Sustainable Development Report 2012 - Trialogue
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Sustainable Development Report 2012
About this report
This sustainable development report covers the 2012 Links
calendar year, which coincides with Richards Bay Minerals’ Stakeholders can download copies of this and previous
financial year. reports from our website: www.rbm.co.za
Richards Bay Minerals (RBM) comprises the following Rio Tinto’s “The way we work” and other policy and
privately held companies: guideline documents are available online at:
• Richards Bay Mining Proprietary Limited www.riotinto.com/library
• Richards Bay Titanium Proprietary Limited Readers can find an index of the International Council on
• Tisand Proprietary Limited Mining and Metals’ Ten Principles on page 50.
In this report, Richards Bay Minerals, RBM, “we” and “our” Readers can find our Global Reporting Initiative content
refer to all three companies collectively. Where we mention and index on pages 51, 52 and the inside back cover.
Rio Tinto or Blue Horizon, we refer to Rio Tinto International
Holdings Limited and Blue Horizon Investments 41 Feedback
Proprietary Limited respectively. We value your feedback. If you have any comments or
queries regarding this report, please contact:
Our report seeks to reflect the fact that we have been
operating in a sustainable manner and will continue to Communications Department
do so in the future. In it we share our successes and Richards Bay Minerals
challenges, and offer a candid view of our performance and Richards Bay
strategy going forward. South Africa
PO Box 401
Our ownership structure has changed significantly in the 3900
past year, with Rio Tinto now holding a majority stake. We Tel.: +27 35 901 3111
have also taken this opportunity to restructure our report Fax: +27 35 901 3442
slightly and improve its quality, depth and comparability. E-mail: communication@rbm.co.za
Minor restatements compared to last year’s report are www.rbm.co.za
noted where applicable.
This report conforms to Rio Tinto’s internal standards and
has been compiled according to the following international
reporting guidelines:
• the International Council on Mining and Metals’ Ten
Principles;
• the Global Reporting Initiative’s reporting standards,
and specifically the Mining and Metals Sector
supplement (G3.1 MMSS); and
• the King Code on Corporate Governance Principles for
South Africa (King III).
Our reporting will continue to evolve. We are aware of
proposed new reporting guidelines and will incorporate
them as they come into effect.
We believe this report represents a Global Reporting
Initiative (GRI) Application Level C Report. External
assurance has been sought only for those elements
requiring it by law. The RBM board has approved the
content of the report and is satisfied that it fairly represents
RBM’s 2012 sustainability performance.
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RICHARDS BAY MINERALS
SUSTAINABLE DEVELOPMENT REPORT 2012
About this report......................................... IFC Social well-being......................................... 22
Sustainable development report 2012
Occupational health and safety...................... 23
RBM highlights and recognition................... 2
Employer of choice........................................ 24
Company overview........................................ 4
Diversity and equal opportunity...................... 29
Organic growth from Day One......................... 4
Communities................................................. 32
Ownership and structure................................. 5
Product responsibility.................................... 34
Board of directors............................................ 6
Geographic location........................................ 7 Environmental stewardship......................... 36
Essential products........................................... 8 Biodiversity.................................................... 37
Market dominance........................................... 9 Energy and greenhouse gas (GHG)
Production process....................................... 10 emissions...................................................... 39
Mining rights and life of mine......................... 11 Water............................................................ 40
Air quality and emissions............................... 42
Strategic intent............................................ 12
Waste management...................................... 42
Determining our material issues..................... 12
Distribution network ...................................... 44
Sustainability governance.............................. 13
Business strategy.......................................... 14 Governance................................................. 46
RBM’s board of directors .............................. 48
Managing director’s report ......................... 16
RBM board committees ................................ 48
Economic prosperity................................... 18
Board-level concerns .................................... 49
Financial performance................................... 19
Local spend................................................... 19 Appendices.................................................. 50
Broad-based black economic Appendix 1: ICMM principles index................ 50
empowerment scorecards............................. 20 Appendix 2: GRI content index...................... 51
2
RBM highlights and recognition
3
RICHARDS BAY MINERALS
SUSTAINABLE DEVELOPMENT REPORT 2012
A significant economic contributor, both Leading the way in skills development and
locally and nationally diversity
• Largest mineral sands producer and beneficiation • Progressive leadership and cultural development
company in South Africa programme
• Directly and indirectly, contributed R5.8 billion • Historically disadvantaged South Africans represent
(or 0.83 per cent) of government revenues over the 68 per cent of the workforce
past five years • Women occupy 34 per cent of management and
• Major employer and largest single tax payer in 10 per cent of core mining positions
KwaZulu-Natal, representing 3.5 per cent of KwaZulu- • Bursaries, study grants and apprenticeships available
Natal’s gross geographic product to previously disadvantaged individuals
Sought-after production capabilities and Important community investor
products
• Productive union and community relations and forums
• Capable of producing up to 2 million tonnes of product
• Spent R61.3 million on corporate social investment
annually
(CSI) and local economic development (LED), primarily
• One of the world’s lowest-cost titanium feedstock education and health programmes
producers, supplying 14 per cent of the world market
• Constructed two clinics in our host communities
• Supplier of 25 per cent of the world’s high-purity pig
• Committed R30 million to the Bambisanani Learning
iron, and the second-largest zircon producer worldwide
Community Programme and science centre
Ongoing investment in the business • To date invested in excess of R1 billion in
• Rio Tinto share of RBM increased to 74 per cent community projects
• Successfully converted all mining rights World-class environmental management
• Furnace 1 rebuild completed successfully • Best-practice dune forest rehabilitation programme
• Investing in technology to maintain zircon and rutile • Improved water treatment capabilities allow us to reuse
quality grades water up to 21 times
• High-performance Organisation Programme • Implemented real-time emissions monitoring technology
implemented to optimise our logistics
• Re-use of waste gas (CO) from the smelter plant as an
• Zulti South pre-feasibility study well under way to energy source in the production process allows us to
sustain production past 2034 reduce our GHG emissions
Zero-harm safety culture Not without our fair share of challenges
• A Lost time injury frequency rate (LTIFR) of 0.26, our • Global demand remains subdued, while competing
second-best safety performance ever supply streams have come online close to
• OHSAS 18001, ISO 14001 and ISO 9001 certified lucrative markets
• Critical control monitoring plans for material risks • Mined zircon and rutile quality on the decline
developed and monitored • Host community growth and unemployment rates
on the increase
• Still seeking suitable solutions for managing
radioactive tailings
Company overview
“ ‘Responsible beyond mining.’ Our mission is to be the safest,
most reliable and sustainable industrial minerals supplier in the
world, to the benefit of all our stakeholders.”
