rate p.a.

Olwazini Fund at 6% interest rate p.a.

FINDING NEW GROWTH IN TOUGH TIMES

01 Eunice Oliphant is the owner of a small community café in Ratanda Township near Heidelberg. She has been funded by Anglo American Zimele's Olwazini Fund and has enrolled for entrepreneurial training in business management.

01

22 | FEBRUARY 2011

It has been a full, exciting and challenging year for corporate social investment (CSI) at Anglo American, following the

implementation of a revised strategy for the Chairman’s Fund in 2010. This strategy has seen the fund evolve from a broad-based, largely reactive CSI channel, to one that complements localised business unit initiatives by focusing on projects with national reach and/or national impact. “While the Chairman’s Fund has always applied strict criteria in terms of the sustainability and governance of any project applying for support, this support has never been limited to a particular size or type of project, or subject to specific outcomes,” explains Norman Mbazima, chairman of the Anglo American Chairman’s Fund. “Our new strategy has refined this approach by setting clear funding objectives and impact measurements, and by focusing on projects that are of national significance – either by virtue of their size and reach, or their potential to improve an entire system.” As a pioneer and recognised leader of CSI in South Africa, the Chairman’s Fund has, over the past year, supported more than 240 projects and channelled more than

R17.6 million into infrastructure projects in education, health and sustainable welfare. While the shift in strategy has meant saying goodbye to some of the organisations funded in the past, it has also enabled Anglo American to start building the blocks for funding that has more impact. “Historically, the Chairman’s Fund has provided a lot of localised support in and around our operations,” says Mbazima. “In many cases these projects are now self-sustaining or can be accommodated by the business units’ own CSI budgets, freeing us up to do more work in labour-sending areas and on a national level. “For example, in the past year we have worked with a number of projects in the Eastern Cape, such as the Jalamba Clinic and the Agri-livelihoods initiative, both of which are co-funded by Anglo American’s platinum operations.” Although a detailed annual review is only scheduled for March, Mbazima is confident of the fund’s achievements to date. “We have implemented most of the revised strategy, and this has been met with enthusiasm by the non-government

NEW HORIZONSThe past year has seen an important shift in social investment at Anglo American, following a change in focus to high-impact projects with national footprints and measurable results. Norman Mbazima, chairman of the Anglo American Chairman’s Fund, offers this overview.

01

01 The Blackhill Schoongezicht school, which was donated to the community by Thermal Coal’s Landau colliery.

02 The Kriel model farm is a rehabilitated area that has been donated to locally disadvantaged people to start a vegetable growing project. The produce is sold to the Kriel colliery canteen as well as to a variety of wholesalers in Witbank and Kriel.

FEBRUARY 2011 | 23

organisation sector,” he says. “Our beneficiaries seem confident that we are well informed of what is happening in their environments and are providing funding in an appropriate way.” At the core of the new strategy – and the focus of much of the fund’s efforts in 2011 – are the new measurement and evaluation systems, which will give the team critical insights into key projects and long-term impacts, Mbazima says. “We are identifying impact indicators and establishing specific objectives in each sector to which we channel funding,” he explains. “For example, in the field of education, the goal of improving the quality of early childhood development (ECD) would be linked to improving the ability of pre-primary teachers and the environments in which children are taught. We would therefore look to support ECD organisations that focus on improving teacher quality and training. “In the medium to longer term, we would then be able to measure key indicators such as how many ECD sites have been reached; how many of these sites have teachers qualified to a certain level; how many of the children are school-ready, and similar.” While this level of detail cannot be researched and measured in every single project supported by the Chairman’s Fund, Mbazima says that they aim to implement this on at least 25% of funded projects by the end of 2011. “While some beneficiaries – especially those who report to multiple sponsors – are already geared up for such detailed reporting, others are not,” he says. “We will therefore supply a top-up fund of 5% to 10% of the original grant to help these projects strengthen and develop their monitoring capabilities.” The past year has seen the

Chairman’s Fund working more closely with business units within Anglo American, including the communication department, the social performance unit and the social development teams at each of the business units. This is helping to integrate the fund’s activities, experience, knowledge base and best practices with the rest of the Group, while profiling more of its work to a broader audience. Looking forward, Mbazima says that the focus for 2011 will be on establishing the right projects in the right focus areas, getting the reporting and monitoring systems up and running, and continuing to establish co-funding partnerships. However, it won’t be without its challenges. “There are some sectors that we still need to understand better, for example in the area of youth development, and we will be focusing on this in the year ahead.” The toughest task, he adds, is still how to choose which projects receive support, and which don’t. “Only one in five applications are successful, and it is very hard to say no to projects that request little, but which have obvious need and passion for the cause. We know we can’t fund everything, so we have to make these grants meaningful and strategic. “It is a privilege to be in a position to support society and communities the way we do, but with that privilege comes great responsibility. We are very conscious of the fact that one bad decision could hamstring other opportunities for these people and projects. This is why we put so much effort into understanding each sector’s dynamics and trends, and determining whether the organisations that apply for funds are doing work that makes a real impact.”

