Following a challenging year for our organisation and the mining industry in general in 2015, 2016 represented a welcome reprieve. We have renewed our resolve to deliver on our transformation agenda – within the organisation, in communities where we operate, and in labour-sending areas. It is heartening to see what we have achieved in spite of a difficult and uncertain operating environment and reduced resources. I believe our Transformation Report highlights the many ways we have adapted and improved, how much we have done, as well as how much further we still need to go.
DELIVERING BEYOND COMPLIANCE
Across our operations, there is an understanding that transformation is much more than simply a compliance requirement; it is a business imperative.
In 2016, Anglo American South Africa operations continued to meet, and in many areas well exceed, the 2014 targets of the 2010 Mining Charter, which remain in place until a third iteration is implemented.
Let me reflect on key areas of our performance this year that stand out for me.
FOSTERING DIVERSITY AND INCLUSION
Our commitment to transformation is convincingly illustrated by our sustained employment equity (EE) profile.
Despite ongoing organisational restructuring and the associated drive for efficiency within the business units, we have largely maintained the EE gains achieved in recent years.
Across our workforce, aggregated levels of historically disadvantaged South African (HDSA) representation have continued to exceed the Mining Charter’s minimum requirements. By year-end, aggregate HDSA representation at management levels was 65%, with women holding 24% of management positions.
INVESTING IN OUR SKILLS BASE
In 2016, we placed a greater focus on developing skills through on-the-job training, which is more cost-effective than external training. Our business units and functions collectively expended R1.2 billion on HDSA training and development, representing an aggregate 11.3% of annual HDSA payroll (excluding the 1% skills levy). Our ongoing investment in skills development outside the business continues to support hundreds of individuals each year to develop their skills and improve their job prospects.
OUR DIRECT ECONOMIC CONTRIBUTION
It is through our core business activities – employing people, paying taxes and procuring goods and services locally – that we make our most significant positive contribution to the South African economy. In 2016, we contributed R14.9 billion in direct and indirect taxes, R27.8 billion in salaries and wages, and R11.4 billion in local procurement expenditure.
PREFERENTIAL PROCUREMENT AND SUPPLIER DEVELOPMENT
We have maintained a strong preferential procurement performance. We spent R27.1 billion with BEE-compliant companies across the business units, accounting for 78% of our total expenditure in South Africa. All business units continued to significantly exceed the Mining Charter’s procurement spend targets in all areas.
ENTERPRISE DEVELOPMENT
Our longstanding Zimele enterprise-development initiative continues to be a catalyst in the development of emerging black businesses, empowering entrepreneurs and facilitating job creation. In 2016, Zimele concluded 204 transactions and provided R121 million in funding for 110 businesses that collectively employed 3,992 people and generated turnover of R692 million.
HOUSING AND LIVING CONDITIONS
Our investment in providing quality housing and improved living conditions for employees and their families is a pillar of our contribution to community development. Our levels of expenditure have declined over the last two years, curtailing our progress in certain areas, notably housing development. In 2016, Anglo American South Africa spent R1.6 billion on housing initiatives, including expenditure on bulk services, land purchase and housing allowances. The number of employees in company housing has steadily declined over the last three years to 9,362, representing 13% of the workforce, as more houses become available through the sale of building packages or company-owned units. We continue to focus on making it possible for eligible employees to buy their own homes in suitable areas near our mining operations.
DEVELOPING SUSTAINABLE MINE COMMUNITIES
Our community development projects, which focus primarily on supporting education, infrastructure (such as roads and schools), and community health and welfare. During 2016, our businesses expended R483 million across these sectors (R530 million including contributions to the Anglo American Chairman’s Fund), of which R310 million was spent on social and labour plan (SLP) commitments and R173 million on corporate social investment (CSI) projects.
IN APPRECIATION
I feel assured that we have the strong leadership and right people to maintain our strategic intent and build on our achievements.
I am proud of our commitment to collaborative thinking and to working together to find creative and practical solutions. I thank all our employees and all our partners for their extensive contributions to supporting our efforts to create sustained value and a more prosperous and fairer society.
Lindiwe Zikhali
Head of transformation and regulatory affairs Anglo American South Africa