Founded in 1976, RBM this year celebrated its 37th year of commercial operations in South Africa.
Today we are an award-winning organisation and continue to mine and beneficiate the mineral-rich sands
of the KwaZulu-Natal seaboard around Richards Bay.
Organic growth from Day One
RBM started operations in the Tisand area in 1977 with one dredge mining plant and two furnaces,
producing approximately 400 000 tonnes of titania slag a year.
In 1986 an additional mining plant and furnace were added, increasing output to 750 000 tonnes per
year. During the early 1990s a fourth furnace and mining plant were added, and our titania slag capacity
increased to 1 million tonnes, while pig iron production rose to 550 000 tonnes per year.
We currently have four plants running in Zulti North with the capacity to produce approximately
2 million tonnes of product annually, including around 100 000 tonnes of rutile and 250 000 tonnes of
zircon per year.
Pre-feasibility studies and stakeholder engagement activities are currently under way in preparation for full-
scale mining in Zulti South in 2017.
4
5
RICHARDS BAY MINERALS
SUSTAINABLE DEVELOPMENT REPORT 2012
Ownership and structure
Rio Tinto International Holdings
Rio Tinto’s Iron and Titanium (RTIT) division is the world
leader in the provision of high-quality titanium dioxide
feedstock. RBM forms part of RTIT’s stable of mining and 100% 100%
beneficiation operations.
Richards Bay Mining Richards Bay Titanium
RBM is subdivided into two entities aligned with our main
Holdings Holdings
operations:
• Mining activities are carried out by Richards Bay Mining 74% 74%
(Pty) Limited
• Smelting and beneficiation are carried out by Richards
Bay Titanium (Pty) Limited
Blue
Shareholder structure 0.1% Horison ESPS Trust
Investment
In February 2012 Rio Tinto exercised an option to
acquire BHP Billiton’s 37 per cent shareholding in RBM,
which resulted in Rio Tinto increasing its shareholding to 24% 2%
74 per cent. However, as Rio Tinto has been managing 2% 24%
RBM since 2008, the change has had minimal operational
impact, only strengthening RBM’s alignment with Rio Richards Bay Mining Richards Bay Titanium
Tinto’s management practices.
The remaining 26 per cent shareholding in RBM remains 99.9%
unchanged. Twenty-four per cent is held by Blue Horizon,
our black economic empowerment equity partner, and the
remaining 2 per cent share belongs to our Employee Share Tisand
Participation Trust.
Blue Horizon is a consortium consisting of lead investors
85% 100%
and our four host communities. This broad-based black
economic empowerment (B-BBEE) component enables us
to meet the compliance targets of the government’s Mining Nozalela
Charter. It increases our board’s diversity, strengthening Zululand
Mineral
Titanium
our ability to oversee risks and identify opportunities and Sands
effectively engage with our host communities.
Company overview (continued) Board of directors JF Turgeon JR Olsen MLD Marole EM Dipico (Chairman) Represents Rio Tinto Represents Rio Tinto Represents Rio Tinto Represents Blue Horizon United Kingdom United Kingdom South Africa South Africa JB Magwaza B Mthethwa EJ Dorward-King Represents Blue Horizon Represents Blue Horizon Managing Director South Africa South Africa South Africa * KC Harper is also a board member. She is based in the United Kingdom and represents Rio Tinto. 6
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RICHARDS BAY MINERALS
SUSTAINABLE DEVELOPMENT REPORT 2012
Geographic location
We operate in the uThungulu District Municipality in the adjoin commercial forestry plantations, sugar cane fields
north-eastern region of South Africa’s KwaZulu-Natal and farmland as well as human habitation. The area has
province, with our lease areas falling within the uMfolozi good tourism and recreation potential, with some tourism
and uMhlathuze local municipalities. We have four host infrastructure already in place. A number of high-profile
communities: Mbonambi, Sokhulu, Mkhwanazi and Dube. nature reserves protect the area’s rich biodiversity.
Our head office is located at our smelter facility, Our mineral lease areas include 60 kilometres of coastal
25 kilometres north of Richards Bay. dunes. When mining began in 1975 the dunes comprised
about 20 per cent grasslands and 20 per cent indigenous
The area’s mineral-rich coastal dunes stretch for forest, the remaining 60 per cent having already been
approximately 60 kilometres along the Indian Ocean and planted with commercial forestry.
Lake Nhlabane Zulti North
RBM
headquarters
and smelter
Tisand
Richards Bay
Richards Bay harbour
Zulti South
To Durban South Africa
Company overview (continued)
Essential products
We mine heavy metals and turn them into a number of products.
Titania slag Zircon Rutile Pig iron
Titania slag is our core Zircon is used in the In its titanium metal form, Our high-purity pig iron, a
product and is used production of ceramic tiles rutile is used extensively by-product of the smelting
mainly in the production and sanitary ware. Refined in the aerospace industry operation, is used in the
of titanium dioxide (white) into zirconia, it is used in where it is valued for production of ductile iron,
pigment. We produce a wide range of advanced its lightness, strength, which is in turn used
three types of titania slag heat-resistant ceramic and corrosion and heat extensively in safety-critical
(chloride slag, sulphate products and in jewellery resistance. It is also automotive parts such as
slag and fines) which vary and electronics. Zircon used in artificial joints brake calipers and steering
in the size of their particles sand is also used in the and pacemakers and knuckles.
and are tailored to different foundry industry. in advanced welding
pigment manufacturing processes.
processes.
“Producing minerals and metals essential for modern life.”
