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Sustainable Development Report for the year ended 30 September 2012

03/People, Planet, Profit

people:
(noun) group of individuals living and working together;
linked to each other by common needs, challenges and interests

Partnering with our communities

Our context

Contributing to long-term social, economic and infrastructural development is a direct investment in the sustainability of our operations, and that of the people affected by our activities. Securing our licence to operate is much more than achieving compliance to operate within current and future regulatory environments. It is the implicit and explicit acceptance or approval granted and, indeed, earned by the Company from local communities and other stakeholders. This means engaging with communities on an on-going basis to ensure the continuation of our social licence.

Historical inequalities in respect of economic opportunity, education and, indeed, access to basic infrastructure, as well as difficulties facing the state in meeting rising community expectations for social delivery, place an enormous burden on companies. Mining companies, in particular, are required to contribute to economic transformation and social delivery in line with the Broad-Based Socio-Economic Empowerment Charter for the South African Mining and Minerals Industry (amended Mining Charter).

By continuing to address the challenges facing South Africa, including poverty alleviation, job creation, education and healthcare, Lonmin is able to make a positive contribution to the communities and thus ensure our and their sustainability. We believe that proper acknowledgement of our community members achievements are a necessary step. This year we held an event that acknowledges these achievements. One such achievement is that of Tinny Modise from Bapong who, at the age of 70, passed ABET level 4. It also recognised the loyalty and dedication of Esther Seboko, one of our Home Based Care givers who has been part of our programme since inception.

Community consultation is important to our sustainability approach and the Company is committed to engaging openly and honestly with the communities that make up the GLC, including areas in the North West Province, Limpopo Province and the Eastern Cape Province. Our employees originate from various areas around the country; and this together with the unsanctioned development of informal settlements, means that our community boundaries are constantly shifting. The situation brings a unique set of challenges and additional demands regarding community engagement and development.

The GLC, with a population of close to 85,000 people, is confronted by high unemployment and inadequate infrastructure. Unemployment is as high as 43% around the operations based near Marikana for example, in comparison with the national average of 25%; illiteracy is estimated at approximately 35%, and the number of people living below the poverty line is estimated at 60%. Lonmin’s community investment programme, that reflects our Social and Labour Plan (SLP) community commitments, is a response to some of these urgent issues. We have invested close to R176 million in SLP community projects since 2007. The Company has also invested in additional community projects that are not covered in the current SLP commitments. These projects address some immediate community needs, such as: paying the transportation fees of communities to and from community programmes; building an Ipopeng community service centre; providing waste removal services, of which the baseline assessment was completed and the pilot project will commence early 2013; removal of alien invasive species that offers 30 full-time jobs to community members, and building four houses in celebration of Madiba Day, occupation to take place by end of calendar year 2012. In further support of Madiba Day we provided the building material to upgrade the Bapong SAPS satellite station as well as provide material in support of the University of Pretoria Slovo Park project.

Removing invasive plants

CASE STUDY: Removing invasive plants

Lonmin’s Environment and Community departments have compiled a joint plan for the development of co-operatives within the GLC to manage and remove alien and invasive plant species, a major threat to biodiversity, found within our Marikana operations’ area. Read case study

Value of SLP community projects [graph]

Any investment in a Local Economic Development (LED) project, which is part of our SLPs, is matched to the needs identified by the integrated development plans of the municipalities in which the GLC communities and major labour sending areas are located, and the South African Government’s Departments of health and education

The Executive Vice President of Human Capital and External Affairs is responsible for this important area of work, and supports our CEO, who is directly accountable for performance in terms of Lonmin’s commitments to community development. Our community projects align with the millennium development goals that relate to the end of poverty and hunger, universal education, maternal health, child health and combating HIV/AIDS.

Proactive communication means we engage with the GLC before new projects are introduced, hold monthly meetings with ward councillors and have implemented formal procedures to deal with community queries and complaints.

