Community engagement and development

Community engagement and development

ENERGY

Overview

For a number of reasons, energy is becoming an increasingly important business driver. Firstly, energy efficiency is needed to make the best possible use of dwindling fossil energy resources. Secondly, security of supply is critical for continued production. Thirdly, there is increased awareness worldwide and in South Africa regarding the responsible management of mining's carbon footprint in response to global climate change concerns.

Compared with 2008, 2009 was a relatively good year with respect to the availability of electricity, and no blackouts or significant power interruptions occurred during the year. This was mostly the result of Eskom's recovery from its coal-supply problems, and of lower demand as a result of the economic downturn. However, with the more positive economic outlook for 2010 the demand for electricity is expected to increase, and this may result in interruptions in power supply.

Continued focus is being placed on energy-efficiency projects owing to the interruptions experienced in early 2008 and the global emphasis on being more energy-efficient. View details of these projects

Overall energy-efficiency performance 

In the past, the overall energy-efficiency performance of the Company was calculated by dividing the total energy consumption of the managed operations by the total refined ounces of precious metals produced through the precious metal refinery. In 2009 this intensity decreased when compared with that for 2008, by 9% to 5.39 GJ/oz. This calculation, however, is strongly influenced by the fact that an increasing portion of total precious metal production is derived from concentrate from non-managed operations, meaning that the significant energy consumption associated with mining and with concentrating the concentrate is not included in the calculation.

A more realistic calculation for overall energy efficiency is to calculate the efficiency of the managed mining and concentrating operations separately, by dividing the energy consumption at these operations by the precious metal ounces produced by them alone. Energy intensity is then calculated separately for smelting and refining, as their energy consumption divided by the total production of precious metal. Added together, the two energy intensities give us a single intensity that is a fair measure of the Company’s overall energy-intensity performance.

It is clear from these results that the energy efficiency of the Company was deteriorating until 2008, mostly as the result of the secondary drivers associated with the mining operations and the downward-trending ore grade. Despite these issues, the Group managed to improve its overall energy intensity by 14% to 5.64 GJ/oz between 2008 and 2009, thanks mainly to its energy-saving initiatives.

Energy footprint

The diagram illustrates the total energy footprint for our managed operations in 2009. In absolute terms, our total energy consumption decreased by 7% to 23.7 PJ in 2009 (25.4 PJ in 2008). The concentrators, smelters and refineries reported an increase in energy use of 5% compared with the previous year, while mining energy use decreased by 21%. This ensued from reduced production at Mogalakwena Mine and the fact that Bokoni Platinum Mine Joint Venture figures are reported until June 2009 only.

Mining operations remain the largest user of energy, followed by smelting and concentrating. At only 11% of the total, the refineries use the least energy. Key energy users at mining operations are compressors, winders, pumps, and ventilation and cooling systems. At the concentrators, the key energy users are crushing, milling, flotation and tailings operations.

The total direct energy consumption for our managed operations decreased by 17%, from 6.2 PJ in 2008 to 5.15 PJ in 2009. This was the consequence of reduced production at Mogalakwena Mine, of only six months of data being reported for Bokoni Platinum Mine Joint Venture, and of two shafts at Rustenburg being closed during 2009. Direct consumption by primary energy sources includes coal, petrol, diesel, paraffin, light fuel oil and liquefied petroleum gas. These direct energy sources account for 22% of the total energy use of the Company.

The total indirect energy consumption for our managed operations decreased by 3%, from 19.2 PJ in 2008 to 18.55 PJ in 2009. The main reasons for this were the same as those for the reduction in our direct energy consumption (see above). Our sole source of indirect energy consumption by primary source comes from the electricity supplied by Eskom, and represented 78% of the total energy consumed by the Company.

While Eskom's power conservation programme (PCP) did not progress during 2009, it is expected to do so during 2010 as spare generation capacity diminishes owing to growth in electricity demand. We have developed a management process to ensure that our PCP targets are met. 