Titanium dioxide (TiO2) pigment
What is titanium dioxide used for? minerals, which RBM extracts from the mineral-rich dunes
Over 90 per cent of the world’s titanium output is used in in Richards Bay.
titanium dioxide pigment, which provides whiteness and
These minerals are then processed to remove impurities
opacity to products such as paints, paper and plastics.
(see our production process diagram on page 10) and
It is non-toxic and can be used in food colouring, produce a titanium dioxide-rich product called titania slag.
cosmetics, toothpaste and medicine. It also absorbs The process also produces high-quality pig iron as a by-
ultraviolet rays and is used in sunscreen and paint to slow product.
down the sun’s weathering and fading action.
RBM sells titania slag to pigment producers around
How is it produced? the world. Our titania slag contains 85 per cent
The production of titanium dioxide pigment starts with the titanium dioxide, while our rutile contains 94 per cent
mining of a group of minerals collectively known as heavy titanium dioxide.
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RICHARDS BAY MINERALS
SUSTAINABLE DEVELOPMENT REPORT 2012
Market dominance
“At any one time, no fewer than 20 large ocean-going vessels are either
on the high seas transporting our products to customers across the
world or at anchor loading up or off.”
Thanks to Rio Tinto’s proprietary smelting technology and international marketing links, RBM is highly competitive in
world markets.
We export 95 per cent of our product, yielding a world market share of about 25 per cent in titanium feedstock (titania slag
and rutile), 33 per cent of the world’s zircon output and 25 per cent of the world’s high-purity pig iron.
Europe
Korea
Japan
USA
China
Taiwan
South AfricaCompany overview (continued)
Production process
Process
RBM production efficiency analysis
December 2010 December 2011 December 2012
Mining activity
Sand mined 78 107 950 75 151 547 73 004 352 MT
HMC produced 3 207 245 3 218 466 2 932 536 MT
Major input materials
Energy 18 716 920.48 20 264 694.31 16 825 016.84 GJ
Water 31 253 742.40 31 177 532.59 26 644 513.31 m3
Production output
Total products 1 708 739 1 923 108 1 693 321 MT
Total Titania slag 926 467 1 037 098 880 844 MT
– Chloride slag 799 000 901 658 764 357 MT
– Sulphate slag 98 908 106 489 91 911 MT
– Fines 28 560 28 952 24 575 MT
Zircon 221 987 264 076 263 673 MT
Rutile 75 733 100 406 97 489 MT
Pig Iron 484 551 521 527 451 316 MT
Total mineral waste 1 498 506 1 295 358 1 239 215 MT
HMC = Heavy mineral concentrate
MT = Metric tonnes
GJ = Gigajoules
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RICHARDS BAY MINERALS
SUSTAINABLE DEVELOPMENT REPORT 2012
Mining rights and life of mine
RBM mineral lease areas in 2034. To sustain our slag production as Zulti North’s
reserve diminishes over the next 21 years, we established
Tisand 3 681.22 the Zulti South project to expand our mining operation to
Zulti North 4 449.19 the Zulti South lease area. Mining of the Zulti South area is
Zulti South 3 037.01 set to continue beyond 2034.
Town board 28.00
Zulti South project
Smelter site 227.24 Established in June 2012, the Zulti South project
Servitudes 133.50 spearheads our plan to expand the mining operation to the
Total 11 556.16 Zulti South lease area.
Mining rights We expect that the pre-feasibility study and
In February 2012 the Department of Minerals and environmental approval processes currently under way
Resources confirmed, in terms of the Mineral and will be completed by June 2015 and production is set to
Petroleum Resources Development Act 2002, the commence in 2017.
conversion of RBM’s old order Tisand and Zulti South
Rigorous engagement with our two host communities,
mining rights and approved new order rights for Tisand and
Dube and Mkhwanazi, resulted in a memorandum of
Zululand Titanium. The mining rights came into force on
understanding that covers pertinent social strategies such
9 May 2012 and will run until 8 May 2041.
as skills and enterprise development, local employment,
Life of mines and committee structures for transparent communication.
RBM expects to complete the extraction of the high A relocation action plan is still under development by
mineral content reserves of the Zulti North lease area means of a multi-stakeholder engagement process.
Estimated high mineral content (HMC) reserves (tonnes)
2013 – 2015 8 339 738 1 668
2016 – 2018 6 253 942 2 397 291
2019 – 2021 6 214 020 3 735 803
2022 – 2025 6 079 168 3 581 541
2026 – 2027 6 459 184 4 555 427
2028 – 2030 5 428 361 3 821 570
2031 – 2033 2 316 222 4 898 406
Zulti North Zulti SouthStrategic intent
“We access and use land, rehabilitate unavoidable impacts
and work with local communities to help with their needs in
the most effective manner we can. In all cases, this involves
ongoing consultation with our host communities, public
authorities and others affected.”
Determining our material issues
Richards Bay Minerals has been mining in the Richards Bay area and interacting with the local
communities for 36 years. The issues we deem material have evolved according to the understanding of
the area we have gained over this length of time, and of the issues that have the potential to affect our
business and the region on an economic, environmental and social level.
We share many issues and concerns with the mining sector in general, such as:
• The need for accurate forecasts regarding product prices, market demand and available resources in
order to manage capital effectively.
• The need to manage our environmental impact and rehabilitate previously mined land.
• The need for effective labour relations and community engagement.
We continually reassess our material issues according to changing business and stakeholders’ needs and
concerns, and robust stakeholder engagement, academic research and risk assessments play a critical
role in this process.
Stakeholder engagement
We have a well-established communication and stakeholder relations team that ensures we proactively
engage our material stakeholders. We regularly assess the state of our relationships as well as the
potential risks and impacts associated with them.
Our stakeholders consist of:
• shareholders;
• employees and unions;
• four host communities (Sokhulu, Mbonambi, Dube and Mkhwanazi);
• customers;
• community trusts;
• service providers and local entrepreneurs;
• business chambers;
• special interest groups (such as NPOs and academic institutions);
• utilities, in particular Eskom and Transnet;
• municipal and government departments (local and national); and
• national, regional and local media.
