Letter from the CEO, David Brown

Dear stakeholder

I am pleased to present our Sustainable Development Report for the 2009 financial year. This report reviews our group sustainable development programme over the past year, and reflects on the strategy and structures that we have put in place to address the challenges and opportunities that we face.

Tragedy at Impala

This report is published not long after we experienced a great tragedy at Implats. A fall of ground accident on 20 July 2009 claimed the lives of nine employees. Safety remains one of our most significant concerns at our operations and in our industry. We are fully committed to achieving our vision of zero harm and this tragic event has further strengthened our resolve to reach this. On behalf of our board and management team, I extend our heartfelt condolences to the families and colleagues of those who died both in this accident and in others during the 2009 financial year.

Important year for sustainability at Implats

This review comes at an important juncture for the company:

  • firstly, it was informed by an organisational review process that came from a fundamental review of our business strategy and goals undertaken in FY2008. This process resulted in the establishment of a group-level Sustainable Development Forum, comprising multi-disciplinary ‘champions’ who meet on a quarterly basis to guide group strategy, and review progress made. This forum is supported by operation-based discipline heads, and reports into the group’s leadership structures. The overall sustainable development process is part of the board’s mandate. Our approach to sustainable development and the way in which it is managed is discussed more comprehensively in the Understanding Implats' sustainable development footprint and How Implats manages sustainable development sections of this report. Included in this approach has been the establishment of a dedicated stakeholder engagement unit to address our many stakeholders – employees, unions, shareholders, government, NGOs and others.
  • secondly, the current state of the financial markets and, indeed, the market for our products, has given rise to serious questions in relation to the sustainability of the PGMs industry, and how we are best able to deliver value to a broad range of stakeholders. I am confident that the measures we have put in place – to manage our operations and, in particular, to position the company for continued, cost-effective growth – will ensure that we will thrive over many decades. The Economic performance section of this report and our Annual Report 2009 provides more detail on this.
David Brown, Chief executive officer

David Brown
Chief executive officer

FY2009 saw the establishment of the Implats Sustainable Development Forum

Compliance

In this report, we have again been guided by the Global Reporting Initiative’s (GRI) G3 guidelines. Key performance indicators in this report have been assured by an independent third party, KPMG. We have integrated within this report feedback on Implats’ commitment to South African minerals legislation and, in particular, feedback on our performance against the targets we have committed to in our SLPs, developed in response to the Mining Charter. As a signatory to the UN Global Compact, we have also reported on our performance against its principles and our continued implementation thereof.

Material issues

Our approach is to report on the most significant issues at a group level and to illustrate, by way of further discussion on our website (www.implats.co.za), how we deal with specific issues in practice. The most critical issues have been summarised.

Material issues have been identified at three levels:

  • at an operational level by the group’s operational management who are responsible for managing issues on a day-to-day basis;
  • at a strategic level, by the group’s Sustainable Development Forum; and
  • by the group’s risk management team, who have undertaken a regular review of risk factors, and who have scrutinised this report.

Integral to the way in which we deal with sustainable development is the identification of major areas of risk

Priorities

There has been a number of strategic priorities for Implats in respect of sustainable development during the year under review.