Usage of renewable energy

Significant progress was made in the use of renewable energy sources during 2009. Further to the installation of solar water heaters during 2008 at the Mototolo Concentrator and the Brakfontein shaft at the Bokoni Platinum Mine Joint Venture change-houses, heat pumps were installed at the change-houses at both shafts at the Bafokeng-Rasimone Platinum Mine (BRPM) during 2009. Heat pumps had recently been classified as a renewable energy source, because they use ambient heat as their energy source. The success of the BRPM installation led to a decision to instal heat pumps at the mines based in Rustenburg, Tumela and Dishaba, with an Eskom demand-side management project registered for the purpose. While Eskom has also announced a subsidy scheme for domestic retrofits of solar water heaters, the heat pump installations are currently cheaper and are therefore the preferred option at present. A study is also being done at Union Mine to instal heat pumps at both change-houses and the mine houses in the village. These installations will be completed in 2010.

A total of 137 solar water-heaters from selected domestic suppliers were tested at the Amandelbult village to assess their acceptance by the home occupants. A feasibility study on the use of concentrated solar power was completed by Anglo American plc, and led to a decision to proceed with further pilot study work at other operations. The possible inclusion of a solar-powered refrigeration plant will be investigated at the Amandelbult 4 shaft project when this is reinstated in future.

ENERGY FOOTPRINT

Click here to enlarge

CLIMATE CHANGE

Overview

We are part of a global group and our climate change plans and programmes are guided largely by Anglo American plc's climate change policy. We are a signatory to the Energy Efficiency Accord of the Department of Mineral Resources (DMR) and we have committed ourselves to a 10% reduction in CO2 emissions and a 15% reduction in energy consumption by 2014, with 2004 as our baseline year. More than 90% of our greenhouse gas emissions are indirect emissions attributed to electricity consumption. Therefore the key factor in our strategy to reduce greenhouse gas emissions is our energy-efficiency drive. As we become more energy-efficient, we shall emit less greenhouse gases per ounce produced.

We do not have any current clean development mechanism (CDM) projects in terms of the Kyoto Protocol, and neither are we involved in the carbon trading market. We are, however, evaluating a number of energy-efficiency projects for CDM opportunities, for example electric drilling, solar water-heating at housing developments and various compressor-efficiency projects as described in the energy-efficiency case study.

The potential impact of climate change on some of our operations is being researched by the Imperial College in London. The following outcomes are expected from the research:

  • A forecast of likely climate change impacts on Twickenham Mine and other Lebalelo Water Scheme participants up to 2050.
  • An assessment of the possible impacts of reduced rainfall on water availability at Twickenham Mine; and of the significance of these impacts both for the mine and for the well-being of communities living nearby.
  • A description of possible adaptive measures to counter the reduced availability of water.

In addition, we have jointly signed a cooperation agreement with Johnson Matthey and Anglo Coal to investigate the use of platinum group metals (PGMs) in clean coal technology to reduce CO2 emissions. 

Carbon disclosure project

Global understanding of climate change and its associated risks and opportunities continues to grow, with the result that investors are increasingly seeking more advanced corporate disclosure on carbon performance.

As a listed company on the JSE Limited, we again participated in the annual carbon disclosure project (CDP) during 2009. This project seeks to improve corporate disclosure of business risks and opportunities presented by climate change, thereby ensuring a timely and efficient response to such risks and opportunities.

Based on the 2009 CDP results, we were ranked in twelfth place among the top 16 companies on the JSE 100; and ninth out of 75 'materials/mining' companies globally.

EMISSIONS

Greenhouse gas emissions

We quantified our greenhouse gas (GHG) emissions in 2009 in accordance with ISO 14064-1 to determine our carbon footprint. According to this ISO standard, a baseline year restatement is required if ownership and control of GHG sources were transferred into, or out of, organisational boundaries during the year. GHG emissions were calculated for all managed operations, but included only the first six months of data for Bokoni Platinum Mine Joint Venture, which was converted to a joint venture as from July 2009.

In accordance with international protocols, all greenhouse gas emissions are reported as tonnes CO2 equivalent. The carbon footprint by source is indicated in the energy footprint diagram.

The following emissions were considered: 

  • Direct greenhouse gas emissions, such as emissions from the combustion of diesel, petrol, coal, liquid petroleum gas (LPG), paraffin and light fuel oils.
  • Indirect greenhouse gas emissions, such as emissions associated with the production and distribution of electricity from Eskom.

Indirect emissions

Indirect CO2 emissions resulting from imported electricity from the national grid increased by a marginal 1% to 5.2 Mt in 2009. Absolute electricity use was reduced by 3%, which explains the small increase in indirect CO2 emissions in 2009.

