Sustainable development 2014
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AT A GLANCE OUR APPROACH TO CREATING VALUE OUR GOVERNANCE AND MANAGEMENT APPROACH
SAFE AND EFFECTIVE PEOPLE WHO RESPECT AND CARE SOCIAL CAPITAL AND LICENCE TO OPERATE CONSERVING NATURAL RESOURCES AND MITIGATING IMPACTS
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our approach to creating value
Identifying our material sustainability focus areas

Our material sustainability focus areas

Informed by the Group risk process, and the material interests and concerns of our key stakeholders, we have identified the following four material sustainability focus areas, and the associated issues, three of which are detailed in this report.

These material focus areas underpin our Group strategy, and are reflected in our four strategic objectives discussed in our integrated report here

  Group strategic risk     Context     Our response measure     Strategic objective     Reference   
  Non-delivery of production and productivity targets at Impala Rustenburg     Short-term challenges include: safe resumption of the Impala Rustenburg operation post-strike; ramping up to full production as per the start-up plan, maintaining our ability to achieve completion of the mining cycle; speeding up the establishment of face length in new mining areas; ensuring increased productivity.     Ensuring the safe return to work for all employees by implementing the detailed start-up plan for the operations. Implement initiatives relating to: mining quality; training; visible felt leadership; mine planning protocols and work procedures.     Excellence: Deliver operational excellence     Refer to following link
  Wage negotiations and employee relations climate     On 23 January 2014, around 80 000 members of the Association of Mineworkers and Construction Union (AMCU) commenced strike action at the Rustenburg mines of Impala, Lonmin and Anglo American Platinum (Amplats). The strike lasted until the end of June 2014, resulting in estimated production losses for Impala of 312 000ozs Pt.      Striving to provide an enabling work environment that fosters open, honest and effective relations between management, employees and elected union representatives. Engaging with various government departments directly, working with the Chamber of Mines and labour representatives to find sustainable solutions to industrial relations challenges in the country.     Behaviour: Safe and effective people Together: Social capital investment     Refer to following link  
  Platinum group metal (PGM) price fluctuations     Despite the protracted strike, the platinum price did not move significantly over this period, which is an indication of significant above-ground metal stocks.     Understanding the future demand for our products, and the corresponding industry supply-side profile. Scanning the environment for technological advances that may affect the demand for Implats' products (substitution), and instituting appropriate responses where possible.     Excellence: Deliver operational excellence     Refer to following link  
  Volatility of the rand/US$ exchange rate     The volatility of the rand/US$ exchange rate primarily impacts revenues for the basket of PGMs and base metals produced. Fluctuations in the exchange rate have a marked influence on cash flows.     Closely monitoring the rand/dollar exchange rate as a source of significant volatility for our business and where prudent try to mitigate its impact.     Excellence: Deliver operational excellence     Refer to following link  
  Shear-induced ground instability at Zimplats (Mutambara Shear)    The behaviour of the Mutambara Shear has been erratic and unpredictable. As a result, prediction of the operability and hence production levels in the short to medium term may not be accurate.      Close monitoring and review of the affected areas by industry experts and using the best available technology. Ensuring that the worst affected areas are quarantined. Establishment of a detailed action plan is in progress.     Excellence: Deliver operational excellence Behaviour: safe and effective people     Refer to following linkand following link 
  Pressure to provide metal at low prices for local beneficiation – South Africa     The issue of further minerals beneficiation has been on the agenda of the South African Government since 1995, in the belief that beneficiation will help re-industrialise the economy and create hundreds of thousands more jobs in manufacturing. The DMR is pursuing the specific agenda of developmental pricing and forced local sales.      Maintaining regular high-level contact with the DMR as part of the platinum industry group. Engaging in national technological research for further opportunities.     Sustainability: Conserving natural resources     Refer to following link  
  Uncertainty regarding indigenisation policy in Zimbabwe     The Zimbabwean Government has advised that the Zimplats indigenisation plan signed in January 2013 needs to be revised.      Maintaining regular contact with government officials. Ensuring full legal and regulatory compliance in a continuously changing environment. Investing in community and social development initiatives.     Together: Social capital investment     Refer to following linkand following link 
 
  Weak balance sheet and cash flows      The financial impact of the protracted strike has been far reaching. Implats is currently operating in a cash constrained mode.     Proactive and rigorous review of the short and long-term business planning process and parameters, together with ensuring that appropriate funding is available or in place.     Sustainability     Refer to following link  
  Excessive taxation at Zimplats      There are multiple and sometimes conflicting interpretations of the unique special mining lease tax law that is applicable to Zimplats.      Maintaining regular contact with government officials. Conducting training and awareness campaigns to internal stakeholders, as well as tax compliance audits.     Together: licence to operate     Refer to following link  
  The security of supply of electricity in South Africa     In South Africa, the electricity supply industry is dominated by Eskom, which owns and operates the transmission grid. Eskom has a net installed generation capacity of 42 000 MW. Given planned and unplanned outages it is able to bring a maximum of 36 000 MW on line at present.     Maintaining regular contact with Eskom to ensure we are aware of any situation that may affect us. Ensuring we minimise our consumption of energy and water by promoting efficient processes, and adopting appropriate technologies.     Sustainability: Conserve natural resources     Refer to following link  
RESPONDING TO OUR STAKEHOLDERS' MATERIAL CONCERNS

