Lonmin is committed to going beyond compliance in its vision for sustainable communities post the life of mine, despite the tough economic conditions that continue to plague our industry. This was another challenging year for the Company and we continue to review Lonmin’s operation with the aim of preserving value for shareholders and safeguarding the long-term interests of employees and all key stakeholders. Our commitment to meeting our sustainability targets remains steadfast, notwithstanding the slower-than-anticipated progress.
A key objective of the Company is keeping Lonmin employees safe, and we remain committed to Zero Harm. With immense regret we report the loss of five colleagues during this reporting period, and we send our sincere condolences to the family and friends of Messrs Joao Fernando Macamo, Giji Mxesibe, Letlhogonolo Ciciron Rakotsoane, Simon Joseph Sibitane and Mangi Bunga. We are determined to improve on this performance.
We are particularly proud of the progress we made with our employee housing programme. We officially launched our infill apartment project on 15 August 2017, celebrating the completion of the single-sex hostel conversion and building of the first two phases of the modern infill apartments. Completion is planned for December 2018. The Human Settlements Strategy and Implementation Plan was approved by the Board following extensive engagement with all affected parties to ensure that their needs and inputs were considered every step of the way. Phases 1 and 2 are complete, phase 3 will yield another 300 units, and ground works are underway for phase 4. We are looking at a revised strategy for employees who prefer home ownership, which depends heavily on partnership arrangements with government and the availability of funding.
The estimated cost of development is R410 million, which is part of the R500 million SLP commitment to be allocated by December 2018. Construction contracts were awarded to two local companies with 100% black ownership, and we estimate that circa 1,150 local jobs were created through this project.
We continue to invest in the upliftment of communities surrounding our operations, with particular focus on community health, education, skills development and social infrastructure.
In South Africa, there is growing frustration and community activism in many of our neighbouring communities, particularly among the unemployed youth. We were impacted by the slow pace of service delivery, reduced employment opportunities, and a rising cost of living, we faced a crisis of expectations during the period under review in terms of providing jobs, infrastructure, service delivery and procurement opportunities. Community protests affected our operations this year, particularly on the eastern side of the property. We are committed to playing our part in addressing unemployment. Successfully addressing what is essentially a national problem will require a collaborative multi-stakeholder effort. Lonmin and the leadership of the DMR, the Madibeng municipality and the North West Premier’s office, created formal structures to engage with various stakeholders to attend to the issues raised. The engagement process is ongoing.
Employee indebtedness at our South African operations is an ongoing concern. It affects employee wellbeing and raises stress-related health and safety risks. We continued to implement initiatives aimed at helping employees reduce their debt and better manage their financial affairs.
Lonmin embraces transformation as a business imperative and continues to make progress in this regard. We are committed to playing our part in addressing historic inequalities and creating an environment in which current and future generations can succeed in creating a shared purpose. The Mining Charter requires us to focus on increasing the number of Historically Disadvantaged South Africans in management and the number of women in mining.
Our health and wellbeing programmes continue to show good results, with an increased number of employees receiving anti-retroviral treatment, and a reduction in Aids-related deaths. Lonmin remains focused on improving controls to prevent noise-induced hearing loss, a continuing area of concern for the Company.
The Company continues to improve its environmental performance, and remains committed to meeting changing environmental requirements and regulations. Plans are in place to improve the efficient use of water, and Lonmin monitors developments regarding carbon tax legislation to ensure continued compliance.
In closing, we express our thanks to management, our colleagues on the Social, Ethics and Transformation and Safety, Health and Environment committees, and all employees for their work towards delivering on Lonmin’s sustainability commitments. Social and economic sustainability provide the Company with its licence to operate. Working together with all stakeholders, particularly community leaders and government, in the spirit of true collaboration will help us build a positive legacy for our children and their children.
We encourage all stakeholders to read this report and to give honest feedback on our performance and our disclosure. Greater stakeholder accountability and engagement are critical in helping Lonmin deliver effectively on its sustainability goals.
Chairman of the SET Committee
Chairman of the SHE Committee