Indirect CO2 emissions from imported electricity per refined ounce of precious metal from managed operations decreased by 0.8% to 1,172 kg in 2009.

Direct emissions

CO2 emissions generated internally from processes and fossil fuel use decreased by 13%, from 494 kt in 2008 to 427 kt in 2009. Coal usage increased by 12%, while fuel usage decreased by 48% in 2009 owing to lower production mainly at Mogalakwena Mine, where diesel usage is a large contributor to direct GHG emissions.

Direct CO2 emissions generated internally per refined ounce of precious metal from managed operations decreased by 15% to 97 kg in 2009.

SURFACE LEASES

While Anglo American Platinum Limited (Amplats) has the mining rights to mine the minerals below the surface, in many areas it does not own the surface and enters into lease agreements with the landowners. In many areas where the Company operates, the land is communal and the legal right to the land is held in trust and administered by the Minister of Land Affairs on behalf of the community. The current status of the leases with communities is shown in the table in community engagement.

Discussions to finalise the surface leases are ongoing.

KEY ISSUES ARISING WITH COMMUNITIES IN 2009 

This section summarises the key issues that arose in respect of our host communities in 2009, and provides information on how the issue is being managed. Many of these issues received media attention. 

Mogalakwena - Motlhotlo resettlement 

A full background to the Motlhotlo resettlement is provided in the document entitled 'Mogalakwena Mine Resettlement Update - A general update on community issues', which is available at http://www.angloplatinum.com/pdf/ mogalakwena_resettlement_update_ november_2009.pdf.

The Motlhotlo resettlement process remained a key issue in 2009. Only nine families moved in 2009, bringing the total number of relocated families to 892 out of a total of 956. The remaining 64 families are all members of the Motlhotlo Relocation Resistance Committee formed in January 2008 and have refused to relocate in line with the 'one-on-one' agreements they originally signed.

Their chief grievances and demands are as follows:

  • The agreements under which the resettlement has been undertaken should be renegotiated to include:
    • an equity stake in the mine;
    • greater compensation for reviewed loss of land; and 
    • preferential employment at the mine. 
  • Current engagement structures should be disbanded to allow the committee to be formally recognised and new structures to be elected. 
  • An independent audit needs to be carried out on the socio-economic impact of mining activities. 
  • An audit needs to be done of section 21 companies and traditional authorities. 
  • Amplats must provide detailed disclosure of its social and labour plans.
  • There must be additional compensation for the loss of ploughing fields.
  • Fodder and adequate water must be supplied by the Company.
  • Transportation to the new schools of children remaining in the old village must be guaranteed.
  • Amplats must apologise for the harm caused by the resettlement and the mine.

The Department of Mineral Resources has set up a task team to address these grievances and Amplats will work with this task team to resolve these issues.

In addition to this, an independent post-relocation review was conducted by the international mining consulting company, Environmental Resources Management (ERM), in the first half of 2009. The findings and recommendations of the review have been shared with stakeholders and are included in community engagement.

Mogalakwena - Blinkwater farm Lease 

In November 2009 Jubilee South Africa accused Amplats of "bulldozing Sekuruwe community's mealie fields". Amplats is of the view that Jubilee misrepresented the situation.

The facts are that Amplats has a registered lease over the land in question. It has paid the community double the value of the land and has further compensated individual community members for loss of livelihood for a 10-year period.

Amplats started negotiating with the community of Sekuruwe in early 2006, for the use of a portion of the farm Blinkwater to establish a tailings dam. The Company was interested in leasing only about 350 to 400 hectares of a 790-hectare farm portion, but the community did not want to split the land and requested that Amplats lease the entire 790 hectares. The land was then valued at R1.7 million by the community's own independent assessor. Following this, Amplats found alternative land to give to the community. Although this was valued at more than double the value of Blinkwater (ie R3.5 million), it was the only land available for purchase. The community rejected the land in favour of cash, and in March 2008 the Company paid R3.5 million in compensation for the leased area into a trust account earning interest for the community. Annual rental of R194,000 had also been agreed on, with five years' rental paid upfront as per the community's request.

In addition to paying the community for the land, the Company paid compensation to those community members who had land use rights and access to the land. These families were paid a total of R4.6 million for loss of livelihood for a 10-year period.