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RICHARDS BAY MINERALS
SUSTAINABLE DEVELOPMENT REPORT 2012
Host community engagement Issues of material concern
We have a multi-pronged engagement strategy, and We have grouped our material issues into six main themes
commission socio-economic baseline, social impact and or strategic pillars which define our business strategy.
heritage assessments of all mining areas. We are proud In line with the six strategic pillars we have established
of our well-established manner of engaging communities specific performance measures and targets to assess our
in preparation for mining, on operational issues during overall performance.
mining and on post-mining planning. We also have a
rigorous resettlement action plan process that involves all Issue of material concern Strategic pillar
interested and affected stakeholders, with a special interest • Health and safety in the Care
in those community members who will be directly affected workplace
or resettled. • Employees’ health
We further seek to support and strengthen traditional • Legal compliance
councils’ capacity to effectively deliver on their mandate. • Cost-effective productivity Operational and
The community empowerment trusts, as equity • Asset utilisation and stewardship financial delivery
shareholder since the 2009 B-BBEE deal, also present • Good governance
a platform for engagement and assist in the planning • Continuous improvement of Growth and
and implementation of all socio-economic development processes innovation
programmes. • Robust decision-making
• Production process reliability
We work closely and in partnership with local municipalities
in the identification of local economic development (LED) • Resource optimisation
projects. This is done through the integrated development • Strong employee relations People
planning sessions held by the municipalities. Our five-year • High-performance culture
integrated development planning (IDP) forms the basis of all • Skills acquisition, retention and
our local economic development activities. development
• Inspirational leadership
Risk assessment • Sound environmental Environment,
RBM recognises that risk is an integral and unavoidable management communities
component of our business and is characterised by both and external
• Environmental monitoring and
threats and opportunities. We endeavour to foster a risk- management stakeholders
aware corporate culture in all decision-making.
• Good stakeholder relationships
Our risk management processes follow Rio Tinto’s strict • Maintaining licence to operate
standards. Every second year we carry out a major risk • Embedding sustainable
and opportunity evaluation. This evaluation considers the development
following internal and external factors: • Delivering on customer Customers and
expectations markets
Internal factors • Effective, fact-based marketing
• Key organisational values and strategies • Efficient and effective logistics
• Our current and forecast financial position
• Significant operational risks
• The expectations of stakeholders, including labour
Sustainability governance
• Critical enabling factors for success, such as our ability We maintain our business viability by actively embedding
to innovate long-term concerns into our decision-making processes
and business strategy. We have dedicated teams
External factors overseeing stakeholder engagement, risk management,
• The local and global economic outlook corporate governance, communication, human resources,
• Sector-specific challenges production oversight and environmental management.
• Stakeholders’ concerns
• Relevant legislative and voluntary compliance standards In compliance with the new Companies Act, we
• Recognised sustainability risks established a Social and Ethics committee in 2012, to
oversee our sustainable development performance.
The evaluation is scrutinised and updated annually, and any
necessary adjustments are made to our rolling five-year In this report we cover our material business concerns and
strategic plan. relevant GRI and internal performance indicators.Business strategy
RBM’s strategic five-year plan details our aspirations and responses
with regards to our material business concerns. We review and update
our strategy annually, and are confident we are on track to meet our
2013 targets.
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RICHARDS BAY MINERALS
SUSTAINABLE DEVELOPMENT REPORT 2012
Maintain our status as a
“Zero harm” organisation
Be supplier of choice in our Our strategy is to create a safe place
chosen markets of work for all our employees and
Our strategy is to deliver on contractors. Two aspects are critical
customer expectations through to our strategy, behavioural safety
reliable supply of quality product and reducing the risk in our systems
against agreed delivery schedules. and processes. Our strategy starts
Collaboration with Rio Tinto with leadership development and is
marketing is a key strategic driver. driven through management-worker
health and safety committees.
CUSTOMERS
AND CARE
Be prime corporate citizen Add value through operations
MARKETS Our strategy is to maximise
and developer of choice
Our aim is to build good working production at the right quality
relationships with our host through the optimum utilisation of
communities, government and our assets. This requires that we
ENVIRONMENT, RBM
external stakeholders, and OPERATIONAL manage the ore body responsibly
COMMUNITIES SUSTAINABLE
understand our impact on the AND FINANCIAL and apply leading technology
AND EXTERNAL DEVELOPMENT
environment. Our strategy is to DELIVERY and processes in response to
STAKEHOLDERS FRAMEWORK
develop sustainable communities market-driven production plans.
and, as part of Rio Tinto's global Key to our strategy is tight financial
commitment, we aim to achieve management of costs and
a net positive impact on our working capital. Good corporate
environment by closure. governance includes annual
GROWTH AND
PEOPLE risk assessments.
INNOVATION
Grow value through industry-
Be the employer of choice leading technologies
Our strategy is to attract, retain and and products
develop creative and innovative Our growth and innovation strategy
employees. Through inspirational is aimed at building our capacity to
leadership, effective employee expand operations, while doing so
engagement, appropriate with increasing efficacy. We apply
education and training and strong Rio Tinto’s business improvement
teamwork, we will drive a culture (BI) process to evaluate projects,
of performance. reduce bottlenecks and continuously
improve processes.Managing Director’s report
“Safety remains our number one
priority. We had a successful year and
I’m delighted everyone who came to
work in 2012 went home safely at the
end of the day. I wish to thank all our
employees and contractors for staying
safe – let’s keep it up!”
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RICHARDS BAY MINERALS
SUSTAINABLE DEVELOPMENT REPORT 2012
RBM’s ownership structure changed in September 2012, water stewards and play a key role in managing demand
with Rio Tinto’s shareholding increasing to 74 per cent as in both the short and long term. Water extraction from our
a result of their acquisition of BHP Billiton’s 37 per cent three water sources is continuously monitored and suitable
share. Rio Tinto is now the world’s largest producer of lake depth limits are in place to prevent our mining and
various industrial minerals. This structural change has not smelter operation endangering the ecological balance of
significantly impacted the way we operate, as Rio Tinto has Lake Nhlabane.
been managing our operations since 2008.
