Delivering lasting positive socio-economic change in our mine communities is fundamental to Anglo American. Our socio-economic development strategy focuses on leveraging core business activities to transform communities, improving the performance of local markets and public institutions, and delivering benefits through partnership.
The socio-economic environment in which mining companies operate in South Africa is characterised by high levels of unemployment, low skills and poverty.
We focus on education; healthcare; small, medium and micro-sized enterprises (SMMEs); supplier development; infrastructure; and youth development. Education and enterprise and supplier development are especially important features of our strategy as we seek to empower our communities, support sustainable job creation and public service delivery to ensure mine communities are able to thrive even after mine closure.
Community development expenditure (R million)
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| Business unit | 2017 | 2016 | 2015 | 2014 | 2013 | Investment over five years |
|---|---|---|---|---|---|---|
| Coal South Africa | 62.8 | 53.7 | 127.5 | 143.8 | 162.0 | 549.8 |
| De Beers | 32.6 | 32.6 | 42.9 | 39.4 | 52.0 | 199.5 |
| Platinum | 295.0 | 337.0 | 546.0* | 236.0 | 204.0 | 1,618.0 |
| Kumba | 98.7 | 58.9 | 174.6 | 202.3 | 254.0 | 788.5 |
| AASA | 489.1 | 482.2 | 891.0 | 621.5 | 672.0 | 3,155.8 |
Coal South Africa
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During the year, Coal South Africa's Landau and Kleinkopje collieries were merged to form Khwezela – all mine community initiatives continue under a consolidated budget.
Mine community development expenditure increased from R53.6 million in 2016 to R62.8 million in 2017, owing to the approval of additional SLP projects. In terms of SLP commitments, challenges have been encountered in finalising the scope of work with the various municipalities and the Departments of Health and Education, which has slowed the rate of implementation. Thirteen of 42 projects have now progressed into implementation phase and the DMR has been contacted to evaluate opportunities for faster implementation, while a governance process has been set up to track the progress of projects. SLP expenditure in 2017 totalled R42.1 million.
In 2017, enterprise development accounted for 39% of Coal South Africa's mine community development expenditure. Through its Zimele hubs, the company supported 42 enterprises, creating 436 new jobs and sustaining 640 jobs across its operations. These enterprises had a combined turnover of R25 million.
The company spent R4 million on health-related projects, including a R1.2 million grant to the Ndlovu Trust. In terms of education initiatives, R22.8 million was spent on providing bursaries for learners to attend tertiary institutions, additional maths and science, infrastructure and sports sponsorships. A further R5.2 million was spent on assisting the Anglo American Inyosi Trust and other research groups such as Mining Dialogue 360.
De Beers
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De Beers invested R32.6 million in projects within local communities in 2017 (2016: R32.6 million) and all 12 SLP planned projects were implemented.
In 2017, R4.4 million was spent on setting up supplier development hubs and on Zimele loans (2016: R20.7 million)*. De Beers has also extended the Mining Charter requirement, whereby multinational suppliers are required to contribute 0.5% of revenue generated from their contracts with the company towards social development programmes, to all its suppliers – including South African-based suppliers.
Some R14.9 million was invested in community education and training during the year (2016: R10.4 million). Initiatives included contributing towards building a library at the University of Sol Plaatje in the Northern Cape, teacher development programmes with the University of the Free State and University of the North West, programmes to appoint additional teachers for schools in need, and maths and science programmes.
De Beers also focused on improving infrastructure. It partnered with the Kagiso Shanduka Trust and the Free State Department of Education on various infrastructure projects in the District Whole School Development Programme, which has been successfully implemented in schools in the Free State. In its fourth year, more than 60 schools have benefited from infrastructure projects; over 2,000 teachers are being supported; and in excess of 18,000 learners have undergone eyesight testing, with more than 600 learners receiving free spectacles.
* The reduction in expenditure was due to a review of Zimele, in terms of Anglo American's future requirements.
Kumba
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In 2017, Kumba spent R106.7 million (2016: R67 million) on community development, including an R8 million contribution to the Anglo American Chairman's Fund. Some R25.3million of this was spent on SLP projects. The company increased its infrastructure investment to R17 million (2016: R7.5 million) to partner with Tsantsabane and Gasegoyana municipalities, providing road, school, water and health infrastructure, and maintenance.