Amplats also agreed to do the following: 

  • Assist the community with the additional pumping and storage of water (this project has been completed).
  • In partnership with the Department of Health and Welfare, establish a clinic in the community. (Financial payments will be made instead, as the department feels that local population numbers do not warrant setting up and maintaining a new clinic, especially since one is already available within a reasonable travelling distance.)
  • Source at least 30% of the labour to be utilised on the new tailings dam and the expansion project from the local communities.

Amplats thus has a valid lease for the Blinkwater farm. The area was prepared for operations, and drilling commenced on 17 November 2009 and was completed on 23 November. As far as the Company is aware, no ploughing took place during this period. Work on the area recommenced during the week of 1 December, after it was disrupted by some community members.

Amplats has had numerous engagements with the community, during which it has explained the processes that led to the lease agreements. It has also informed the community of the compensation paid and has circulated copies of the lease agreements for review. Engagement with the community will continue.

Mogalakwena - Ga-Molekana water contamination 

In March 2008 Amplats was accused by ActionAid of contaminating the drinking water of two schools in Ga-Molekana with nitrates. As soon as Amplats was made aware of the allegation of raised nitrate levels in the water, it helped to supply potable water to the schools. It also commissioned a scientific study to determine the cause of the elevated nitrate levels.

The study, conducted by the University of the Free State's Institute for Groundwater Studies (IGS), made use of the most sophisticated methods available, including isotope analysis. This showed that mining was not the source of the nitrate contamination. Additional research and isotope testing were conducted in 2009 by the Company. These confirmed that the mine's water is not contaminating the Ga-Molekana community's water. 

Mogalakwena - Sekuruwe grave relocation 

The background to the issue of the Sekuruwe grave relocation was provided in our Sustainable Development Report for 2008, which is available on www.angloplatinum.com. In summary, a dispute arose at the farm Blinkwater, where graves belonging to the Sekuruwe community were being relocated from the site onto which the tailings dam for the Mogalakwena North project is to be extended. It is alleged that the funeral services company that was subcontracted to remove the remains from the graves used mechanical means and excavated too deep, as a result digging up human remains from graves that were more than 600 years old.

The Company commissioned an extensive review of the Sekuruwe grave relocation process, which included the full involvement of the South African Heritage Resources Agency (SAHRA). Following Amplats's appointment onto the project of SAHRA's recommended forensic anthropologist, Professor Marina Steyn of the University of Pretoria, SAHRA immediately issued (on 26 May 2009) the necessary permits for remedial work to go ahead on the 20 Sekuruwe-Blinkwater-SAHRA graves involved. Work on the site commenced on 28 May 2009. During June Amplats, in conjunction with the stakeholders involved, put together a draft plan for remedial work on all 149 Blinkwater graves to ensure a comprehensive remedial process was followed. In July approval was obtained from the Premier's Office and the municipality for the rollout of the work, which then began on 13 July. Remedial work on all the graves is largely complete and a reburial and cleansing ceremony will be held at the new burial site in 2010. 