Our water usage and practices are based on sound
Strained global economic conditions continued to affect the environmental research. A further independent ecological
mining sector in 2012, and investors in general remained study to assess our water resources and management is
cautious. Demand for raw materials, especially in the US scheduled for 2013, and its results will augment data from
and Europe, fell in line with the dip in construction and past studies.
vehicle manufacturing. We remained resilient however, and
countered the weak European demand by growing our In September 2012 we played host to the Rio Tinto board
Asian markets. of directors, giving us the opportunity to showcase both our
Esibusisweni rural development centre and our post-mining
We have maintained our reputation as a reliable, globally coastal dune forest rehabilitation programme.
competitive producer of high-quality mineral products. Our
strong financial performance has enabled us to reward our Conducted in partnership with the University of Pretoria,
shareholders and benefit our host communities. the dune rehabilitation project continues to set standards
worldwide and has resulted in 69 scientific publications over
Maintaining our global competitiveness going forward will the last two decades. We remain committed to preserving
involve addressing four key challenges: this unique and culturally significant environment through
• the difficulty of attracting and retaining skilled individuals; scientific research-based practices.
• the rising cost of electricity;
Looking forward, we continue to work hard at maintaining
• risks associated with political and social instability in both our capital assets and human resources – particularly our
South Africa; and core skills – so that we are in a strong position to react quickly
• the growing pressure on local water sources. to increased demand when the global economy recovers.
Our long-term success relies on having a diverse workforce The Zulti South mining pre-feasibility study will be finalised
working safely at competitive productivity levels. We during the next financial year and mining there is set to begin
continue to be inspired by our leadership development in 2016. Our application to convert our old order mining
programme, which is the vehicle for workplace culture rights to new order rights has also been successful. Our new
change at RBM and the driving force behind our strategy to rights came into force on 9 May 2012 and will remain valid
develop a diverse workforce and nurture leadership potential until 8 May 2041.
at all levels within the organisation.
Being RBM’s Managing Director for the last two years has
Safety remains our number one priority. I am delighted to been a privilege. I would like to welcome Mr Mpho Mothoa
report we suffered no fatalities in the reporting period and we who will take over from me in 2013. I am confident that
achieved our second-best safety performance yet. his experience as the Chief Operating Officer at Rössing
Uranium in Namibia, and this 13 years with Rio Tinto, will be
To tackle the challenge of our own carbon footprint and greatly valued at an already strong and resilient RBM.
to address problems associated with energy supply in
South Africa, we are exploring and implementing a number I thank all our employees for their hard work, our leaders
of energy-saving initiatives. One of these initiatives includes for leading by example, and our stakeholders for their
improving our energy efficiency by refurbishing a second valued input, advice and encouragement. Your efforts have
smelter furnace, developing more economical compressed- been much appreciated. Special thanks go to our board of
air management programmes and installing energy-efficient directors and executive team for their insightful leadership
lighting and point-of-use power factor correction at and support and to our host communities and community
other installations. leaders for helping us build a sustainable future in harmony
with the local environment.
RBM values good relations with its stakeholders and works
hard at ensuring open and honest communication. We
engage with our stakeholders extensively, especially around
future plans and business strategy. As a result we remained,
for the most part, unaffected by the serious unrest in the
South African mining sector in the period under review.
EJ Dorward-King
Water is a vital resource, both for our operations and our Managing Director
growing host communities. We have to be responsible Richard's Bay18
Economic prosperity19
RICHARDS BAY MINERALS
SUSTAINABLE DEVELOPMENT REPORT 2012
RBM is the largest single tax payer and a major employer Local community spend
in the KwaZulu-Natal province, representing 3.5 per cent Beyond the majority support we give to local suppliers,
of KwaZulu-Natal’s gross geographic product. As such, we we also have a number of corporate social investment
directly and indirectly accounted for $713 million (or 0.83%) (CSI) and local economic development (LED) projects.
to government revenues over the past five years. More information about these projects can be found on
page 33.
Financial performance
Revenue/Cash generated from operations Community investment
2013 2012
fore-
cast
2011
2012
2010
2011
2009
500 1 000 1 500 2 000 2 500
Millions US$ 2 4 6 8 10 12 14
Millions US$
Revenue Cash generated from operations
CSI LED
Local spend
Local supplier spend
We outsource non-core components of the business,
such as security, IT maintenance, plumbing, overhauling,
and others. This enables us to concentrate on our core
business. It also creates a significant opportunity for service
providers and contractors, thus impacting positively on
the economy and the lives of thousands of families locally,
provincially and nationally.
Overall we spent R3.6 billion on South African-
based suppliers, representing 99 per cent of our total
supplier spend.
Supplier spend
International: 1% Local community-based
suppliers: 4%
National: 25%
KwaZulu-Natal: Richards Bay
19% area: 52%Broad-based black economic empowerment scorecards
We seek meaningful transformation that empowers historically disadvantaged South Africans (HDSAs) while maintaining
our ability to grow sustainably. Through our efforts we also hope to advance the social and economic welfare of
host communities.
Our 2009 B-BBEE deal saw us become fully compliant with the Department of Mineral Resources’ (DMR) 26 per cent black
economic empowerment (BEE) ownership target – five years before the 2014 deadline.
Mining Charter
For the Mining Charter Scorecard, we conducted our own assessment as follows:
Weight- Performance Targets
ing 2011 2012 2012 2013 2014
Element Description (%) (%) (%) (%) (%) (%)
1 Ownership Minimum target for effective HDSA
ownership 5 26 • 26 • 26 26 26
2 Procurement Procurement of capital goods 5 39 • 30 • 20 30 40
and enterprise Procurement of services 5 41 • 48 • 50 60 70
development
Procurement of consumables 2 30 • 37 • 25 40 50
Multinational suppliers’ contribution to the
social fund 3 • • 0.50 0.50 0.50
3 Employment Diversification of Top management 3 43 • 43 • 30 35 40
equity the workplace to Senior management 4 57 • 54 • 30 35 40
reflect the country’s
Middle management 3 89 • 59 • 40 40 40
demographics
to attain Junior management 1 56 • 80 • 40 40 40
competitiveness Core and critical skills 5 79 • 90 • 30 35 40
4 Human Development of requisite skills, including
resource support for South African-based research
development and development initiatives intended to
develop solutions in exploration, mining,
25 21 • 16 • 4.0 4.5 5.0
processing, technology efficiency (energy
and water use in mining), beneficiation as
well as environmental conservation and
rehabilitation
5 Mine Conduct ethnographic community 15 LED projects • LED projects • Implementation
community consultative and collaborative processes accepted by accepted by of projects will
development to delineate community needs analysis communities communities serve to enhance
and munici- and munici- relationships
palities, and palities, and amongst
projects projects being stakeholders leading
being implemented to communities
implemented owing patronage
to projects.