R23.4 million was used to enable education and skills development during 2017, including R10 million donated to Sol Plaatje University to complete construction of its library and student resources building.
In 2016, Kumba had put the development of the Kathu Industrial Park on hold owing to the sharp decline in commodity prices, which had a negative impact on property prices and on tenant appetite for the proposed development. During 2017, as a result of a recovery in ore markets, Kumba and the Industrial Development Corporation (IDC) re-evaluated the potential for development and decided to proceed with the investment. Kumba also made a R21 million commitment towards the construction of the park. Once complete, the industrial park will include fully-serviced facilities for suppliers, SMME development and skills training services, small-scale production, and conference facilities – setting it apart from existing Northern Cape industrial sites.
Kolomela and Sishen mines conducted SEAT assessments in 2015 and 2017. The new Sishen SEAT report will be published in 2018. Kumba has established a Sishen Iron Ore community development trust. The trust holds 3% equity in the company, on behalf of host communities, and invests in community development programmes in partnership with ommunities. In 2017, Kumba paid R209 million to the trust in dividends, which will be used to benefit the community through various socio-economic development programmes.
Kumba is an active participant in a collaborative process, led by the leadership of manganese and iron ore mining companies in the Northern Cape, to develop and implement a shared-value strategy for socio-economic development in the region. Introduced in 2017, the process involves the selection of projects for joint implementation, the development of strategies for engaging priority stakeholders and a shared vision with stakeholders.
Following the relocation of 95% of households from Dingleton to Siyathemba, a post-resettlement working group was established, composed of representatives from the Siyathemba community, Kumba and the Gamagara Local Municipality. Its objectives are to safeguard livelihood restoration and community integration of the Siyathemba community into Kathu. Part of the process includes mitigating negative impacts on the socio-economic livelihood and sustainability of the relocated community. Structured engagements were therefore facilitated to agree with the community on initiatives, processes and structures needed to achieve this. A final agreement on financial benefit for households was agreed with the Northern Cape provincial government and, in December 2017, the Kumba CEO and the Premier announced a R100,000 cash benefit for each household, and a R60 million commitment by Kumba to be used for identified initiatives. Engagements and negotiations with the Siyathemba community continue.
Platinum
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Platinum spent R295.4 million on mine community development in 2017 (2016: R331 million). The company's primary objective is to enhance its social licence to operate by making lasting contributions to mine communities and through inclusive stakeholder engagement, where social imperatives are agreed in collaboration with host communities. The key levers of Platinum's strategy are community benefit (Alchemy, the community share ownership programme; socio-economic development; and SLP commitments) and stakeholder relations (engagement frameworks that ensure communities and government are part of the development in their jurisdictions).
Platinum's corporate social investment (CSI) budget includes its contributions towards the Alchemy Trust, community development by its joint venture partner at Modikwa Platinum Mine, and its contributions to the communities around its process divisions. Its contributions also include commitments such as the Limpopo Regional socio-economic development work.
Of the 48 projects undertaken in 2017, 16 have been completed and 32 are continuing in 2018. Key projects include infrastructure development – Platinum is supplying water to 42 villages (70,000 people) in Mapela around its Mogalakwena operation. SMMEs from each village are also empowered through this initiative, as they deliver the water. The total cost of the project in 2017 was R59 million. Around Twickenham, Platinum is continuing with the project to electrify 700 households in Ga-Mampa and Phasha-Makgalanoto.
Education is also a major focus. Platinum signed a memorandum of understanding (MOU) with the Department of Education on the delivery of all education-related projects, which included a R12.7 million contribution to the Limpopo Education Trust to build a new Seritarita school. In 2017, Platinum also handed over two administration blocks and classrooms to Langalibalele and John Pedro schools in the host communities around Mogalakwena.
Platinum is looking at new ways of building responsible citizenship, and the leadership and character-building programme being piloted at Mogalakwena mine is showing good progress, with more than 540 learners attending after-school moral-regeneration and character-building lessons. More than 80 unemployed graduates have been trained and employed as coaches and facilitators. The programme has led to young people's attitudes towards school, learning, their community and themselves changing so that they are more positive about their lives and their future. The programme is being expanded in 2018 to other mines such as Amandelbult and Twickenham.
As part of its contribution to improving access to primary health around its communities, Platinum completed and handed over the Sekuruwe, Maseven and Naledi clinics, all in partnership with the Limpopo Department of Health.
