SOCIAL CAPITAL AND LICENCE TO OPERATE
Legal compliance

Mining Charter in South Africa

We have continued to deliver on our commitments made in the SLPs for each of our operations. We have participated in the Mining Charter assessment conducted by the DMR in 2015 and have been assessed as compliant. (see here) This year we obtained our first broad-based black economic empowerment verification certificate for the Group and its subsidiaries. (see here)

In December 2014 Implats concluded an equity transaction for the benefit of qualifying employees of the subsidiary company, Impala Platinum Limited (Impala). In terms of this transaction, the newly formed Impala Employee Share Ownership Trust (ESOT) subscribed for new Impala shares, comprising 4% of Impala’s share capital. The Implats board of directors approved the provision by Implats of a loan of approximately R1.1 billion to the trust to enable the trust to subscribe for the trust shares. This transaction provides a meaningful way of aligning employees’ interests with the future profitability of Impala, while also increasing the ownership of HDSAs to well above the 26% level.

Indigenisation in Zimbabwe

Government has, in line with the pronouncements made on the 2015 national budget, amended the Indigenisation and Economic Empowerment Act to include the role to be played by relevant sectoral ministries. The rationale behind the inclusion of the sectoral ministries is that special circumstances prevailing in each sector will be taken into account, rather than adopting a ‘one size fits all’ approach.

According to the gazetted amendments, business are to submit indigenisation implementation plans for approval to the respective ministries, who in turn will conduct an indigenisation and empowerment assessment rating. When the assessment has been made, the minister will, at the written request of the business, issue a certificate of compliance to the business within 14 working days. The minister will then transmit a copy to the National Indigenisation and Economic Empowerment Board for inclusion in the register.

In Zimbabwe we remain committed and supportive of the country’s indigenisation laws. We have advanced discussions with government on the ESOT. The Reserve Bank of Zimbabwe is now analysing the proposals. Engagement with government on the remaining aspects of the Indigenisation Implementation Plan (IIP) continues.

During the financial year Mimosa made an additional US$2 million payment towards the community trusts, bringing the total contribution to US$6 million. The dispute between the Zvishavane Community Share Ownership Trust (ZCSOT) and Mberengwa Community Share Ownership Trust (MCSOT) led to a resolution that mandated payment of the US$10 million originally payable to the ZCSOT alone to be shared with the MCSOT. The claim for the share by MCSOT was based on the position that 798 hectares of the 6 591 hectares occupied by the Mimosa Mine lease are in Mberengwa. The apportionment of the US$10 million would be on a 70% – 30% basis to ZCSOT and MCSOT, ie US$7 million and US$3 million respectively.

Government continues to maintain pressure for the release of the additional funds to the community trusts.

Our focus for 2016 and beyond

In the forthcoming year we shall focus on the following areas:

• Participating in the review of the Mining Charter and seeking alignment with the Broad-Based Black Economic Empowerment Act and Codes of Good Practice
• Working towards compliance to the new B-BBEE Codes
• Implementation of our approved SLPs in South Africa;
• Meeting the objectives of the President's Framework Agreement and the National Development Plan (NDP).
• Advancing the implementation of the Community Share Ownership Trust and Employees Share Ownership Trust as part of the Indigenisation Plan
• Continue to play a leading role in the Chamber of Mines, helping to ensure that it lobbies on key issues and for a consistent and stable regulatory environment.