6 Sustainable Improvement of the industry’s 12 100% • 100% • Annual progress
development environmental management compliant compliant achieved against
and growth approved EMPs.
Improvement of the industry’s mine health 12 100% • 100% • Annual progress
and safety performance compliant compliant achieved against
commitments in
the tripartite action
plan on health
and safety.
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SUSTAINABLE DEVELOPMENT REPORT 2012
This year we improved our score against employment
equity and skills development. We appointed a black
female in an executive position to improve our top
management performance, while our Adult Education
Training (AET) programme continues to expand and deliver
results as part of our Social and Labour Plan.
During a recent site visit by the Mining Qualifications
Authority (MQA), our AET programme received high
praise and we are pleased that four learners successfully
completed AET IEB level 4 in both numeracy and literacy
for the first time in 2012.
Consistent performance for the procurement of services
element remains challenging. To improve our performance
we embarked on a supplier management initiative whereby
all suppliers are required to be BEE compliant. We hope
to achieve a procurement of services score of 60%
(2012: 48%) in the next financial year.
Broad-based black economic empowerment
scorecard
Our progress against the Department of Trade and
Industry’s (dti) Generic B-BBEE Scorecard is presented
below.
Unverified B-BBEE scorecard for 2012
Weighting Score
Ownership 20 17.00
Management 10 6.75
Employment equity 15 10.32
Skills development 15 12.00
Affirmative procurement 20 16.00
Enterprise development 15 10.57
Socio-economic development 5 5.00
Broad-based BEE Score 77.64
Broad-based BEE Status Level 3
After the 2010 B-BBEE verification we realised that we
had to improve our internal verification methodology. We
therefore conducted transformation training and awareness
sessions, as well as a BEE verification mapping process.
We identified a number of gaps in our existing practices
and therefore developed a data collation framework for
verification purposes. NERA was subsequently appointed
to externally verify our BEE credentials in 2013 for FY 2012.
Our efforts proved successful as we managed to improve
our score in a number of areas. Our scorecard is now a
better reflection of our progress towards transformation.
We did not seek external verification for our 2011
performance in 2012, however NERA will verify our 2012
performance in the second quarter of 2013.Social well-being
“We remain committed to our goal of
‘Zero Harm’ and are pleased to report
that we had zero fatalities over the past
three years.”
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RICHARDS BAY MINERALS
SUSTAINABLE DEVELOPMENT REPORT 2012
Occupational health and safety by integrating occupational health and safety aspects into
our leadership development programme and our employee
Maintaining our status as a “zero-harm” organisation incentive schemes and wellness programmes.
through the use of effective health and safety management
systems and practices remains a key priority for RBM. Our entire workforce is represented in formal joint
management-worker health and safety committees, and
We believe safety is everyone’s responsibility. We therefore detailed health and safety agreements have been signed
continuously reinforce our behaviour-based safety culture with union representatives.
Rates of Injury, Occupational Diseases, Lost Days, Absenteeism and Fatalities
2012 target
(where
2009 2010 2011 2012 applicable)
Fatalities 1 0 0 0 0
Lost time injuries 19 7 12 11
Medical treatment cases 11 18 11 8
First aid cases (minor injuries) 71 78 55 67
Occupational diseases 0 0 0 0 0
All injury frequency rate (AIFR) 0.69 0.50 0.54 0.44 0.51
Lost time injury frequency rate (LTIFR) 0.44 0.14 0.28 0.26
Occupational disease frequency rate (ODFR) 0 0 0 0 0
Safety Health
This year we achieved our second-best safety record of all RBM has a well-established employee wellness
time. While we are proud of our accomplishment, we still programme, and with KwaZulu-Natal suffering from high
had 11 lost time injuries and 67 minor injuries – figures on HIV/Aids and tuberculosis (TB) prevalence rates, voluntary
which we are determined to improve. counselling and testing (VCT) for HIV, TB and other chronic
illnesses forms a major part of it. Our goal is for 90 per cent
Our approach to safety is guided by the Chamber of Mines’ of employees to know their HIV status and 70 per cent
“Road to Zero Harm” campaign and Rio Tinto’s internal their overall wellness status by the end of 2013.
standards. We also comply with both the Occupational
Health and Safety and the Mine Health and Safety Acts of To achieve this goal, wellness examinations have been
South Africa. incorporated into the regular occupational health medical
examinations conducted at our on-site health-care facility.
We identified various risk-reduction opportunities through VCT services are also offered to all employees visiting the
a wide-reaching safety risk assessment conducted facility. We hold regular VCT and wellness days to raise
in 2011 and in 2012 focused on implementing these awareness and urge all employees to get tested.
recommendations.
We focus on a variety of preventative measures to mitigate
In continuing efforts to improve our safety systems, we have the risk of employees developing health-related problems.
developed several critical control monitoring plans (CCMPs), These include enforcing the use of personal protective
which allow us to assess the effectiveness of the various equipment (PPE) to prevent injury and noise-induced
safety control systems used throughout our operations. We hearing loss, conducting regular employee hearing tests,
also improved our reporting and investigation of significant performing blood screening, offering inoculations or
potential incidents (SPIs) to lower the number of near-injuries. vaccinations for Hepatitis A and Hepatitis B, and making
condoms readily available throughout our facilities.