The Lonmin Charter links our performance to the success of our relationships with the GLC. Further, the commitments we have made to the GLC are outlined in our Safety and Sustainable Development Policy.

Low education levels and increasing youth unemployment in the GLC were major areas of concern during 2012. To address this, we have introduced initiatives specifically aimed at increasing the number of learners passing through the education system and bridging the widening education gap between school and university. We have a holistic approach to building a better system for learners through our unique education value chain.

The Company increased our social and labour plan community spend to R39,743,935RA in 2012 (2011: R37.9 million) and tried to engage more proactively, and thus effectively, with the community. Refer to the value of the SLP community projects graph for more detail on spend. Initiatives include visits, shared programmes and active participation in the community. For example during the month of May Lonmin participated in the Shanduka Adopt-A-School day where Lonmin visited all the schools in the GLC. On the day our technical preparedness programme students did experiments with learners and shared personal experiences with the educators. Technology kits were also distributed and workshops were held with educators to facilitate the implementation of these kits.

Although Lonmin has a department dedicated to larger scale community projects our operational areas also make contributions to support the communities around our operations. These initiatives include our Supply Chain department visiting the Sonop Old-age Home providing much needed winter supplies, repairing the boiler and delivering wheel chairs. Our Process Division is paying the salaries of the staff at the Grace Help Centre (a home for abused women and children). The Process Division is also financially assisting the school governing body staff positions at the Sonop School, providing food supplies to struggling families in Twereleng and Elandskraal. Further to these contributions our PMR division supported the Muriel Brand School’s concert and a fundraiser event. The PMR is also participating in creating awareness on Leprosy, HIV/AIDS and TB. A number of other donations that our PMR provided financial contributions to the following organisations: Action for the Blind and Disabled Children, Where Help is Needed, and CANSA. The Far East Rand Hospital required proper facilities to foster abandoned babies, and with the help of the PMR it has been renovated. Our Mining Division has also adopted schools in the surrounding communities and regularly makes donations; one of these initiatives included assistance with the rebuilding of an employee’s house that was damaged by fire.

We realise that donations such as the above are charitable activities and do not have a sustainable lifespan. We have a number of other, more substantial community development programmes that form part of our social and labour plans. The Lonmin Community Development Programme has three major focus areas: community education, community health and Local Economic Development.

Phatsima Project
Phatsima Project Phatsima Project

Phatsima Project launched

The Phatsima* project that was launched in June aims to provide a platform for GLC community learners to showcase their talent using the medium of Sports, Arts and Culture. This provides an opportunity for talented community members to pursue a career in arts and culture. Ward Councillors nominated local unemployed youths who would promote the project and implementation of it. We currently have 21 promoters from the eight communities (and nine wards). To date we have received 2,247 entries and community learners indicated a 58% interest in singing with 28% in dancing. Other arts such as writing also received traction. Investment in sport included a soccer and netball tournament of 27 schools. Through the project we also saw seven children accepted to a soccer training academy.

*Phatsima: a Setswana word meaning “shine;glow”.

Community education

Our Community Education Programme has been delivering support to learners of different ages, their educators and their parents. Our chosen approach has remained consistent over this period and our work in 2012 consisted largely in building further on the foundations we had previously set.

While the scale of the demand still heavily outweighs the impact we can have as a Company, we continue to make an important, lasting and valuable contribution to the quality of life and the future prospects of the many learners whose lives we are able to touch.

Our approach is a holistic one that aims to provide support for learners who are at different stages of their educational development, from pre-school children all the way through to high school leavers. We consider our education initiatives in the context of a value chain that feeds into the employment opportunities that we can offer, or that could realistically be sought by learners elsewhere. We also complement our programmes with separate skills development initiatives for adults who have not had the benefit of a good education, to create as many opportunities as we possibly can through our community education investments.