AWARDS AND ACCOLADESThe Chairman’s Fund gained important recognition for its work in 2010, with a couple of unexpected industry endorsements, including:l A special services award from the SA Federation for Mental Health,

at their 90th anniversary ceremony. This followed nominations from two separate mental health societies.

l A nomination for an “exceptional funder” award by the National Institute of the Deaf, in recognition of the Chairman’s Fund’s financial contribution towards assisting and empowering people with hearing loss.

NEW HORIZONS

FLAGSHIP PROJECTS IN 2010

A key event for the Anglo American Chairman’s Fund in 2010 was the Maths and Science Excellence Awards, which have become an annual highlight on the school calendar. Hosted in conjunction with the Department of Basic Education, this year’s event saw both the deputy minister of basic education and the director-general attend – testament to the recognition and value placed on the Chairman’s Fund’s participation.

Another highlight was the donation of R14.6 million to a skills development project in the Northern Cape, following Anglo American’s sale of Black Mountain mine.

The Fund also recently embarked on a partnership with the Department of Education in KwaZulu-Natal, which aims to improve the management skills of district officials and principals at schools in the region.

The Fund is one of a number of partners in the South African Numeracy and Literacy Chairs project, which integrates academic research into numeracy and literacy with primary school initiatives to effect developmental change. Chairs have already been appointed at Rhodes and Wits Universities, to start work 2011.

02

Some 25 years ago, St Mark’s founding principal, Peter Anderson, discovered a loophole in the apartheid system that allowed him to establish a school for black children in a so-called “homeland”. And so St Mark’s College was born, in what is now known as the Limpopo Province.

Today, the school is still exceptionally successful and continues to make a difference to children’s lives on a daily basis. “In 1985, my wife and I opened the doors to the first 60 young boys and girls with only three very inexperienced and unqualified teachers, and we began our mission to rebuff the archaic educational system,” says Anderson. “Since then, we have produced a generation of boys and girls who were schooled with independent minds as a result of a first-rate education.” The school’s initial funding was boosted through the support of the Anglo American Chairman’s Fund. Its chairman, Norman Mbazima, notes that Anglo American takes great pride in the fact that an educational initiative that represents such social change and

which it helped to create so many years ago, continues to thrive. “As St Mark’s founding corporate social investor, the Anglo American Chairman’s Fund is extremely proud that our backing of the school has been crucial in the development and success of a host of people who would otherwise have lacked quality academic opportunities,” he says. Since apartheid was officially abolished in 1994, the school is now split and run equally between the government and the Anglican Church, says Anderson, adding that its matric results compare more favourably than many other government-run schools, with a recorded pass rate of between 80% and 90% each year. Since the school was founded, the Anglo American Chairman’s Fund has provided ad hoc support towards the building and upgrading of the school, including provision of supplies for the institution’s primary school, dormitories and dining hall. “St Mark’s illustrious history, excellent results and promising future has made a real difference in the lives of its students,” says Mbazima. “It is a true South African success story, one with which the Anglo American Chairman’s Fund is proud to be associated.”

HAPPY 25TH, ST MARK’S!

01 Sarah Morrison (left) and Deepa Patel (right) of the Anglo American Chairman's Fund, with Godfrey Gomwe, executive director of Anglo American in South Africa, seen at the St Mark's College 25th Anniversary Dinner for alumni, held at the Birchwood Hotel, Boksburg.

02 A representative of Dendron Secondary School in Limpopo, receives an accolade for top maths and science performance from Pranill Ramchander of Anglo American. Director-general of the Department of Basic Education, Bobby Soobrayan, looks on.