To improve the efficacy of all our elected health and
safety executive (HSE) members we have updated our In 2012 we identified fatigue as a significant risk to the
training modules and will continue to monitor adherence safety of our employees. During the year we developed
to these new guidelines via internal and external audits a fatigue management programme which includes
and inspections. training and screening to minimise the impact of fatigue,
especially in our transport team. We plan to implement the
In 2013 we will continue to stress the importance of programme fully in 2013.
HSE representatives in the workplace and expand their
responsibilities to include a wider range of health and safety-
related issues.Social well-being (continued)
Employer of choice Leadership development programme
RBM’s leadership development programme (LDP) is a
We aspire to be an employer of choice and attract, retain
flagship programme that drives cultural transformation
and develop creative and innovative employees. We
throughout the business. Championed by senior
recognise our employees as central to our organisation’s
leadership, the programme’s goal is to:
success and believe in providing inspirational leadership,
clear direction, strong teamwork processes and a culture of • increase and sustain employee participation and
performance underpinned by relevant and dynamic training engagement;
programmes. • improve interpersonal and team relationships;
• improve communication;
We continually investigate and implement initiatives to
improve employee performance, review processes and • improve safety; and
structure, attract and retain talent, and align our business • increase overall productivity.
function with our strategy.
Established in 2009, the programme continues to deliver
This year the number of employees grew by 3.25 per cent, good results. We have seen a positive change in our
while the average number of hours worked per employee employee engagement as well as our safety record.
decreased marginally by 2.1 per cent.
External contractors provide a large proportion of our
During the year we reviewed some of our key business labour requirement and this poses a significant challenge
processes and structures and identified various cost-saving to our aspirations to improve the company’s culture. In
and efficiency-improvement opportunities. Implementing response we have embarked on an initiative to partner
these proposed changes will continue in 2013. with these companies and together develop a leadership
framework in their respective organisations. In 2012 we
conducted our first contractor engagement session.
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SUSTAINABLE DEVELOPMENT REPORT 2012
Employment numbers
2009 2010 2011 2012
Number of employees (permanent and contract) 4 582 5 076 4 549 4 697
Total hours worked 8 693 593 9 938 393 8 525 923 8 618 795
Hours per employee 1 897 1 958 1 874 1 835
Leadership development programme activities
Audience Activity Achievements and future plans
Senior Convene engagement forums with RBMs Established forum and held four meetings during the year.
management leadership to share LDP programme One session scheduled for 2013.
successes and examine its business
value and potential.
Employees Establish a Leadership Connexions (LC) Completed the programme and presented LC training to a
training programme, based on leadership total of 400 employees in 37 sessions.
development principles. The programme
connects individuals across the
business to improve their team-working
capabilities.
Conduct Team Connexion (TC) Successfully piloted the programme and held a total of
sessions with our unskilled/ semi-skilled 103 sessions. This programme is set to reach a total of
employees. 130 employees.
We will continue the roll out of the TC to the outstanding
27 teams in 2013.
Conduct regular Organisational Culture Eighty per cent of our employees participated in the 2012
Index (OCI) surveys. OCI survey. The results were shared with all employees. It
highlighted some opportunities for improvement.
Going forward we will address key items raised by the OCI
through our talent management processes and via the LC
and TC sessions. We also plan to conduct the next OCI in
September 2013.
Conduct one-day leadership orientation Training material finalised.
sessions with all new employees. Conducted a total of 20 LDP sessions:
– Six one-day sessions
– Eight adapted sessions for frontline employees
– Six expanded two-day sessions for Shop Stewards
In 2013 we plan to conduct three one-day sessions.
Hold divisional feedback sessions to Seven divisional feedback sessions completed.
analyse the outcomes of the 360 degree Our General manager will review and implement remedial
internal assessment of senior leadership actions based on the team assessment report.
impact (SI) and LC programmes.
Hold debriefs with all individuals that Held LSI debrief with 72 individuals, and 13 MI debriefs.
took part in the 360 degree internal Going forward we will hold debrief sessions with the
management impact (MI) and the outstanding 84 delegates.
lifestyles inventory (LSI) assessments,
and discuss opportunities for personal
development.
Contractors Conduct contractor training. This is the Programme planning completed.
five-day LDP specifically aimed at RBM In 2013 we plan to convene a contractor engagement forum;
contractors. conduct a needs assessment; develop tailored proposals; pilot
Condense the programme and tailor the LDP with the leadership of our contractors; and role out the
content to a two- to three-day course. programme to all our contractors.Social well-being (continued)
Remuneration and incentive schemes
Part of our “employer of choice” strategy is to attract and retain key skills by remunerating our employees at wage levels
above local industry standards. We also incentivise our employees by providing performance-linked bonuses and dividend
pay-outs from the employee share participation scheme.
Production bonus pay-outs
2011 2012
Quarter Number of employees Total amount paid Number of employees Total amount paid
Q1 – – 1 146 3 316 858.86
Q2 1 175 4 053 365.77 0* 0.00
Q3 1 191 4 046 265.57 0* 0.00
Q4 1 199 3 339 574.57 0* 0.00
Total 11 439 205.91 3 316 858.86
* Targets not met.
Production bonus scheme
Introduced in April 2011, our production bonus scheme is linked to both individual and company-wide targets.
The scheme’s core criteria are safety, productivity, teamwork and cost management indicators, while factors such as
absenteeism and unpaid leave are also factored in. Bonuses are not awarded to employees who fail to report an injury, are
absent without leave or partake in industrial action.
The scheme applies to all permanent bargaining unit employees employed at the date of payment. Payments are made
quarterly in arrears and are limited to 8 per cent of retirement funding income.
With more stringent targets in place this year a total of R3.3 million (2011: R11.4 million) was paid out in bonuses.
Employee share participation scheme
Our employee share participation scheme (ESPS) was established in 2009. Through the scheme, permanent employees
who have been with us for more than six months collectively own 2 per cent of the business and are entitled to a share of its
profits.
All ESPS shares are held in a trust and dividends are paid out biannually to employees. Dividends are based on 0.67 per
cent of RBM’s earnings before interest and tax (EBIT) and all employees receive the same amount.
In 2012 the scheme paid out a total of R30.4 million (2011: R14.2 million) or R15 663 (2011: R8 135) per employee.