The five pillars of our community education programme are:

  • development and maintenance of local school infrastructure;
  • learner support;
  • educator support;
  • parent support; and
  • our school nutrition programme (see details under nutrition and home-based care).
Community education value chain [flow chart]

Among the many initiatives that benefit a whole range of schools and individual learners in different ways, we have remained committed to providing on-going support to a total of 29 schools and 43 early childhood development centres in Marikana and 16 schools situated in the vicinity of our Limpopo operation.

Development and maintenance of local school infrastructure

We spent R6.6 million (US$819,000) on school infrastructure and equipment in 2012, through upgrades, donations and refurbishments. These were decided based on a scoring system that we use to prioritise those schools most in need of attention.

This year we built 20 new classrooms at four community schools and constructed ablution facilities at five schools and upgraded the electricity at Mogale High School. Internet solutions have been provided to four schools, existing computer labs at three schools have been upgraded and 40 additional workstations have been donated. In addition schools have been equipped with 300 combination computer desks.

Learner support

Expenditure on the learner support programmes amounted to R8.2 million in 2012, which was predominately focussed on high school learners. Our flagship programme, the Ithutheng Saturday School Programme, run in partnership with the Department of Basic Education, over a period of 36 weeks. This programme provides learners with the opportunity to improve their understanding of the school curriculum, with a focus on Mathematics, Science and English. This year we had 103 learners from Grade 8-12 that participated.

Training of 1,278 learners in E-learning was provided at seven High Schools through mathematics and physical science curriculum support software. We have also provided 40LA sponsorships to GLC and non GLC members.

Grade 12 learners, the final year of school, require attention as their final examinations can determine whether they will be accepted to universities. A 20-day examination preparedness programme was provided, and was attended by 183 Grade 11s and 12s. Assistance was given to these learners with university registrations. A number of community members were trained as career guidance counsellors to work with these learners. This year 1,718 contact sessions were held. At 13 schools 3,382 Grade 8-12 learners completed the Differential Aptitude Tests to assist with guidance on career choices.

We are providing a one-year full time programme to those learners that have completed Grade 12 and going to complete tertiary studies, this year 15 top 2011 Grade 12 learners participated. The aim is to increase pass rates at tertiary level.

In order to increase pass rates at tertiary level a full one-year technical preparedness programme is offered aimed at increasing the number of community members who are able to access learnership opportunities in engineering-related fields. Post Grade 12 learners (25) wrote their N1 engineering subjects and 98% passed. Of our 16 young adults 78% passed.

For more information on our bursary schemes, please see Developing our people: training and development, and transformation.

Educator support

Expenditure on educator support amounted to approximately R2.3 million in 2012. This year various workshops of early childhood development educators were held to build their capacity. We continue to pay the salaries of 11 of these educators. We supplied 12 Grade R centres with educational toys and equipment and trained 44 early childhood development educators on Grade R school readiness.

Educator workshops (24) have been extended to the primary and secondary schools that specifically focus on physical science. On-site workshops (20) and in-classroom support was provided to educators; a total of 48 classroom based contact sessions in Limpopo and a total of 154 classroom based contact sessions in Marikana were held. This followed our previous year’s investment in science laboratory upgrades and the equipment of these laboratories.

Parent support

Enabling more constructive communication between parents and educators, with the aim of making parents feel more included and therefore more active in their children’s education.

The SMS system that has been implemented between parents and educators to enhance communication opportunities is assisting three schools to maintain feedback between parents and the schools. We have further extended our support to parents by having a Parent’s Day as part of the Itutheng Saturday School Programme. The day was well attended and parents received communication regarding studying habits, learning difficulties and general concerns.

Community health

Our aim is to provide better access to comprehensive primary health care to as many people in the communities as possible. The priorities of community health programme were based on the findings of a comprehensive community health baseline assessment survey conducted in 2006 and reviewed in 2011.

These priorities are infrastructure development in the form of increased clinic facilities, the provision of equipment and facilities to health centres, nutritional support, HIV/AIDS treatment and patient care, and general health promotion.