24 | FEBRUARY 2011

01

NEW HORIZONS

FEBRUARY 2011 | 25

The annual awards recognise the ten top achieving maths and science public schools in South Africa, with each school receiving a R150,000 donation from the Anglo American Chairman’s Fund to promote this field of study. These schools are selected from 200 which are identified by the Department of Basic Education as having especially strong maths and science results, with a 60% pass rate for mathematics needed at a minimum. The 2010 top ten winners were: Dendron Secondary (Limpopo), Durban Girls’ High (KwaZulu-Natal), Eunice High (Free State), Fairmont High (Western Cape), Grey College (Free State), Hoërskool Waterkloof (Gauteng), Hudson Park High (Eastern Cape), Parktown High School for Girls (Gauteng), Stellenberg High (Western Cape) and Westville Girls’ High (KwaZulu-Natal). Godfrey Gomwe, executive director of Anglo American in South Africa, says that the awards are intended to spur all public schools and to encourage those school principals and teachers who succeed despite their challenges above and beyond their peers. “Last year saw only 80,000 maths passes of any sort throughout the matric system from a cohort of 550,000 children,” he says. “That result is particularly disturbing given that there were 1.15 million students enrolled in Grade 10 two years before.”

With more than 6,200 students, Rhodes University boasts the highest per capita research output and undergraduate pass rate of any other South African university. It also has the only open academic library (accessible to the general public) in South Africa. This library is now receiving an all-important facelift, as part of an ambitious extension project worth R100 million. With support from the Anglo American Chairman’s Fund, the new library will seat over 26% of the student population (20% is an international standard) and will provide access to electronic information resources, with computer workstations available 24 hours a day. The building will house four faculty libraries, namely commerce, social science, humanities and science, each overseen by a specialist subject librarian. The Faculty of Humanities is the largest of the four and includes the School of Journalism – one of the most celebrated institutions of its kind in South Africa, if not Africa. The Commerce Faculty Library will include subject collections on economics, commerce and communications, accounting, management, marketing and advertising. Norman Mbazima, chairman of the Anglo American Chairman’s fund says, “Anglo American supports several socio-economic development initiatives and in 2009 the Chairman’s Fund’s contributed 42% of its R72 million corporate social investment spend on education initiatives in South Africa. The investment in equitable access to quality education and well-equipped facilities, such as Rhodes University’s faculty library, contributes to the upliftment of education excellence in the country and acts as a catalyst for development and economic growth.”

IT ALL Since 2004, the Anglo American Chairman’s Fund has contributed almost R6 million to the annual Maths and Science Excellence Awards – a much-needed incentive, considering that less than 15% of all matriculants in 2009 passed maths.

“Tonight's awards are a grand example of some South African schools' commitment to nurturing an environment of achievement and world-class results, specifically so in the field of mathematics.”PRANILL RAMCHANDER, Anglo American Chairman's Fund trustee

RHODES LIBRARY STARTS A NEW CHAPTER

02

26 | FEBRUARY 2011

The sun shone brightly for the children at the Greater Middelburg Workshop for the Disabled, when employees from Goedehoop colliery joined them to celebrate Heritage Day. The colliery donated food, colouring and craft materials, as well as school bags for each child. Community development superintendent David Netshieneulu, explains that the centre provides learning opportunities and skills training for disabled youngsters, in crafts such as leatherwork, beading, mosaics and tapestry. “There is a huge need for this type of facility in the area and the word is out that there is now a safe place where parents can take their children to receive training and stimulation,” he says.

WHERE THERE’S A WILL, THERE’S A WAY TO HELP OUT

Nobelungu Mashinini, the gogo (grandmother) who inspired the ‘Basa njengo Magogo’ initiative, has become a homeowner for the very first time, following her contribution to the environment and the health and wellbeing of thousands of families. The Basa njengo Magogo campaign, which advocates a healthier and more cost-efficient fire-lighting method in township homes, has been supported by Anglo American’s thermal coal business for a number of years. Gogo’s innovative technique for building cooking and heating fires, which was tested by the Council for Scientific and Industrial Research (CSIR), yields a fire that produces 80% less

smoke and uses half the amount of coal. In recognition of her contribution to the community, Thermal Coal – together with the Department of Water and Environmental Affairs and the Central Energy Fund – have built Gogo a fully furnished home, which she took ownership of in December. According to Mmathabo Mrubata of Onke Training, who has been responsible for the publicity and educational aspects of the project, the Basa njengo Magogo fire-lighting method has been adopted as best practice for all coal-burning municipalities across South Africa.

GOGO’S LIFE LIGHTS UP WITH A HOME OF HER OWN

01

03

02

NEW HORIZONS

FEBRUARY 2011 | 27

In the heart of Johannesburg’s inner city is a treasure chest of traditional and contemporary South African and international art from the 16th century to the present day – the Johannesburg Art Gallery (JAG). This major metropolitan museum includes collections reflecting the artistic heritage of all South Africans, and has been supported by the Anglo American Johannesburg Centenary Trust since 1986. Most recently, the trust is providing JAG with a R512,500 grant to cover the production of an interactive marketing catalogue that will, for the first time, provide a comprehensive overview of all of the gallery’s collections, comprising around 9,000 artworks. The catalogue will include a hard cover book for local and international distribution; an educational printed supplement; and a CD-ROM based interactive guide.