Implats has a range of stakeholders, with varying degrees of influence on the Company and on our ability to create value. While we recognise that all stakeholders are important, we have prioritised strategic relationships with employees and unions, government, shareholders, BEE partners, customers and communities, each of whom is critical to the longer-term sustainability of our business. As part of our strategic initiatives, a review process is currently under way to map stakeholder groupings and assess the effectiveness of engagement mechanisms and take corrective measures where necessary.

  Stakeholders     Nature of engagement     Material issues raised      Our response     Reference
  Employees     Internal communication Engagement with trade unions Workplace forums     Conditions of employment Safety and health initiatives Progress with transformation Production and performance     Collaborative engagements to find solutions to issues of concern Undertaking a culture survey Reviewing internal incentive systems     Refer to following link  
  Trade unions     Internal communication Collective bargaining units Branch committees Chamber of Mines     Living wage Conditions of employment Discrimination Union recognition Safety Transformation      Strong focus throughout the year on engaging with union representatives, and establishing a new labour relations environment that fosters open, honest and effective communication     Refer to following link   
  Shareholders, analysts and investors      Roadshows Results presentations Investor conferences One-on-one appointments     Industrial relations climate Wage negotiations The situation in Zimbabwe Future metal prices, and PGM supply and demand dynamics Cost control measures Capex programme Progress at Impala Platinum     Investor concerns and queries are addressed in our regular investor engagements      
  Government     Meetings with officials from local, provincial and national government Compliance visits from government Chamber of Mines Parliament Portfolio Committee Mining Industry Growth, Development and Employment Task Team (MIGDETT)    Labour relations Safety (accidents and stoppages) Progress with transformation (SA) and indigenisation (Zimbabwe) Progress with social and labour plans (SA) Community investments and engagement Environmental compliance The establishment of a Base Metal Refinery (Zimbabwe)    Implats engages constructively with government at all levels, both as a company and through industry representative bodies (such as the Chamber of Mines) on these material issues In the current year, engagement in South Africa included a particular focus on finding solutions to the industrial dispute Local government was engaged in conducting a social impact assessment in partnership with them in our mine communities     Refer to following link  
  Traditional council, local land owners and local communities     Community engagement meetings Community trust meetings Future forum meetings One-on-one meetings     Employment and procurement opportunities Enterprise development Infrastructure development Health and social facilities Environmental impacts and property damage Business opportunities Educational planning Unemployment     The responsible executive at each operation addresses issues of concern to the community. Information on our performance on material issues is provided at our community “future forums”, particularly on employment, procurement, infrastructure development, environmental issues and health     Refer to following link  
  Suppliers     Supplier forums One-on-one meetings     Conditions of contracts Review of contractor operating standards in line with Implats policy and standard     Modified engagements with contractors, developed clear principles that will guide the selection and use of reputable contractors with the right skills and values systems to do specific tasks that the business is not able to do     Refer to following link  
  Customers     Industry forums One-on-one meetings Customer feedback Reputation surveys     Effective delivery against terms     Track and respond to customer feedback. Keeping customers informed of any possible supply disruptions due to industrial action      
  Chamber of Mines (CoM)    Contribute to CoM meetings (at CEO and working group level)    Contribution to industry positioning and lobbying activities     Joined the Chamber in July 2012 and have contributed actively to various initiatives including, in particular, the drafting of the Framework Agreement for a Sustainable Mining Industry     Refer to following link  
  BEE or indigenous partners     Operational meetings Board meetings One-on-one meetings     Cost of production Capital delivery Safety Progress with transformation, and labour and social plans Labour relations Community issues     Questions and concerns relating to safety, health and skills development are discussed with partners. Regular updates on progress on employee relations are provided      
  Producer and industry forums     Strategy meetings Industry interest group meetings     All of the above     Ongoing cost pressures within the PGM sector industry resulted in the formation of a platinum CEOs forum, handled through the CoM      
  Advocacy groups     Stakeholder liaison meetings One-on-one meetings Surveys, hotlines and publications     Ensuring greater community benefit Improved labour relations Environmental impacts Greater transparency     Engage with and respond to various stakeholder groups as appropriate      
  Media     Press releases One-on-one interviews (radio, TV and print media)    All of the above     Media releases are distributed throughout the year, updating the public on all material issues affecting the Company