 GLC health survey

CASE STUDY: GLC health survey

In 2006, we commissioned research on the health status of the GLC. The survey gave us an accurate understanding of the impact of Lonmin’s activities on the community, and formed the basis of our Community Health Programme. Five years later, we commissioned a review of the survey. Read case study

Health related infrastructure development

The Company’s goal in terms of health infrastructure development was to provide the residents of the GLC with access to comprehensive primary health care services, situated within 5km of their homes. This was achieved during 2012.

To date, Lonmin has completed two clinic extensions, built a new clinic, donated two mobile clinics, commenced with construction of three staff houses in collaboration with the Department of Health, developed a lodger/mother facility at Far East Rand Hospital and has also donated one obstetric ambulance to the surrounding communities, with a total of R11.2 million (US$1.3 million) having been spent. The Marikana, Modderspruit, Wonderkop and Segwaelane clinics have been refurbished to enable more community members to be served and they now have access to antenatal and paediatric services, and treatment for TB and HIV/AIDS. The construction of a further clinic in Hwelereng in Limpopo was completed in September 2012 at a cost of R10.25 million (US$1.2 milion). This is additional expenditure over the above mentioned spent.

HIV/AIDS care: Our network of peer educators and home-based carers

Our care-based efforts to manage the HIV/AIDS pandemic continued in 2012 through our network of peer educators and home-based carers, who work to reduce the spread of HIV/AIDS and to enhance treatment and awareness of the disease by visiting patients regularly and participating in awareness campaigns such as World Aids Day. They in turn get support from a strong network of community volunteers who receive training and can then pass on their knowledge as well. The Company’s partnership with the Department of Health, Rustenburg Hospice and Centre for Positive Care is a crucial part of the success of the programme.

To date, 49 community based peer educators and 92 home-based carers have been trained and are active in their communities in Marikana, Brakpan and Limpopo Province. In 2012, 1,318 patients received regular visits in their homes.

CASE STUDY: Building bridges of hope

The Workplace Peer Educators are workers from different levels within the organisation who volunteer or are selected by their peers. They are there to share knowledge and practical information, encourage and support others, and promote healthy living. Their services are not limited to the workplace, extending to their families and community. READ CASE STUDY

Nutrition and home-based care

There are currently around 1,300 OVCs in the GLC, who need special care and present unique challenges to the community. This year we have worked at equipping the peer educators and home-based carers with the necessary skills to deal with the issues surrounding orphaned children. The nutrition programme provided food to over 400 OVCs at five community-based food centres in Marikana and two in Limpopo. The programme is a natural progression of the School Nutrition Programme.

The cornerstone of both our community education and our health strategies, the GLC school nutrition programme has been in place since 2008, providing daily meals to school children and also to many children over weekends and during the school holidays. For many children, this is the only meal that they will eat in a day, and the nutrition programme has been accredited with increased attendance over the past year. To ensure sustainability of the project, Lonmin is working with the schools to develop food gardens that will supplement the nutrition programme for years to come. Training in permaculture food gardening was provided to 88 educators and 1,013 learners. Food gardens have been established at five food centres, 24 schools in Marikana and nine schools in Limpopo with some already harvesting vegetables.

Health promotion

Youth programmes in schools and youth clubs were given special attention in 2012, following the sharp increase in teen pregnancy, substance abuse and HIV/AIDS in the youth of the GLC, particularly in Grades 6 to 12. The long-term goal is to reduce school drop-out rates due to teen pregnancy. For grades 1-5, the programme focuses on abuse and children’s rights.

The health promotion campaign reached 28 schools and 33 youth gatherings to date. Child Protection Campaigns were conducted at seven Primary schools in the Marikana area. Safety Net training was conducted for the Marikana schools. It is aimed at equipping School Governing Body (SGB) members to be able to assist learners with challenges such as rape, abuse, HIV and teenage pregnancy where they would be hesitant to approach their parents or teachers. The school drop-out rate due to teenage pregnancy improved from 23.4% in 2011 to 17.2% in 2012.