HELPING JAG TO PAINT A CLEARER PICTURE

Community health and wellbeing is about more than building clinics or providing medicine. It is also about empowering communities and building social structures that promote mental and physical health as well as a positive approach to life.

This is exactly what the Angus Gillis Foundation (AGF) strives to achieve by focusing on strengthening the family unit; identifying and training community leaders; and establishing income-generating projects. Operating in the Eastern Cape region, the AGF’s recent activities include the AGF Positive Health Programme, which strives to improve the wellbeing of families while decreasing the mortality rate among children and pregnant mothers. Supported by the Anglo American Chairman’s Fund, this programme works with self-help groups and trains community health champions. It provides bi-weekly transport to a Grahamstown clinic, and offers food garden training and support. The programme has already been so successful, that the local government has agreed to establish a satellite clinic at Fort Brown and the government mobile clinic has increased its number of visits. To date, nine community health champions have been trained to give people better access to social grants as well as tuberculosis treatment. The Chairman’s Fund grant is now being used to employ a Positive Health coordinator and to train the community health champions. The programme is based on the CC Africa Model, ‘Positive Health’ - a tried and tested empowerment model that provides holistic, integrated health support to uplift rural communities.

MAKES A POSITIVE DIFFERENCE

01 & 02 Gogo Mashinini, whose fire-lighting innovation has been adopted by all coal-burning municipalities, is now the proud owner of her own home, thanks to a R100,000 donation from Thermal Coal.

03 A member of the Greater Middelburg Workshop for the Disabled is clearly delighted at having received his school bag from Goedehoop colliery.

04 Eye testing conducted by the Angus Gillis Foundation, as part of the Positive Health campaign.

04

Anglo American’s

goal is to see zero

new HIV infections

each year, no

people who get

sick or die from

HIV, and no babies

being born HIV

positive. And it

can be achieved,

believes Dr Brian

Brink, chief medical

offi cer at Anglo

American.

AND A BROADER PERSPECTIVE

Achieving this goal will require the public sector, private sector and civil society to co-ordinate their efforts towards an improved health system for the benefi t of the entire population,” says Dr Brink. “A standalone

response to HIV/AIDS will never succeed unless it is supported by a broad-based strengthening of the health system.” The starting point, he explains, should be at primary care level, encompassing community health work, clinics and community health centres. To this end, Anglo American is currently engaging with the Eastern Cape Provincial Department of Health and has sponsored the writing of a ‘business plan to revitalise primary health care in four sub-districts’. This plan will be based on the Health Systems Strengthening (HSS) model as recommended by the World Health Organisation (WHO), and will seek to establish models of excellence for primary health care delivery in some of the most challenging circumstances. It will also set clear measures for improvement in basic health indicators, including HIV/AIDS, tuberculosis and maternal and child health. “The plan will aim to harness the best of what the public, private and civil society sectors have to offer, into a coordinated whole,” continues Dr Brink. According to the WHO, one of the building blocks of an HSS is the implementation of health information systems that

make standardised and generic community health information and management systems available at all health service delivery points. These enable community health workers, primary health care nurses, doctors and district health authorities to manage HIV/AIDS, tuberculosis, chronic diseases and other health challenges much more effectively. One such example is the health information system developed and implemented at Anglo American’s thermal coal business. Known as ‘The Health Source’, this system is being piloted in two NGO-run community health centres in poor rural areas. “The Eastern Cape Department of Health has also shown great interest in piloting this system in selected sub-districts of the province,” says Dr Brink. Anglo American has been a pioneer in terms of tackling HIV within the mining industry since its decision in 2002 to make anti-retroviral treatment freely available to Anglo American employees – a move that led many in the industry to follow suit. “This decision transformed our whole outlook on dealing with HIV, changing it from being an uncontrollable risk and threat to our business, to something we can manage,” explains Dr Brink. “We maintain that optimism today. We have the tools. If we apply our minds and if we have effi cient leadership, we can still turn this epidemic around.”

“

28 | FEBRUARY 2011

HIV/AIDS: THREE ZEROES

HIV/AIDS: THREE ZEROES

COVER:Anglo American's Greenside colliery, part of the Group's thermal coal business in South Africa.