Issue Owner of surface Status
Rustenburg - RE and Ptn 1 of Boschkoppie 104JQ  Royal Bafokeng Nation (RBN) land. R75/ha/annum  Approved by RBN – Awaiting ministerial approval
Rustenburg - Ptn 2 of Klipfontein 300JQ  Mokhatle tribe – Part of RBN Approved by RBN – Awaiting ministerial approval
Rustenburg - Portions 5, 6, 7 & 8 of Hoedspruit 298JQ  RBN Approved by RBN – Awaiting ministerial approval
Rustenburg - Portion of Turffontein 302JQ  Mokhatle tribe – Part of RBN Approved by RBN – Awaiting ministerial approval
Rustenburg - Portion of Klipgat 281JQ  Mokhatle tribe – Part of RBN Approved by RBN – Awaiting ministerial approval
Rustenburg - Portion of Boschfontein 268JQ  RBN Approved by RBN – Awaiting ministerial approval
Union - Portions of Turfbult 404KQ  State on behalf of Bakgatla The Bojanala District Land Reform Office has traced the original resolution taken by the Bakgatla (it was misplaced for a period). The lease has not been screened by the DLA legal office and has not been signed by the Minister. A full submission will be made to the Minister 
Union - Portion 2 of Spitskop 410 KQ  State on behalf of Bakgatla Same as above
Union - Portions of Haakdoorn 6JQ  State on behalf of Bakgatla Same as above
BRPM - Portion 1 of Boschkoppie 104JQ  State on behalf of RBN Ministerial signature required. Short-term lease in place. R75/ha/annum 
Mogalakwena - Portion of Zwartfontein 818LR  State on behalf of Langa tribe Original lease signed with the former Lebowa government. New lease negotiated with Kgosigadi, awaiting approval from Department of Land Affairs' Polokwane regional office. Submitted to Minister on 5 May 2009 
Mogalakwena - Portion of Overysel 815LR  State on behalf of Langa tribe Original lease signed with the former Lebowa government. New lease negotiated with Kgosigadi. Ministerial approval awaited. Submitted on 5 May 2009 
Mogalakwena - Portion of Vaalkop 819LR  State on behalf of Mapela tribe Original lease signed with the former Lebowa government. The mine has encroached onto the land and Richard Spoor has in the past attempted to have the leases set aside 
Twickenham - Portion of Twickenham 114KT  State Department of Land Affairs (DLA) has requested that land ownership be clarified via a 'land audit' 
Twickenham - Portion of Hackney 116KT  State DLA has requested land ownership be clarified via a “land audit”
Twickenham - Portion of Forest Hill 117KT  State Lease agreements have been approved by the Limpopo State Land Disposal Committee and have been forwarded to the DLA in Pretoria for signature - DLA to ask Minister to sign 
Twickenham - Portion of Waterkop 113KT  Bapedi DLA to clarify ownership by means of a land audit. Lease agreements have been approved by the Limpopo State Land Disposal Committee and have been forwarded to the DLA in Pretoria for signature 
Twickenham - Portions 2, 3 & 5 of Mecklenburg 112KT  Bapedi, State and Tubatse Municipality  DLA to clarify ownership by means of a land audit. Lease agreements have been approved by the Limpopo State Land Disposal Committee and have been forwarded to the DLA in Pretoria for signature 
Palmietfontein 24KS  Reboile Trust Long-term lease concluded and notarially executed in respect of the Polokwane Smelter site 
Driekop 253KT State on behalf of Mohlala Tribal Authority  Awaiting tribal resolution to finalise lease agreement in respect of the exploration camp 
Schildpadnest 385KQ Baphalani community Long-term lease concluded and notarially executed in respect of the surface area required for mining infrastructure 

Mogalakwena legal actions

Richard Spoor, a human rights lawyer based in South Africa, has over several years attempted to stop the lawful operation and development of Mogalakwena Mine on behalf of his clients. These attempts have been based on various grounds, but none has been successful.

There were no new actions in 2009. A breakdown of previous cases can be found in our 2008 Sustainable Development Report.

In 2006 an interdict application and action for damages was instituted by, among others, Amplats against Mr Richard Spoor. It was instituted premised on defamatory words and/or statements published and/or caused to be published by Mr Spoor against Amplats and others. It has been consolidated for hearing and has been set down for trial during the period 1 to 19 February 2010. 

Twickenham — Magobading

Three main issues have arisen at Twickenham in respect of host communities. They relate to the payment for surface leases; repair work to 14 poorly constructed houses at Mogobading; and the recruitment of local community members to work at the mine. In addition, at the Mogobading relocated village the stormwater control has been found to be inadequate and the Enviro Loo system has collapsed as a result of poor maintenance. A community committee has been established to represent the interests of the community and agree onimproved at the Company's cost during 2009. the solutions. The 14 houses were rebuilt and the stormwater control improved at the Company’s cost during 2009.

Leases — Twickenham

Nine tribal authorities and community groups in the Twickenham mining area received donations in excess of R9 million in 2008. This was the first of two donations to be deposited in trusts that have been established for community upliftment projects.

At the request of the communities, the R20 million Amplats donation will be equally split between a trust for the area and nine community trusts - for the Magadimane Ntweng, Mashishi, Phasha Makgalanotho, Nareng Thokwane, Mampa, Mashabela, Phashaskraal, Swazi Mnyamane and Makgopa communities.