Individuals remain beneficiaries of the scheme until the following dividend pay-out should their employment be discontinued
due to death, retrenchment, disability or ill health. Where employment is terminated for other reasons (e.g. resignation,
dismissal, etc.) all ESPS benefits are forfeited immediately.
Dividends* paid to employees
Number of Amount Total amount paid
Year Month employees (R) (R million)
2010 April 1 646 2 366.67 3.9
2010 September 1 647 2 365.67 3.9
2011 March 1 731 4 776.97 8.3
2011 September 1 757 5 340.24 9.4
2012 March 1 804 5 968.24 10.8
2012 September 1 843 8 577.11 15.8
Total 8 671 52.0
* Dividends refer to after tax payment figures.
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RICHARDS BAY MINERALS
SUSTAINABLE DEVELOPMENT REPORT 2012
Training and education all age groups, a sign that we are making an investment for
South Africa’s chronic shortage of critical skills continues the future.
to influence our business. We have seen a significant
We provide accredited training in engineering, mineral
reduction in the number of professionally qualified,
extraction, metallurgy and mineral processing, as well as
experienced specialists and middle management
Adult Basic Education and Training (ABET) Level 1 – 4 in
employees.
collaboration with external skills development providers.
In our social and labour plan (SLP) we have identified These training programmes comply with the Skills
“hard-to-fill-vacancies” and committed ourselves to provide Development Act and are fully accredited by the Mining
training support and career development opportunities to Qualification Authority.
all employees with the ability and desire to obtain these
critical skills. Our partnership with NEPAD enables us to nominate
employees with high potential to participate in the Tutu
In this regard the accompanying graph shows a significant Leadership Development Programme. During the year one
increase in employment of semi-skilled employees across of our managers completed the programme.
Training hours per employee
2009 2010 2011 2012
Total hours per employee 64 051 80 749 101 826 177 712
Average hours of training per level
2009 2010 2011 2012
Top management 4.5 38.6 10.4 36.1
Senior management 17.6 55.0 27.3 51.9
Professionally qualified, experienced specialists and mid-
management 41.1 65.4 59.4 67.2
Skilled technical and academically qualified workers, junior
management, supervisors, foremen, and superintendents 38.8 47.8 64.3 68.1
Semi-skilled and discretionary decision-making 25.3 29.4 40.6 82.3
Unskilled 32.8 42.4 51.8 75.0Social well-being (continued)
Speak-OUT Union representation (permanent employees)
Employees can use our own grievance procedure or the
Rio Tinto Speak-OUT system to anonymously report any 2012 60.2%
fraud, unacceptable behaviour by employees, or human
2011 62.3%
rights violations. No such employee-related incidents were
reported during the year. 2010 60.4%
More information on Speak-OUT is available on page 49. 2009 60.3%
Union representation and labour unrest
Union representation remained stable at around 60.2 per Union membership in 2012
cent (2011: 62.3 per cent) throughout the year, with
Solidarity: 4
71 per cent (2011: 67 per cent) of our 1 355 unionised
employees represented by the National Union of
Mineworkers. We regularly engage the National Union
UASA: 209 NUM: 964
of Mineworkers, as well as the other unions, on matters
related to our employees.
We are pleased to report that we continue to have positive
relationships with all the represented unions and for more RBEU: 178
than two years there has been no labour unrest.
Labour unrest
Number of Reason for
Year strikes Date Duration Location unrest Response
2009 1 9 July 1 day RBM head Recruitment An agreement was reached
offices with NUM to ensure qualified
candidates were hired as
contractors
2010 1 27 August – 4 days RBM head Company An agreement was reached at
1 September offices conditions the CCMA when revised three-
year offer was accepted by NUM
2011 None
2012 None
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RICHARDS BAY MINERALS
SUSTAINABLE DEVELOPMENT REPORT 2012
Diversity and equal opportunity Employees by age
We have set out specific human resource development 2009 2010 2011 2012
targets in our social and labour plan (SLP). Notably, we
Under 30 279 341 338 501
aspire to have a 40 per cent female employee complement
30 – 50 1 080 1 082 1 118 1 277
by 2013 as part our drive to increase the number of
historically disadvantaged women in mining and exceed Over 50 368 406 423 560
the goals set out by the South African Mining Charter. Total 1 727 1 829 1 879 2 338
Employees by sex The proportion of employees below 30 years of age
continues to rise, while the number of employees aged
2009 2010 2011 2012 between 30 and 50 has declined by 7.9 per cent over the
Male 1 522 1 582 1 598 1 975 past four years.
Female 205 247 281 363
Eight-five per cent (2011: 87.4 per cent) of our workforce is
Total 1 727 1 829 1 879 2 338 made up of skilled and semi-skilled employees.
Although still far from achieving our 40 per cent goal (2012: People living with disabilities are proportionally under-
15.5 per cent), we have seen average growth of 1 per cent represented at RBM, without any significant movement
per annum over the last four years. overall in this area. In 2011 0.2 per cent of the workforce
included people living with disabilities, a reduction from
Employees by race
0.3 per cent in the previous two years.
2009 2010 2011 2012
The proportion of foreign nationals working at RBM has
African 1 207 1 279 1 311 1 673 remained unchanged for the last four years at 0.1 per cent
Coloured 29 33 38 48 of the total workforce.
Indian 148 164 172 211
White 343 353 358 406
Total 1 727 1 829 1 879 2 338
There has been no significant movement overall in our
race demographics. We are on track in terms of the Mining
Charter Scorecard, but with opportunities for improvement
in terms of the DTI’s generic scorecard in terms of
employment equity.
Employees per level*
2009 2010 2011 2012
Top management 12 11 8 6
Senior management 25 24 31 41
Professionally qualified, experienced specialists and mid-
management 258 279 197 216
Skilled technical and academically qualified workers, junior
management, supervisors, foremen, and superintendents 681 712 757 837
Semi-skilled and discretionary decision-making 751 803 886 1 150
Unskilled 0 0 0 0
Temporary employees 0 0 0 88
Total 1 727 1 829 1 879 2 338
* Applies only to employees on our payroll and excludes contract labour.You can also read