Promoting healthly livin

CASE STUDY: Health promotion for the next generation

The long-term vision of our Community Health Programme is to increase general wellness in the GLC. The Health Promotion Programme was developed as part of this overall strategy, aimed specifically at the youth living in these communities. READ CASE STUDY

Local economic and enterprise development

Lonmin’s community LED programme is designed to work in partnership with local authorities and government to address the major service provision problems facing the GLC and help to boost the local economy. The projects we elected to invest in during 2012 focused on increasing the provision of basic water and sanitation services and encouraging local small and medium enterprises. Our choice of projects is always guided by consultations with the communities, ward councillors and local municipalities.

Part of our endeavour to ensure that local companies benefit from procurement programmes, we ring-fence as many opportunities as possible for local suppliers. Some examples of this include:

  • a 100% black, women-owned construction company, who were contracted to work on our hostel conversion programme;
  • our school infrastructure upgrade contracts were awarded to another GLC construction company; and
  • the catering contract for the Ithuteng Saturday School Programme was awarded to a GLC vendor.

We have also successfully established six joint ventures that enable us to transfer skills to emerging local suppliers, including small business training, access to finance and mentorship. Our Preferential Procurement Strategy is also aimed at BEE and local supplier development, in line with the goals of the amended Mining Charter.

During the year Lonmin has partnered with a financial institution to increase access to finance SMMEs within the GLC communities. A training session was held, training 25 GLC companies with the aim to educate SMMEs about the various ways to raise funding. Training material included techniques that could assist local suppliers in accessing funding from banks, as well as providing them with information to assist in improving business performance. We have also extended our training initiatives to train 20 GLC suppliers on health and safety as well as on tax compliance for small businesses.

Major LED projects

We match our investment in LED projects to the needs identified by the Integrated Development Plans (IDPs) of the municipalities in which the GLC communities and major labour sending areas are located, and the South African Government’s departments of Health and Basic Education. Baseline assessments are used to measure the impact and effectiveness of these projects throughout their life cycles. Expenditure on upgrades to LED projects amounted to R15.5 million in 2012.

This year a Brick Making Project saw 10 young people from the local community receiving training on making bricks. The training included hydrafrom and stock brick making, as well as suitable building knowledge. Initial on-job training has taken place with the road infrastructure project in the area of Bapong. Lonmin has procured the machinery for the brick making to commence. The initiative will support the development of basic services as well as on road construction.

Other major projects that received investment for 2012

Project Description Benefits to the GLC
GLC Waste Management Provision of refuse and waste management service in the communities around our operations Service 2,600+ household by removing refuse and cleaning the environment. Create a minimum of 45 medium term jobs, target the unemployed youth. Create an opportunity for at least four local waste management entrepreneurs.
Water reticulation programme Providing access to basic service infrastructure, specifically water and sanitation. Providing 400 households with yard connections and 200 households with sanitation systems in the Madibeng Local Municipality in the North West. In the Eastern Cape, water reticulation has been provided to 405 households and sewer systems to 320 households.
Rain water harvesting programme Provision of rainwater harvesting facilities to selected households for use as irrigation water supply. Provided 156 households with rainwater harvesting systems for sustained water supply in the OR Tambo district municipality. The use of this water for irrigation saves potable water for human consumption.
36 temporary jobs were created
Modderspruit water project The construction of water reticulation for 700 houses in Modderspruit village. 54 medium-term jobs to skilled and semi-skilled community members.
Brick-making factory Setting up a brick-making factory in Bapong. A group of 10 young people from the GLC were sent on a brick-making course to be employed at the factory.
Keeping the GLC clean

CASE STUDY: Keeping the GLC clean

Recognising the growing problem of waste in the GLC – an issue raised at various stakeholder meetings Lonmin has partnered with the innovative waste management company, TedCor, to offer a reliable waste removal service to the residents of the GLC. Read case study