The R20 million was agreed on between the communities, Amplats and the departments of Land Affairs and Minerals and Energy in 2000, and half of the donations plus interest was released in 2008. As part of the initial agreement, Amplats pays rent for the land and made a once-off payment to compensate the communities for loss of agricultural income.

In 2009 the Minister approved three of the leases (over portions of the farm Forest Hill 117KT, Hackney 116KT and Twickenham 114KT). These leases are now in the process of being notarially executed and registered. The other three leases, over portions of Surbiton 115KT, Mecklenburg 112KT and Waterkop 113KT, are subject to a departmental land rights enquiry which has been completed and has recommended that the Minister approve and sign the leases. The Minister's decision on these three applications is awaited. 

COMMUNITY DEVELOPMENT PROJECTS

The Company co-funded and assisted with a number of community development projects in 2009. Details of our community development projects are included in the community development. A separate brochure providing details of Amplats's community development projects is available on the Company's internet site, at www.angloplatinum.com. Altogether 8% of pretax profit was spent on community development. 

Overview of the Mogalakwena Mine Motlhotlo community resettlement 

In order for Mogalakwena Mine to secure land for mining infrastructure and to prevent safety and environmental impacts from affecting the community, Amplats was required to relocate the Ga-Sekhaolela and Ga-Puka communities (collectively known as Motlhotlo). The list below provides a summary overview of what the Motlhotlo resettlement project has entailed and what Amplats has provided for: 

  • Extensive consultation with the affected communities over a prolonged period.
  • The resettlement initiated with 100% homeowner sign-off in the form of one-on-one agreements.
  • The development of bulk and reticulated infrastructure in the new village in line with the Department of Water Affairs and Forestry's 'Water supply design guidelines', Eskom's electrification standards and specifications, and the requirements of the municipal engineers. Infrastructure included bulk/raw water, water supply reticulation, sanitation and solid waste removal, roads and stormwater drains, the structural design of house foundations, electrical distribution and reticulation, and electrical services for buildings.
  • The replacement principle was based on a 'like-for-like' basis. As a minimum, however, in most instances the replacement or compensation was a substantial improvement.
  • Two asset audits were done in the old villages to determine accurately what assets the individual households had, one in May 2002 and the other in September 2002 (for a final verification). 
  • The development of 956 new houses to a minimum standard specified in the Department of Housing's 'Guidelines for Human Settlement, Planning and Design'. 
  • The development of other structures such as shops, schools and a clinic. 
  • Compensation for loss of surface access to farmers.
  • The relocation of some 2,300 graves.
  • Financial compensation for immovable assets, eg fruit trees.
  • The payment of a R20,000 settling-in allowance per household following relocation.
  • A 'land-for-land' exchange and the donation of additional farms.
  • The development of 700 hectares of maize fields for use by the community.
  • A brick-making plant donated to the community
  • It is agreed that the communities will be paid an amount of R5 million each upon Amplats being given a vacant occupation of the land. Thereafter R2 million will be paid per annum for five years. These trust accounts will be set up upon vacant occupation.
  • 30% of the new workforce would come from the affected communities. 
  • Throughout the project Amplats paid for expenses incurred by the community as a result of the resettlement, including the community's legal adviser's fees, and stipends to the trustees of the section 21 companies, the operational teams and the community liaison officers.
  • The amount budgeted for the project was R675 million in nominal terms, while the amount spent to date is closer to R770 million. 
  • All construction on the new villages was completed in March 2009.

In late 2008 Amplats appointed ERM to conduct a review of the resettlement processes undertaken at Ga-Pila and Motlhotlo near the Mogalakwena Mine, formerly known as the Potgietersrust Platinum Mine. ERM used the International Finance Corporation's Performance Standard 5: Land Acquisition and Involuntary Resettlement as the benchmark for this review.

The key objectives of the assessment were to review Amplats's performance in the resettlement activities carried out to date against current best practice in order to identify key strengths and weaknesses (and associated lessons learnt), but also to lay the foundations for sustainable and informed actions moving forward by developing a set of practical recommendations to Amplats based on the review findings.

The findings of the review were based on extensive stakeholder testimony relating to their experience of the resettlement process. This involved interviewing a broad sample of interested and affected stakeholders over a six-month period (December to May). The resulting report, which is being finalised, is due to be publicly released in the first quarter of 2010.