  • Developing a strategy and structure to deal with sustainable development matters in a holistic and integrated way, and with targets and the same robust approach that we would set for any other aspect of our business. Integral to this is the identification of the risks and opportunities related to sustainable development, and the role of our risk management discipline in developing this new approach. Our new Sustainable Development Policy Statement establishes a relevant context for this. Critically, we have implemented a sustainable development toolkit, which we believe will vastly improve our data capture on these matters.
  • Developing a culture of safety that will support our vision of ‘zero harm’ that will see underground mining operations that can operate, sustainably, without accidents or occupational disease. Our commitment extends beyond the working place, and takes cognisance of the impact that both HIV & AIDS and TB have on our employees and their families.
  • Addressing the serious shortage of skills in our industry and the high levels of staff turnover. The global economic crisis has resulted, to some degree, in reduced employee turnover, but this remains a key area of focus. Our plans to recruit and develop the right type of people in the organisation, to provide accredited training and development, and to retain our employees, is being addressed by means of a comprehensive human capital strategy that includes a focus on the overall employee value proposition. We realise that skilled employees can choose where to work and develop their careers; we want to ensure that their first choice is Implats and that we are able to develop our own talent from within.
  • Achieving the transformation imperatives of the company and the country. It is our view that a successfully transformed organisation (at Board, management and organisational levels) that closely reflects the demographic profile of the country, is one that will be able to ensure its own sustainability. Our programmes to achieve the appropriate levels of historically disadvantaged South Africans (HDSAs) in management, and women in management and in mining are not without their challenges, but we remain confident of meeting our own targets in time.
  • Delivering on the socio-economic development undertakings we have made in our SLPs and more broadly, to deliver long-term and sustainable improvements in the quality of life of, and the opportunities presented to, the communities in which we operate. Four key aspects bear special mention here, namely:
    • Improving housing and living conditions for the majority of our employees. Not only is this a strategic imperative for the company and the country, it also provides Implats with a competitive advantage in recruiting and retaining skilled employees. We have forecast approximately R3 billion to our initiatives to upgrade singles’ accommodation, develop family accommodation, and make available to employees opportunities to own their own homes. It is an important philosophy of our group that we are not just building houses, but homes, where our employees and their families may live and be at leisure.
    • Promoting economic empowerment through the identification, training and support of small, medium and micro enterprises (SMMEs), with a focus on black economic empowerment (BEE). In FY2009, Implats spent some R4 billion with BEE companies.
    • Supporting and developing sustainable socio-economic development projects, directly and in conjunction with other parties, with a particular emphasis on education, health, empowerment of community structures, infrastructure development, community welfare, safety and security. Projects are being reviewed and implemented on a sound footing, with robust feasibility studies being undertaken in advance to both confirm the viability of projects and their impact.
    • Sports development and, through this, the achievement of transformation, recreation, educational and individual development within the communities in which Implats operates. The alignment of this process with our training initiatives will provide Implats with a valuable pool of potential high-achieving recruits.
  • Ongoing legislative compliance with respect to the environment and the setting and achievement of clear targets regarding both energy and water use. Energy and water are scarce resources in southern Africa, and our growth in the future will depend on their responsible and efficient usage. We have programmes in place to improve energy efficiency and to optimise water usage, largely through recycling.
  • Allied to the above was the consideration given during the year to the risks and opportunities posed by climate change. In a process that was led by our risk management discipline, a comprehensive review was undertaken. Implats has, for the third year, responded to the Carbon Disclosure Project’s (CDP) annual survey and our submission is available at www.cdproject.net.
  • Continued support for and development of the markets for our products. The economic crisis faced by car-makers and the significant destocking that took place in FY2009, which coincided with a rapid decline in PGM prices in the first half of the year, reinforces the reality that our industry is a pricetaker and that we can, and should, play a meaningful role in the development of the market for our products. Our support for the Platinum Guild International (PGI) and the International Platinum Association (IPA) is important, given the role that these organisations play in promoting PGMs and finding new markets and applications for these ‘green metals’. Further, given global energy shortages and the impetus provided by climate change, the rationale for the development of more sustainable energy sources, such as fuel cell technology, must surely be greater than ever. This will, of course, be supported by continuing legislative developments.
  • A respect for human rights and compliance with the UNGC, which is not only entrenched within the South African Constitution, but also within the values that have been jointly agreed between management and employees within our group (see the vision and values section). We, as a group, believe we have a fundamental responsibility to our employees, both in South Africa and Zimbabwe, and their families to maintain jobs, create economic value, provide the opportunity for development and provide support and alleviate hardship through our socio-economic structures. We will continue to do so, but we will not compromise on our sustainable development principles, or our commitment to upholding fundamental human rights.

Feedback

We welcome feedback on our performance and reporting. A feedback form is provided and on our website.

In conclusion

As the global financial landscape has changed during the year, so has the socio-economic landscape. A review of the Mining Charter will take place in South Africa during the next year, and we expect an even greater focus on sustainability matters going forward.

It has been a challenging year for Implats, both operationally and financially, but one that will see the group emerge as a more robust and efficient entity, well-positioned to grow and sustain our operations far into the future.

David Brown
CEO
27 August 2009

There has been a number of strategic priorities for Implats in respect of sustainable development during the year under review

Developing a culture of safety that will support our vision of ‘zero harm’ is a priority

Implats Sustainable Development Report 2009